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August 28, 2007 1 P) p: S* X# l4 e9 r0 D
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Buyer's marketHome sellers forced to slash prices
0 b6 K" {, @" w6 fBy FRANK LANDRY, CITY HALL BUREAU* a6 n% H3 [$ k/ b3 T1 u/ e' U
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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. P) x* G& {, ^# I5 Q$ L
& V5 T3 O. K1 G$ C$ ^; tAnd 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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% O9 F/ l$ l" D"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." . g- c7 h1 r0 }5 e5 i: S( p
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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 $40,000.
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"There's no sense reducing any product by 5% because it just doesn't work. We're seeing reductions of 10% and more," he said. 4 l4 o) v4 n& F# M$ G
: f5 ~1 ~- X! o& v7 B4 O3 d. }1 GJon 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 $12,000 less than the seller was seeking. * G) I( r7 F" x
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Condos didn't fair much better, with 79% going for less than the asking price.
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* F7 ?2 `* ~, q5 j. q& r, F"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said. + D5 _5 d, T: G/ p4 c5 x
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He said many sellers are knowingly asking for more than their home can fetch.
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"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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/ J* H) Q' N( q+ Q$ a3 H- L"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price." 5 L# {8 M% i. ^5 g P* q/ b0 W7 F
4 Z; F6 V8 I6 z' |! L/ `% q' NThere are several theories as to why there are so many homes on the market. - a) E5 `: |; e
4 }8 j: N1 h6 e0 {Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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3 N" l2 @ j1 W" q. y4 U4 iOther people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said.
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6 f; z' r: _) d. S' cPratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper.
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Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold. 3 `# I- M! q _% G( W2 g6 @
' m* V8 [% Z( D6 v0 y, B$ c( \"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." / t1 e/ @$ i: `
; b) t- ^/ s* y1 r! tHall said many sellers with homes on the market in Edmonton today won't sell.
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"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." " [ w: w- W/ s! D* k5 V
9 r3 c, F( k( F( p! I1 n6 d* KThe 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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