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Thu January 11, 2007 www.edmontonsun.com
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& F* w4 `8 [0 W7 g4 ?Thu, January 11, 2007
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007. D1 d1 h7 b# G1 O) b
By NEIL WAUGH, EDMONTON SUN
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5 }( ]) x& x3 ZThey're changing the guard down at the Edmonton real estate palace. ; ^; D$ y& \9 F- [7 G1 ~ W
% }5 w$ u( J. l8 W+ lMadeline 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. 2 \6 [- k) X; }3 a
8 d! n2 O3 Y- y" GBut first, the EREB president's bold predictions and fearless forecasts. ) k' e* I; r$ P+ `' i- p
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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'
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% W( K0 t. b' W) o" 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." * b1 O3 g9 S- f1 B; G1 o. a
, L, _0 m+ A0 Y+ v t6 s/ W% @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. # ^" ?, M" p7 V' j3 L& L/ _
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"There just won't be enough houses to sell," she sighed.
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7 K8 Y+ C; D4 }, q/ ZCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. 9 c! D, A; X+ y4 ?* b3 A
2 Y# W) s! T$ a"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. $ U* }% O1 p7 x4 H0 x! V& v
* i3 w1 Q3 E. d7 n$ q6 a6 f"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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7 H- b) w& i" q: G# S"There are too many shortages in the system," he shrugged. ' J8 g' g9 q4 A
8 t7 e7 \1 K7 P3 c4 o4 \9 q( ^"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
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Y, u. V4 H- G+ F# F0 f. S4 YHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable."
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& Q- j& H' Z+ V- 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.
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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. / G, G$ m1 G* \1 [
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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. " L; ^' Y9 ?, Z& R* U
# ?7 ~& _ m7 r"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. / W$ Y: I- l3 B" e/ _0 z
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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. 4 o6 T5 O$ F' n# u. W: G
2 X/ T) U; W h, [- PYesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. 0 ?; N8 {7 {* T) }3 u
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"We do 95% of the sales in the real estate market," Pratt countered. ; t/ W$ P' W, c" }( f
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Let the good times roll. ! ]/ L6 H: O" r5 i
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Previous story: Bottom Line
. K8 d( |5 R7 O5 X7 D7 yNext story: Building permits hit record! Z. P+ S) \4 d1 y/ N
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