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August 28, 2007
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2 O2 W7 h; K0 |& rBuyer's marketHome sellers forced to slash prices ' [5 N$ n. W/ N$ `+ F
By 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. 4 T4 c* @( s, _5 Q
0 x: c$ \1 [& v _) GAnd 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* o" o7 _6 L) ?: i
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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. 0 i; T5 D4 C& t$ R! p" k2 o; l
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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 $40,000.
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! H/ [2 W$ z( k3 p0 s% ^"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. 0 `& s3 K) f( G. J7 s( I8 E+ g% i( H
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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 $12,000 less than the seller was seeking.
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* g. Y j& ?/ a0 w/ }0 n% c& lCondos didn't fair much better, with 79% going for less than the asking price. 9 @; P% R: A1 H- T- l
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"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said. 8 {) y' e# S# x4 R n- }" H: F
! E* Z. W5 l$ Z! j. MHe said many sellers are knowingly asking for more than their home can fetch.
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2 V; I5 l$ i7 A* V# e( _. q6 M"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price." 2 e) o0 x. U R
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There are several theories as to why there are so many homes on the market.
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2 A% t- A/ S* ^# U4 OCarolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. ) e7 P. f7 X# m2 T% S, G& R; Y, \
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Other people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said.
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+ P2 }% H% x, R: q6 QPratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper.
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* }" B+ o2 o% N, \3 q8 {' ?Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold. # E: m1 \% f* ~, e& e. w& i% e; p
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"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." % S. ]# w- d, v! t4 D
1 o$ m5 n) h, K$ f. B4 M) vHall said many sellers with homes on the market in Edmonton today won't sell. 9 ]- V- v' ^/ p8 p- D; K
& q7 J. }( Z- F# R; D0 f- P; G"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." 2 @/ |- I" T* ]! H8 @/ K. ^( @, v5 s4 T0 n6 M
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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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