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August 28, 2007
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: z! {6 n! l8 v& Z* i+ A! YBuyer's marketHome sellers forced to slash prices / J- N9 Q! c7 _; W3 u
By 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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5 ^. w3 M5 b1 H* s* aAnd 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.
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"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." ) e" p7 x& c: b* W. K: P
7 o9 F5 Z- h9 ~+ I+ n4 r4 ^1 HAs 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. 2 {) f- F7 L& C% I6 }! K: L
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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.
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, C: r: V: T- R' Q8 FCondos didn't fair much better, with 79% going for less than the asking price.
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* h Q, n+ y) @; d"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. " t3 I9 n2 l* _; S6 F7 |
/ `+ f2 ?5 g# z% [( oHe said many sellers are knowingly asking for more than their home can fetch.
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- c" C5 r+ x1 O! t( @4 t"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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* M# b( s. n3 m6 M/ Z4 s" CThere are several theories as to why there are so many homes on the market. 4 T- N* @( v( F, M
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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8 N# {1 Z0 ]& p/ w7 M4 ~, }Other people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said. . o. O; b; |" f' ] S$ x
% V8 \" B, A/ T r% S2 Z& dPratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. " Z& F) }2 J( ?% y1 L8 ^ l3 Y- b' m
# }$ Q+ l' g: [, \ Q9 U y' y: GKeith 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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"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." # D5 d0 o, {: T8 e, Q
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Hall said many sellers with homes on the market in Edmonton today won't sell.
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9 m# W) T0 F9 f& S! s/ E. 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."
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' c1 Z, ] Y( z$ h$ S" B$ ~1 s4 o: e1 XThe 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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