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Thu, January 11, 2007
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2 K# d' ?- L8 d, B1 Z# TPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 20077 @7 P8 [% S8 ]7 s! Z& N9 D+ j
By NEIL WAUGH, EDMONTON SUN5 {0 }3 P- \$ @7 V5 \0 ]
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# t3 y t) x) L( e, P L( ~$ K, ~; I* qThey're changing the guard down at the Edmonton real estate palace. 6 J+ C, O( N5 J0 Y% V
( ~* H, h5 T# ?- m( D! T! N( XMadeline 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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4 u) J5 \5 `) @1 o& K( k- uBut first, the EREB president's bold predictions and fearless forecasts. ' L; S V8 T7 B
! e4 d( E' J# {: IDon'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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"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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. R4 U& |0 S6 \% L T5 p/ S7 M7 sShe 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.
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5 h& s4 r$ V E* H8 }"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.
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3 W' G5 p& v* |$ m" y3 [+ a) g7 M9 s"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." 5 C" V# h9 B6 t8 Z+ a
$ ]% @" N: ` a5 s/ i) W/ ~; `: zStill, 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. % _3 q% }+ h. I4 G! N' c7 h+ |! b
. ~' W/ B$ d! E8 c* H"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 f! H# d) b- j0 C
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"There are too many shortages in the system," he shrugged. / V3 Z( h; \( B& ]- W, t, f7 X
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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 - V c2 s! D2 O" w
: G( {. M" ?7 ~& x8 N; o/ vHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." $ Z6 f) C& E. T- ]
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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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% [6 A# B" {0 a3 f# x" w f" nHis 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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. \6 r$ A8 m& F, |5 ]4 P"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. " a+ x9 I" o( m
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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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. x. s: t+ U8 j3 V% {* ZYesterday 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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- R; R% M" M; L) E1 @"We do 95% of the sales in the real estate market," Pratt countered. 0 E7 S/ V, C( s5 {
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Let the good times roll. $ x9 o: c- Y# J# ^+ R) }) a
- u# b$ b8 B3 B. GPrevious story: Bottom Line
- Y2 V! m3 i2 u& M3 BNext story: Building permits hit record
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