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Thu January 11, 2007 www.edmontonsun.com/ X: }/ s5 V; Y, v' k. S
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: I4 D; h1 M. U; yThu, January 11, 2007
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: T1 o/ w% y a" hPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
; ~/ g Q6 {. E. z" p* BBy NEIL WAUGH, EDMONTON SUN! | [8 p) o' @
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5 Z9 \7 J5 I, F/ U* f4 GThey're changing the guard down at the Edmonton real estate palace.
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! t4 {6 [$ C8 w8 SMadeline 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. : e4 R, p$ |& Q( x' D
, w* h6 N; e' _. x8 DBut first, the EREB president's bold predictions and fearless forecasts. & J# `/ |& m& ^& n0 s9 I
; c) g# g2 O0 }: t" U. j3 ]! lDon'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%. 7 r- P" j$ {4 H; {* s8 A
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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." 8 ~/ Y0 L5 m! t z* G. P* n2 s# f
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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. ( Q; X8 ^: h8 y. j
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"There just won't be enough houses to sell," she sighed. ) f' F c2 I, B( E- l
9 W9 Q. L5 W6 R/ a% `' C& RCanada 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." " t& |0 V9 S' F1 u& O# f; ^
) e$ [! |' x! s+ Q3 k8 q) Y; aStill, 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. 9 ~+ a+ _2 v& A4 T+ L
Q% q7 D* ^/ E9 M8 w# w"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%.
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NO PRICE BOOM REPEAT 7 q) C9 ~, n+ r- z
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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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, r& f" @6 f. T' O, Z1 @9 y. @6 s" qExpect 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. % E, N5 S$ _* C$ A
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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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& Y$ }2 r, k2 XHis 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. * T1 w: T: \) @" i4 L P6 h
% U/ ~' h4 x5 T+ t) O"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. & t; ?- |4 e( m* @' K+ u; e& M
+ P) Y1 H2 Y/ l- D/ @0 o" }0 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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! j% k% u& B6 @"We do 95% of the sales in the real estate market," Pratt countered.
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2 Y; {0 Q' z- [+ r; NLet the good times roll.
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6 A9 ]3 l( k' L6 u" ?& VPrevious story: Bottom Line
& x, l- `7 o7 [) K( e3 LNext story: Building permits hit record
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