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August 28, 2007
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Buyer's marketHome sellers forced to slash prices
7 \* p- A# J# P) g1 E7 JBy FRANK LANDRY, CITY HALL BUREAU
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Home 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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* s3 [; F6 o! ?' p* U* `( ]& w, oAnd 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.
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5 [! J! X3 u# S: c i: j"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.
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5 [" m+ b7 o# k"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." 0 p2 r4 b0 F p h, j4 W4 H8 P) d% _
4 d! N$ |" y/ a0 g! E5 u* j8 l- ]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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& v& \, P, V5 [& x/ ~"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. 7 L4 t% ~, u' W6 T8 d, R5 w
8 V. D% K) X1 N% H- g% mJon 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 $12,000 less than the seller was seeking. 2 B/ i; `# M* |3 r. a
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Condos didn't fair much better, with 79% going for less than the asking price.
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$ d2 M1 o* {! N"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. 4 R+ ]4 g6 f! u+ l
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He said many sellers are knowingly asking for more than their home can fetch.
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"And quite frankly, the realtors are getting a bit frustrated," Hall said. 6 n9 D. { `( N& e2 n' ]0 C2 j, u
, p; J* P: c. R l$ H"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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There are several theories as to why there are so many homes on the market. ' q9 ~$ a5 H$ Q: i( Q
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. : a- H7 a+ O- m. D
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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. ) A9 x7 a& |! }- Z$ s) f9 b9 H
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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.
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1 q1 i; I6 y" I8 C4 vKeith 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. 4 E7 ?- H1 F& z+ @* I9 \. N
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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." - o1 n( Z1 z& H
8 @2 V u. e0 T( }! eHall said many sellers with homes on the market in Edmonton today won't sell. 6 p4 s2 X( a% x g
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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."
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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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