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August 28, 2007
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- y* t9 L* e8 m% g6 Z$ u1 RBuyer's marketHome sellers forced to slash prices
) ~+ u0 H3 v3 J, w1 wBy FRANK LANDRY, CITY HALL BUREAU
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- f" X( `( ^1 x1 P8 l! MHome 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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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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"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 `& p; ^. q2 X2 x; P7 {% e( ~" {. I
: m' E/ y# t1 s* g9 J1 f6 Z"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." , U1 r. X3 H! m! Q& ?6 H$ ]" I! G
( J3 E1 Q/ A6 W( R+ WAs 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. 0 `! q" q5 l( G- G
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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. 5 J7 @# }6 a: m& C* |) I6 h) H9 x
& i M2 }# h O, z, fJon 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 $12,000 less than the seller was seeking.
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9 p$ R" `0 T; g0 b! u, ~4 pCondos 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.
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He said many sellers are knowingly asking for more than their home can fetch.
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. u. t1 |) g* q5 n7 F g$ l"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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# a* ^6 Q. t" y; w- r"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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There are several theories as to why there are so many homes on the market. - L- Q7 U5 Z$ {* N9 d
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. 1 ~1 l _; x$ y2 I: N: E3 i
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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. : D' \" J4 u& m& v3 Z0 Y. {) B5 a
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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. & E- X4 |/ o; ~0 K" C% A( W0 l
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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. o: m) c- W/ ?" U
" T! p* _: d' M3 b$ W"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." 8 p# Z2 ]: E% L
6 B) D! r$ p; j' E" Y: ]& 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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