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Thu January 11, 2007 www.edmontonsun.com
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2 e( [# K8 h+ x9 d2 ]Thu, January 11, 2007
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% x! K Y( p: l2 P$ qPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007# x9 a+ n4 D, Q' P: A, J4 L
By NEIL WAUGH, EDMONTON SUN
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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. ; h( v. U% `* j* V3 ~0 F
" o% j9 c* v$ B0 u5 G1 @# RBut first, the EREB president's bold predictions and fearless forecasts.
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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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'CONTINUED DEMAND' 3 o$ a" o: P& G
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( P- P4 I6 [) p& [0 U"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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7 }7 L, O" n" \8 C, \4 ?7 PShe 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. 1 F9 x6 G3 L* X% M! p% z
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"There just won't be enough houses to sell," she sighed.
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% ]# F3 ?# a1 L8 CCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. . `% I% D1 }3 S: |8 i0 ^ G
D% |/ `: w. V O$ K* W/ ]"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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& U+ B8 A* m# l1 NStill, 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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1 j8 s' G0 h: o. M4 c: c- |"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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o. @( Q+ m( b" ^"There are too many shortages in the system," he shrugged. & [( S/ d% E2 {1 L" L
! g/ Y) p) M( F* b"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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NO PRICE BOOM REPEAT # @( s! b$ ]1 F# U) ^4 ~
4 F% f$ y# E+ h, A5 FHe 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. 0 V8 D1 X5 e: i+ q
H2 g; t6 j& g3 a% d, oOver 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. & Y6 W/ I; _8 g3 [
9 n* t5 {% u5 Z9 S& A6 ~"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. - D1 Z, b' o* i% p7 f& }% Z
6 p( y/ t8 [7 k* s4 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.
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. 5 p1 N. [# P) Y1 Z! H
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"We do 95% of the sales in the real estate market," Pratt countered. [$ M9 l, M6 N6 a( j% b
6 f4 M d0 u$ ~( P) T) Y& aLet the good times roll.
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9 w& t: `/ b# O( L4 R, XPrevious story: Bottom Line0 B" `* @* G- x8 x* V. u9 q
Next story: Building permits hit record
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