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August 28, 2007 & S( c# C" ]5 s; A% n* z
. j J( U; ]- F$ w3 P& K7 S1 MBuyer's marketHome sellers forced to slash prices ) \. M) {7 O/ C! s/ K$ F
By FRANK LANDRY, CITY HALL BUREAU
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/ o6 P6 u3 Y* }5 rHome sellers are slashing their asking prices by tens of thousands of dollars as Edmonton's once sizzling housing market continues to cool, says a city real estate agent.
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And new figures from the Edmonton Real Estate Board show the vast majority of sellers are now getting less than they're asking for - a stark contrast to the bidding wars of a year ago that routinely forced buyers to pay more than the list price. 4 l& `/ k# G; `1 O: k
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"There's tons of stuff on the market. There's twice as much inventory in residential real estate today as there was a year ago at this time," Re/Max agent Abe Hering told Sun Media yesterday. 4 j0 u* Z/ ]/ l& z" w. R2 m0 G; i
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"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced."
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X- ^/ U" r3 H1 u/ }As a result, Hering said he routinely advises clients who've had their homes on the market for awhile to drop their asking price by 10% in order to remain competitive. On an average $417,000 single-detached home, that works out to more than $40,000.
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"There's no sense reducing any product by 5% because it just doesn't work. We're seeing reductions of 10% and more," he said.
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# ^0 R( {1 L3 A& ?Jon Hall, with the Edmonton Real Estate Board, said 85% of single family homes that sold over the past 30 days went for less than the asking price. On average, the final figure was nearly $12,000 less than the seller was seeking.
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; q. s7 ~0 K; A% }, r$ g$ xCondos didn't fair much better, with 79% going for less than the asking price.
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"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said.
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He said many sellers are knowingly asking for more than their home can fetch. 5 B B4 s" ~* X' f8 E: w4 W' i1 @& e
9 R) \: H% G, S1 I6 w4 {"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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+ q4 x$ O" W( e/ M"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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There are several theories as to why there are so many homes on the market.
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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7 H9 ?( p# q! g+ ~Other people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said.
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Pratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. # j/ i5 D- U3 W& V* C: K
5 M' p' D* g e; A0 H! M9 B) X: {Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold.
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; T5 u2 B6 Z! |1 K! k"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number."
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Hall said many sellers with homes on the market in Edmonton today won't sell.
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/ x3 m" c4 M7 @$ I"It would be fair to say a lot of listings will melt. They'll just disappear," Hall said. "They'll just be withdrawn after a typical 60- or 90-day listing period."
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9 a+ |; z% z- _& B. v2 h! _" ?$ H# _The Edmonton Real Estate Board recently reported there was virtually no increase in the selling price of single family residence in July. That month, condo prices went up 2.5%, while townhomes increased 1%. The figures for August are expected to be released early next month. |
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