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August 28, 2007
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Buyer's marketHome sellers forced to slash prices , y! p% s0 ]! @8 Z. E! @
By FRANK LANDRY, CITY HALL BUREAU; Q3 X$ L+ U& \8 w6 Z a+ B- G
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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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5 g9 K" \. t' t+ ]/ ?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. ; A6 T* X6 J( y5 A3 y
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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." 8 S, x) `! f5 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.
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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.
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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 $12,000 less than the seller was seeking. 0 J% y P: L$ V+ z5 @
! U2 `- F5 ]6 {Condos didn't fair much better, with 79% going for less than the asking price. % S; `. Q$ ^' N' s
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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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( B6 {9 c( ~0 S2 B- XHe said many sellers are knowingly asking for more than their home can fetch.
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"And quite frankly, the realtors are getting a bit frustrated," Hall said. , F# |' ^0 m) u# _9 O6 f: E
& ~2 V; m. g. d: V2 c e"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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6 N3 k& C3 G8 b3 W5 ]There are several theories as to why there are so many homes on the market.
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/ ]3 I6 F; O6 ECarolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. 9 L& u( J8 f8 t' D
! q; G( z) g5 K3 V- ^8 KOther people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said.
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Pratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper.
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Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold.
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" K$ O/ ~+ n, p) [( v! k# C"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." ! y) E7 x; L% u+ j1 K
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Hall said many sellers with homes on the market in Edmonton today won't sell.
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3 U7 g0 \, o% M' t. n$ V"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 S1 {% k; n/ |
' Q! G9 \. |4 {8 d1 ~0 @5 p* ~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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