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Thu January 11, 2007 www.edmontonsun.com% `9 V' A8 c3 W; l R
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( H j" \* k& k+ o1 j' i* C2 cPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 20076 D, D# q# M: ]6 D; s2 R! k
By NEIL WAUGH, EDMONTON SUN
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( g1 a' l) x6 ^' K& Y5 ^They're changing the guard down at the Edmonton real estate palace.
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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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But first, the EREB president's bold predictions and fearless forecasts. ) t4 W3 }* t1 \2 q: P/ ^( g
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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%.
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@$ d* y) n' K& s u0 y'CONTINUED DEMAND'
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: B$ L, Q. N6 R6 w"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." . D5 z$ g9 T6 f$ A7 ~- T. a+ P3 w
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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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, b: i6 D2 }6 Z I3 {"There just won't be enough houses to sell," she sighed.
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Canada 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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"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."
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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. " b! x( z/ c) n! @; N4 a1 S
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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. ) Q M1 V, ~, j7 o5 E R. h
3 u" R+ _1 j& E+ W7 s+ P* `"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. / {% Q5 J3 x/ e. h1 ]
1 F7 R6 {( ^; g4 R8 F3 gNO PRICE BOOM REPEAT : Z* x* s( ?# A" L" y) h" R
: a6 s, V; a& t! lHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." ! H9 O0 @5 m5 @/ f" T4 S1 T: ?2 O( P
/ J! U, E' W& W% lExpect 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. 3 g9 Q+ x; c; \! d5 M( `6 w
; ^9 ]$ k0 S E- I% ]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. ! D) ^5 s7 n$ b; C; s8 \
4 x8 a5 V/ j$ C( C3 O! @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. " l3 M6 M# k: J8 L
# D5 K1 b5 p. u' w' Y+ @"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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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. . E5 R& I8 D* C9 ^& H2 H
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. ) N2 ^1 _# t" l6 @. h7 H7 F0 [. U% e
' i" h2 n, L Z' i% O5 y( c9 S% w3 {"We do 95% of the sales in the real estate market," Pratt countered. 1 n- N; k; T: X0 Z7 Z. d2 `' }
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Let the good times roll. / m' z0 N7 N% e, l" D) O% Y
7 K1 C3 J: I1 H8 [. @: a$ HPrevious story: Bottom Line
4 s+ I. V' P8 W2 ]; X# r7 D6 XNext story: Building permits hit record
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