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August 28, 2007 - x% p% G/ N/ u* J& L8 H7 w
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Buyer's marketHome sellers forced to slash prices
, }% Z' a" u4 p# NBy FRANK LANDRY, CITY HALL BUREAU2 b1 M' O) |, E& B3 V$ `+ @# Z" q
, A7 v; j% g! ~2 d; GHome 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. , x# D: u1 Z9 `
' S2 R' S, Y+ @; u& ~+ f! e9 l"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. * r6 `) B2 z) _0 Q/ |" r) m
; E" D) L3 C( Y* u"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 $40,000. ! S3 L! `# j- h% d5 _$ ~
+ l2 K( P1 m9 j& {+ S4 B"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. + n5 u3 Z" r5 l
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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. - q4 h& K) [7 i' w
( ^7 v" |; N9 `1 UHe said many sellers are knowingly asking for more than their home can fetch.
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* ~* P; r# D- p"And quite frankly, the realtors are getting a bit frustrated," Hall said. 5 G5 j3 H4 l |# u, b |0 h7 g
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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."
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There are several theories as to why there are so many homes on the market. + k; f% R0 r/ M3 N& F! l
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. * J1 q. Z' V" r1 K: Z: \( d, C/ D
8 P1 i( M( T, U# _. @+ COther 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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: f0 D/ k3 m6 H m( uPratt 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. 4 Y( f! x2 ]1 W1 Q( }$ Y2 E, j$ t
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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. , H5 j& O# ], j9 P& D+ H3 c0 Z
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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."
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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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