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August 28, 2007
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Buyer's marketHome sellers forced to slash prices ; R8 ~8 Z1 Q L1 o
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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# A% N! t* d' |% ?7 rAnd 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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7 X1 j6 ~' c0 l$ ?7 ?"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."
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, `, _) A& ^7 iAs 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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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 $12,000 less than the seller was seeking.
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9 U0 J' ]. o) `Condos didn't fair much better, with 79% going for less than the asking price.
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, O, `) |* H1 G& S4 c- A% ]2 s% K2 N+ u"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said.
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He said many sellers are knowingly asking for more than their home can fetch. 1 P6 l% g/ G3 ^& o+ L
! R7 g5 F9 E" Z) }"And quite frankly, the realtors are getting a bit frustrated," Hall said. W$ y( h0 V" z O7 q- `9 @$ {" h
; x/ ^3 ]5 B8 U; c7 ["The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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There are several theories as to why there are so many homes on the market. 6 b- `0 c2 z# b) \7 f
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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) F8 R" Y3 o$ X$ Z7 G- }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. ) B& h/ m) N- D3 B, ^
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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. 0 h0 B2 Q% m4 p4 P
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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." 0 w, L5 ~( N$ U6 e
6 V, a' g1 |, d. VHall said many sellers with homes on the market in Edmonton today won't sell. % E% S" K7 a9 p- M
; x8 ]+ h. k* P1 J: E: X"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." & ?: o4 i: I/ x" M6 y! G
# h, w9 T& n3 n0 U0 NThe 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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