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August 28, 2007
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! l+ y$ l* B1 ~6 SBuyer's marketHome sellers forced to slash prices * B. K6 `9 K! N" b: w2 a0 l, T
By FRANK LANDRY, CITY HALL BUREAU' `2 r: A1 d6 _2 b& v
8 T z2 q8 i9 y. L; Q% e9 zHome 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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2 e+ k8 q4 T: V0 d 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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# ^4 g: b* f. K: u' ?"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 P6 o) X) H' v$ U* g
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"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced."
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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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"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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2 z- |1 p6 k' N' w" D! L: L# SJon 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 $12,000 less than the seller was seeking. 3 ]! I" @, F$ E! \
6 l3 c, B- N/ sCondos didn't fair much better, with 79% going for less than the asking price.
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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. 0 m+ x+ D$ l5 @% ?( i1 T! c- j5 e( Q8 @
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He said many sellers are knowingly asking for more than their home can fetch. ; Z5 q) P+ e. t7 ?. M& u" H- b
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"And quite frankly, the realtors are getting a bit frustrated," Hall said. $ {5 A) l6 x! b
! }. k* f) p. S"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price." / O* U6 ~4 q+ _' d+ ?( D$ O) i, l
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There are several theories as to why there are so many homes on the market.
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. 7 y: }( Y6 S0 f3 g) G
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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. 4 I$ N2 k! k+ v8 L& m
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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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# {( k# X. q2 A# 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." 4 E9 A3 P! x- U
" t2 w d8 A, ~. z$ E2 VHall said many sellers with homes on the market in Edmonton today won't sell.
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w1 O! p# w* C4 @- r"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." + p3 S$ p, A6 [0 q
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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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