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Thu January 11, 2007 www.edmontonsun.com
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* |+ i* E5 [; e' ]! c$ ^Thu, January 11, 2007! ^) K( P- h9 v" ^5 g% N% _. H& [
+ s0 n, R' m6 S" UPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
" u( f3 T* @9 x. l& G8 uBy NEIL WAUGH, EDMONTON SUN8 O$ {& v2 l" B6 I2 U& ^. S
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They're changing the guard down at the Edmonton real estate palace. 5 D6 h! P. w8 B' k N
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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. 3 b( R* R% g# e; ?: r1 U2 M1 B/ S# ~7 Y0 ^% Q
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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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7 V% b! T. C; f' Y1 R! b'CONTINUED DEMAND' 3 r; T5 G' R7 q4 _0 X3 v
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1 i6 Y5 X+ P7 n g* q K"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." 7 A- j) C. x" U6 [
# f. W# l; N) A! f' p/ ?0 }6 HShe 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. / m6 O% o" _4 w4 q( _
8 y# T- f+ W+ g* i"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. 1 r0 b* J* E3 X6 m
/ I8 J: m; y5 g5 |: J, A4 X" q"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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* \; a" A- T0 }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. 2 e- ^" ?, U2 H9 t5 c" }( g. D( 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. + ~6 V% H$ D, j; t) j! Q+ C
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"There are too many shortages in the system," he shrugged.
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1 X' v3 x! T; x7 f/ m! f9 H"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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" P' B9 U& j+ @+ lNO PRICE BOOM REPEAT 3 Z; L i1 a* _: H# J
: m' S- v/ B( X3 g, AHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." : N* T# y2 N+ a2 J, D3 B
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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.
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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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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. ; j8 M9 u) ~* ?+ I
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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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% }$ j+ o/ o$ O5 `4 U& Z# xSo 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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`- q' b% k0 I6 o$ {/ t" kYesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. ; L$ i v' R1 d) g0 q* c
% p- J' j) X; M( Z+ c- e"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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Previous story: Bottom Line
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