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8 a e$ o9 j _9 ^Thu, January 11, 2007
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7 _& \- i, W" Y% U9 `$ e7 \( ]/ lPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007# Z+ S: W' b9 A' u
By NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace. + O; t2 m# C: s% R! V0 S8 u
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Madeline Sarafinchan is out. Carolyn Pratt is taking over the Edmonton Real Estate Board president's gavel - the kind of blunt instrument that some realtors, I suspect, would like to use on ComFree Edmonton upstart Travis Holowach. More on that later. - ~: t0 c/ F2 {3 f0 y- t# M+ J
, y! B3 x% z( uBut first, the EREB president's bold predictions and fearless forecasts. ) Y1 [8 O+ B- {) _
$ H. ~" A e5 C) A7 `Don't expect a repeat of last year's housing boom where condo and single family dwelling prices spiked an incredible 52%. Pratt is now calling for a more modest increase of 15%. 4 A# z' G. o/ Y- o
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"We feel the increase will come because there will be continued demand, consumer confidence, a very robust economy and low interest rates," Pratt whooped at the EREB's New Year's kick-off conference at the Westin. "All the factors are there for another terrific year."
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! a' [) b9 _* J. b6 _8 g6 u3 oShe predicted that the total number of residential sales isn't expected to increase in 2007 - despite thousands of pot-of-gold seekers still flocking to the capital region from across the country as Ontario continues to sputter.
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"There just won't be enough houses to sell," she sighed. 0 n) u5 t. V5 {
: E: L. c$ Q5 v8 s! C6 sCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting.
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6 t. ?. ?$ H t( k: ["The big issue is, are we going to see continued in-migration into the city with the volumes we had last year?" Goatcher said. His expectation is "somewhat less." 5 c+ l, [9 V3 |7 `+ A Y$ H" K
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Still, total new-house starts will be "fairly similar" to last year's pace. 2006 turned out to be a record year. So was 2005. But Goatcher is predicting a 5% decrease in house starts.
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0 s9 {6 C8 u$ G# v" U"A lot of it is due to capacity issues," he said. Developers are running out of serviced lots in some areas. Some homebuilders "got a little overstretched" during last year's house-building frenzy.
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; x0 k) l1 {- y. a+ K F"There are too many shortages in the system," he shrugged. $ D% R2 f; z, U! X+ n% s) C% G
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"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%.
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; \6 P. W7 _/ v2 e, v' ZNO PRICE BOOM REPEAT
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He also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." ' O$ U/ _: L: l- S3 P( [
2 Y2 ?+ E+ s9 p. i) d) }Expect a more gentle 10% increase - mainly because many potential buyers are now being priced out of the market - even with zero down payment and 40-year mortgages.
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* C1 ?2 g1 C: v8 |* H; s/ g6 IOver at ComFree Edmonton, president Travis Holowach was also celebrating what he described as a "steaming red hot" real estate market, and another "record-setting" year for his commission-free real estate service.
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His 2006 wind-up report shows 4,375 total sales and 5,721 new listings, up 74% from 2005 - clearly sucking up a lot of the inventory that would otherwise have gone to an EREB realtor. 3 ] H- L7 }1 w$ ^2 h
6 X* i/ P3 _# |"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. r1 [6 M3 M3 Y0 |9 m
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So strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share. $ t' j- t1 Q& W) Y& K
# Q" D" f( I: i. lYesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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) Q9 K7 ^/ r$ s, h! Q" c"We do 95% of the sales in the real estate market," Pratt countered. 2 y+ F# W& C! S+ i9 L" m
8 {/ |: A/ ?1 zLet the good times roll.
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Previous story: Bottom Line
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