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August 28, 2007 2 W1 f4 w, O7 {; [2 l6 |+ b$ G
6 S, x( x) g& P5 |" N8 k5 S, iBuyer's marketHome sellers forced to slash prices
3 D. w9 I) O$ }8 x& l8 R: u( TBy 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. ' {/ _6 Z- f% N2 ^ k- P$ ?8 ^
! x% m& b" ~( G6 Y! p1 xAnd 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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$ _" B. ^4 F. M$ d3 u- q0 Z"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. 0 v0 X, h# U3 t
( r7 k6 ]" O+ m: ]& u* R"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced."
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; |; f! Y( @9 X, Z, y% M8 K1 @1 QAs 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. # o! U3 @8 M' ]* Z3 q
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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 $12,000 less than the seller was seeking.
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Condos didn't fair much better, with 79% going for less than the asking price.
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"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said.
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He said many sellers are knowingly asking for more than their home can fetch.
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0 _% } l# [4 B Z% R' t ^: O+ _"And quite frankly, the realtors are getting a bit frustrated," Hall said. " b9 }3 m3 e7 D
3 f( v; t8 |2 e7 J r: @$ J* q"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.
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. 7 t* Y8 M" x% w6 R
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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.
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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. , ?# |) f# I2 ^8 `9 D
8 Y4 r& J: ~* o# TKeith 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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6 q G O- E2 V"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. ' \3 j) K- J. y% p. @: P
" G. @1 X' s( a- _( 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."
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% M% f6 B3 @: @) c" u% J" WThe 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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