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August 28, 2007 + l1 k" s9 c3 a$ Y( |
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Buyer's marketHome sellers forced to slash prices f: G8 i. x& X/ h- ^! G
By FRANK LANDRY, CITY HALL BUREAU1 O: v8 k+ q" t. G. r1 @ ? r
9 v; ], P3 U" i* v3 A& 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. / i" @ |+ Y: Y! N! D4 p! i" f0 W
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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. 6 p* c* Z. Y+ Y$ ^* y' y) G
4 w% J0 l& y% C"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. 9 E# l- {& K* l/ F! A2 P
1 q# E. k6 ^$ j* ]"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." 3 I! I1 e" [2 |
; p$ ]1 O- L1 W+ v1 p/ e6 U) ~# xAs 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. $ F! O4 l c! ^8 q: ?1 N
$ E) |+ v t8 B; l"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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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 $12,000 less than the seller was seeking. , O, A( |+ C% q) p
5 J2 t; G% G* o) {Condos didn't fair much better, with 79% going for less than the asking price. 6 N/ k4 S. S; [4 ], @
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"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said. . U$ r# n% T( w5 E! T
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He said many sellers are knowingly asking for more than their home can fetch. 0 f2 c1 h9 c! `: x% w9 O+ Y
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"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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( f; l& _6 z$ `; c; m"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price." - r! k/ G, h4 k
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There are several theories as to why there are so many homes on the market.
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+ \- ^+ K5 M2 n" w7 XCarolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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& V, Y* {8 V* Y( JOther people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said.
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Pratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. : h" R3 X) b8 T
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Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold. 6 Q1 c c* P" \, u
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"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." - c7 B- V2 f$ o8 T- {3 C( v! Q
6 ~, J- `+ d ~# G1 j, RHall said many sellers with homes on the market in Edmonton today won't sell.
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"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." , A! y5 Y0 l1 \
, O2 R+ D# c% T. B; Q* ^( T8 R3 d" PThe 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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