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Thu January 11, 2007 www.edmontonsun.com4 s! `- Y) J9 t9 A/ {
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Thu, January 11, 2007
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 20072 Q7 e4 }$ `+ g( b/ R8 H
By NEIL WAUGH, EDMONTON SUN$ T4 F4 {/ i, F8 U+ \% Q3 [
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. }* q: l# z {, s" FThey're changing the guard down at the Edmonton real estate palace. ! @. D2 _5 w- ]3 ^3 |0 N8 l8 m
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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. a4 a" B; o a
0 `# U) K8 `% Z5 i+ r+ @! k( u8 {$ IBut first, the EREB president's bold predictions and fearless forecasts.
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: l V8 {7 y2 `' D. VDon'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%. # u- T0 g. c# Y* g$ q4 k
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'CONTINUED DEMAND' 7 R5 M' o+ s+ W& W9 c
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; { g* K) [& M% l0 B"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." & M$ q b$ N% n ~' ?, X& p
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She 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. , N: y7 O$ M' `. u; w# W
; |) K4 S9 E& q: [. W o0 jCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. 5 g$ M3 t1 \6 |# |4 A
" F2 |! z* K3 I! ]# j"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." 7 B, z( a9 b b
: y/ }8 [5 v" l# o+ a6 qStill, 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. " ^! @' D+ }+ P: c6 h
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"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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& v0 g S; c* \- L9 ^& @% ?$ ~+ O6 T"There are too many shortages in the system," he shrugged.
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$ B$ p3 U& I2 C"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. & V6 f& r3 H7 o6 p/ V8 N
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NO 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." & \. k, b; p% G* {4 G m5 x
3 ^) Z. K5 m* D+ ~) \, H* `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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! T3 Z/ _6 d; M0 ]: lOver 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. 1 q4 V9 l2 e1 r# P% J8 U) B* ~# [2 A
2 \, c i$ G6 B+ b# S' UHis 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.
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: G* Q2 O/ a( o3 s q"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. * [! u1 W6 @1 ?
3 O# R$ Q' X8 z: NSo strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share.
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' I- q5 g, P" ^/ @0 y' r" VYesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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"We do 95% of the sales in the real estate market," Pratt countered.
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/ l% K6 a6 @8 Y. _; p) }! iLet the good times roll. ' e1 w$ w* b, ~9 }/ T) t; o
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Previous story: Bottom Line2 R @+ v* }, @* d
Next story: Building permits hit record
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