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August 28, 2007
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6 H- Q' T O9 s# Z: SBuyer's marketHome sellers forced to slash prices
9 N( N/ B8 A/ s$ z: V: kBy FRANK LANDRY, CITY HALL BUREAU
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0 k, x# P+ _& q: i& d; _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. 4 Z; i& @% o ^1 n! Y- r
; i- ~7 n' M% I% M" pAnd 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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"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. 2 e$ j$ T0 z* m$ o) 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." 7 x# u9 ]" {6 Q+ y( v$ i5 Z
; d1 e/ ^' f s; _5 w* o- uAs 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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* |/ i0 p9 X( A2 g2 ^" YJon 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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Condos didn't fair much better, with 79% going for less than the asking price. , i& I) d; p' g& n8 a
6 Z3 }( z) L/ H"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. ; o) z! G8 {3 Q
: r2 O* V s" gHe said many sellers are knowingly asking for more than their home can fetch. ' f- Z X4 H, Q% V4 W/ Y1 ~1 H
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"And quite frankly, the realtors are getting a bit frustrated," Hall said. 1 d6 ]. c( ^( O- [/ G/ Z- A) H" T
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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There are several theories as to why there are so many homes on the market.
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8 }0 J- c! e( F, bCarolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. & r( B; V$ U: R0 [3 a
# C& V/ q2 q1 d }. R- c4 _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. 8 S$ C; O+ {% f/ F- d
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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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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. " I; C' p: w# h# ]& p
`% o! k6 X0 A, T( ^8 Z9 }' R) s"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." + `& o9 J- y1 f+ j X
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Hall said many sellers with homes on the market in Edmonton today won't sell. ' w( W6 d2 Y, N
, r# l- H5 R$ l, E"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." 5 G' H q% f4 I- }7 D" N4 P
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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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