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Thu January 11, 2007 www.edmontonsun.com
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* s t; f7 C0 W2 sThu, January 11, 2007+ |; y6 Q* B$ R: D
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007( X% p& O" u1 t5 }7 f4 H6 e% n4 G# C
By NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace. ) c& x/ J+ W+ j$ ~/ w
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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. 5 w4 K0 c8 j( _$ \( a
6 [, l" Y' k3 I5 }; o7 A, mBut first, the EREB president's bold predictions and fearless forecasts.
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7 Q9 k" E6 |6 h, I2 t! B5 ]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%. 0 m# [4 g; A' 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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2 l5 O4 D( j5 x: _1 v8 UShe 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. . n2 S6 n4 A& g
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"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. . T- x4 ?- X: v
- F7 r, B$ d4 t$ V) X! |"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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4 A2 n8 F& F. _: n YStill, 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. # X( b3 R2 C% W% H3 j9 I
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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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; W$ j0 \ C* F; H- x' o' L"There are too many shortages in the system," he shrugged. ( Z& @1 i) K+ p
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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%. % n. l5 h7 u6 N3 |( \3 u
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NO PRICE BOOM REPEAT 2 f/ m( }: S* z6 q9 _0 e
# C0 V' L1 _1 g9 L! b3 [! y/ c3 KHe 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. l1 d3 p( q$ m/ |( z0 y
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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.
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; k) E- Z" {+ K% CHis 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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"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.
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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"We do 95% of the sales in the real estate market," Pratt countered.
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: Y! m3 X1 O% tLet the good times roll.
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* L1 Z' U5 c) w) ~) S5 h( [Previous story: Bottom Line6 ?4 u$ G: E% F( j2 h* |
Next story: Building permits hit record
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