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August 28, 2007 ( A. E: U1 O* d$ t: J m2 |1 E
* Q' k' ~% Z; [) s: pBuyer's marketHome sellers forced to slash prices
) B9 [" ^# U- K4 a, V, j b8 ?By FRANK LANDRY, CITY HALL BUREAU7 r1 g1 F0 V2 z5 E/ _
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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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: b- i W; T6 j; i" iAnd 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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; M( Q: [; J: C"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. 2 U5 K8 f* W8 K3 {! O/ H' j
0 N8 B- F2 C+ W; T) [3 S9 o"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced."
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! n5 l/ W% V2 `% G$ D) w. }' L: IAs 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 $40,000. ) } ~$ t' T) C; T9 C/ q3 n7 R2 s
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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. 5 T8 ^" o( \ t3 K0 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 $12,000 less than the seller was seeking. ; b q4 y4 i" p. m/ H% b$ d
4 j+ O1 S0 N- |5 VCondos didn't fair much better, with 79% going for less than the asking price. . Y4 k4 W; t9 P- _/ W
2 B9 U2 [- Q9 k% E' N2 \6 L"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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; N0 U6 f, w# C! PHe said many sellers are knowingly asking for more than their home can fetch. % [( r+ g4 k% B6 |6 _
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"And quite frankly, the realtors are getting a bit frustrated," Hall said. # }; r H& d; l( C3 @
& w" _+ m5 i @4 ^$ n: ^"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." ) k! s' \& g7 O5 W0 z4 ]# ~
$ K& H _, c# X3 u' {* c( f% S2 WThere are several theories as to why there are so many homes on the market.
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+ t% K8 P( u4 M9 i; E/ _& P" s$ UCarolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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8 h1 G6 q6 [ z& H( t8 v7 |9 _$ tOther 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. * m1 ? Q+ Y# z
& X( I* Z: V! n: O$ z* {/ q"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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Hall said many sellers with homes on the market in Edmonton today won't sell.
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5 d8 t+ w+ E- }! f8 R' E1 k' e"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." - _! \/ L2 K3 e [6 W2 E! [
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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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