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August 28, 2007 , S% r+ F# k# ?# _8 ~
. \, {3 ]: q* O" w6 v9 m0 u BBuyer's marketHome sellers forced to slash prices 5 d$ n: x1 Z. X# A" y
By FRANK LANDRY, CITY HALL BUREAU& x* O; P8 W5 n# K3 I d
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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.
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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; w; y5 n( }
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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. , T# U. t$ I B
$ Y9 D- `& _# v" V- E! Q"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." ) z/ |+ j U) U! t! x; m9 e
/ }. V1 v8 ^, u% g3 m0 m' c1 mAs 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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5 i8 N) U# \2 ~: E"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. : \& z' I0 |1 [: {6 g
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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 $12,000 less than the seller was seeking. % f* M: U0 Z/ q0 A- O: n: c3 b
. q% a# k: \& _; [Condos didn't fair much better, with 79% going for less than the asking price. " E7 j, L9 Q$ Y! J. A p0 W' a) }
2 i# @" c7 I2 q: ^9 b"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. + D( n" ?2 z' |! }; K$ q
# t9 M* O4 u/ B# Y. h8 x5 q4 W6 QHe said many sellers are knowingly asking for more than their home can fetch. 8 g. W9 e9 Q& s# Q" r
- k+ o2 J* }3 ~/ `"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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3 P" I8 g: p: G/ F b* D# v+ q"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price." # i3 J: w! [: ^- o; D& _
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There are several theories as to why there are so many homes on the market.
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6 @! @( N. z' i/ t2 @' R" DCarolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. ' a7 W* I5 P5 E- z# r3 U
; }# x% m }6 J3 P( x# HOther people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said. % M" S8 i0 [1 n+ M
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Pratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. 2 h7 L# i& }7 c3 F k
+ \: A+ `# ?* sKeith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold.
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: ]' v* s3 z1 f! s6 T% p4 T/ W& d"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." 8 A# j# I* k i7 g* X8 E `
: C4 V" Q3 q4 uHall said many sellers with homes on the market in Edmonton today won't sell. 3 q# X/ D$ H9 p2 p2 b
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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." 4 ^; J+ c) F, F
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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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