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August 28, 2007
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' p, ^/ [3 {" P d5 w* N- x7 pBuyer's marketHome sellers forced to slash prices
) C* o) c) U8 h2 aBy FRANK LANDRY, CITY HALL BUREAU% y* h) v& Z# e+ `
6 d+ m) X% [# @' D) F" I4 k" b5 ~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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# x* M( `, i* P4 cAnd 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.
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' Y/ p }- G* O1 i9 X5 N"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."
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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 $40,000.
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) @9 }4 T ~8 A# n4 g% O; K"There's no sense reducing any product by 5% because it just doesn't work. We're seeing reductions of 10% and more," he said. - v1 [# g: ~4 u9 O+ c* q& ?5 A$ q
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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 $12,000 less than the seller was seeking. % X, ]& K+ @3 o
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Condos didn't fair much better, with 79% going for less than the asking price. 8 P) w: \3 B; C& Q1 P
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"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said.
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& c' h1 y9 e9 d3 l' J( XHe said many sellers are knowingly asking for more than their home can fetch. ! ~ y( |7 R$ H; t9 \4 O# m) y
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"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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+ k$ i3 Q1 b8 N- d"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price." . R. G+ k. ^& C% |0 e) R- _
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There are several theories as to why there are so many homes on the market. 4 M" @: K1 p& ?5 P
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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" N. R0 ]! G* k: rOther people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said. ( ~1 u2 B+ i$ T0 `- `
& T* d* b! W3 K4 R- B6 nPratt 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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/ ?. F2 K- T9 P7 o9 }6 n; X: OKeith 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."
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' O$ S* [, n: s; \/ t% d. w# wHall said many sellers with homes on the market in Edmonton today won't sell.
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8 |1 J+ j( }& T1 w* M E! X# W"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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