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2 a. ]% f7 ]1 ]2 [( p6 sThu, January 11, 20079 o6 ~6 E2 J8 F7 C: u3 w
( D, x! ^: Q6 ?) F+ O wPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
# E$ B" q' [$ J5 Z* CBy NEIL WAUGH, EDMONTON SUN+ S+ v( y! }: C
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2 e; Y/ E' F+ q% cThey're changing the guard down at the Edmonton real estate palace. 9 r/ I; t8 a& l6 I5 ~+ T4 X+ E$ K
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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.
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9 g6 T! b0 }: O# ^0 I- {But first, the EREB president's bold predictions and fearless forecasts. g ?4 i7 t T' g6 W
, N- ` u) Y) q9 x; T. O8 IDon'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%. 5 E- ?+ M7 Z! @. A. c0 P6 p/ e" N$ W( A
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. L& V. r1 R; o' @# C"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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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. & e, q! S' N0 X2 a( P' E
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"There just won't be enough houses to sell," she sighed. . z1 J! x1 s# H7 x5 J4 i, X0 G
% r1 G9 k# s6 C1 i/ Z) zCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. * w" ~* z5 l+ j( [% B) j' K6 ?3 M
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"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." ( J% X4 G G Y5 ?" p
, P8 v1 T5 J/ D$ A; G. q& jStill, 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. 1 z' S6 G. O9 `! P. M, d& ]5 w
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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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"There are too many shortages in the system," he shrugged.
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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%. 4 J8 S$ }5 J8 N+ W( t" d4 A1 A8 _' X8 x
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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."
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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. ) T8 `! [# L+ s( S3 J# a2 J S8 `
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Over 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. ! Z' R& w) s6 M* c9 f
6 Q* y+ u/ L1 g& i g2 X9 jHis 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. ) _; M, M# u4 S* W* n D6 A
2 |* S+ }: a3 B' e0 I/ F"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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9 s# w; Z- j% zSo strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share. 7 C X4 b4 Q/ Z7 Y# T. a' L: o
( }" O' S; r8 T# I: L/ W NYesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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& p# e- I7 X Q, V( u8 W, i% J"We do 95% of the sales in the real estate market," Pratt countered.
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Let the good times roll.
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+ Q& Y4 i4 s' }Previous story: Bottom Line
" G$ j" k" c) }3 V: T( R! S) \9 uNext story: Building permits hit record
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