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August 28, 2007
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7 ~8 S3 c. x- [- C+ e3 qBuyer's marketHome sellers forced to slash prices
2 a$ [" l: }8 d% ]2 w% pBy 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.
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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. $ n/ ^7 p/ J0 C+ D! p* w
, r' J4 U c0 W$ T"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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5 A# x6 V+ A, u0 M"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." ' x9 v/ j3 a2 \4 k0 D6 a4 ~! A* n
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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. , t1 B/ g3 C. h2 {6 k) a' K
7 W0 K1 q# I4 ]% g"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 $12,000 less than the seller was seeking.
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Condos didn't fair much better, with 79% going for less than the asking price. + k* P- A0 _9 y/ K2 c
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"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said. ) k. I) s3 m5 z3 V2 W
' m6 S: {. }: u- kHe said many sellers are knowingly asking for more than their home can fetch. ) R6 T1 y, R, }/ [+ N( i& G" O* T9 M: m+ W
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"And quite frankly, the realtors are getting a bit frustrated," Hall said. - s5 S$ G2 R- I6 [/ b5 @" r
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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3 I- D0 w# o# C4 S$ Q% XThere 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 c- v& r. b8 N' S2 J) @' }+ a
% T( U* s H- f2 u& B/ T* l: }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. / B4 F! ^3 M/ S: b# G7 B0 D4 u
4 L: h. j* O. c WPratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. 9 ?" C$ P6 j, I! q* G! E
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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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"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." 1 @# e/ y: k8 d, ]& w
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Hall said many sellers with homes on the market in Edmonton today won't sell.
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; C5 |* D, v m* h2 o7 v- x2 f"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." 1 d2 I- m, Q/ [" A& `
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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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