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August 28, 2007
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Buyer's marketHome sellers forced to slash prices
9 W7 l. m' U7 n3 X; _" ?By FRANK LANDRY, CITY HALL BUREAU
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8 _$ c$ L& r" r. jHome 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. 8 @) G$ E, n$ i% b, b
) E- H6 h. C* _6 N! Z% \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.
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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 $40,000.
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"There's no sense reducing any product by 5% because it just doesn't work. We're seeing reductions of 10% and more," he said. ! Z0 p1 K$ I' N7 [# @9 r
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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 $12,000 less than the seller was seeking.
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$ K' X. s) n5 U. M: \Condos didn't fair much better, with 79% going for less than the asking price. # a" e( d: X9 V- T6 }. K
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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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4 _* @+ Z! j+ z9 R* O$ B' @- WHe said many sellers are knowingly asking for more than their home can fetch.
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, y$ X( b! n) U9 F1 R$ v"And quite frankly, the realtors are getting a bit frustrated," Hall said. $ z+ ^0 f: U. L9 B5 W8 M; y
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price." * C: }( M' l% `3 u# W$ Q. I) E
- _5 S1 y/ D. U* F5 r `. H, }9 tThere are several theories as to why there are so many homes on the market. ! P+ M6 @5 t- M8 m6 A4 `' [0 c2 J
- M3 l- g9 S9 N1 x5 oCarolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. ' b3 d. }0 F! ~
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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.
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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.
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+ {9 |7 D: }- M, ]% T"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. 0 w# j) X+ V" b# ?8 ]; v8 O" C' D+ F
" C) P( n* t. s# X8 o. H"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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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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