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August 28, 2007 3 w. [. d6 L. C5 ?" q: O$ [+ Q' R
' H5 _# t- G" d1 e2 t: ^8 M8 n4 NBuyer's marketHome sellers forced to slash prices & H5 [% b$ ]( [, D1 q& B
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. 7 S: l5 t$ m$ }# g7 A
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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.
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* ~. z4 D, J5 [7 Q9 s7 i"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. 3 [3 x* O# ^9 h: ^ K, b2 t
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"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." " y7 y6 v( [$ F# K& y% y
0 o! G! I; j1 s- U' _2 JAs 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. 9 E) b! L; d, M% S& T- ~6 l
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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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% h7 \4 M4 s- ]4 r* S/ OJon 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 $12,000 less than the seller was seeking. , i, v- |! k+ T
/ C$ T# n! S0 `4 }# K' s3 j% ICondos didn't fair much better, with 79% going for less than the asking price.
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# V- b" u8 k( O* e: N# e"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. + P7 E$ f& \9 g% O3 o: o ~( @
0 X. I4 e- x. ]# T* k1 OHe said many sellers are knowingly asking for more than their home can fetch.
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8 V9 V9 `8 b0 Z"And quite frankly, the realtors are getting a bit frustrated," Hall said. % k7 ]: l; S* R0 ^) V2 K. [% ^$ O
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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There are several theories as to why there are so many homes on the market. ' S1 r' U( u: q0 I/ C" ?5 Z
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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. V" i$ k5 z: m# `( Q# K. WOther 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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8 F, F6 S. a7 Z" \% `% Q5 tPratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. 6 U/ w+ U2 l. E) o. ?/ h
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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. ! R2 K, ^* T# Z) z. [' v$ Y& ~
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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."
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Hall said many sellers with homes on the market in Edmonton today won't sell. ) W' G, d: l; c% ^6 K6 |
' i/ l( b0 f! s: G' ?/ V2 ["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." & G# @ x N1 j, L
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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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