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Thu, January 11, 2007
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
, a, p$ h% L" m9 [( UBy NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace.
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1 j( k% P Z3 r8 ]Madeline Sarafinchan is out. Carolyn Pratt is taking over the Edmonton Real Estate Board president's gavel - the kind of blunt instrument that some realtors, I suspect, would like to use on ComFree Edmonton upstart Travis Holowach. More on that later. 9 L" |$ }5 v) F5 d, ]
# d0 u6 v" i) e8 D* JBut first, the EREB president's bold predictions and fearless forecasts. 2 R( W3 S6 S8 q* M. ]" J
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Don't expect a repeat of last year's housing boom where condo and single family dwelling prices spiked an incredible 52%. Pratt is now calling for a more modest increase of 15%. : d: z8 y; Q( g: S! s& u% ~3 I
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: u/ b/ Q# r& b' k"We feel the increase will come because there will be continued demand, consumer confidence, a very robust economy and low interest rates," Pratt whooped at the EREB's New Year's kick-off conference at the Westin. "All the factors are there for another terrific year." . K0 L$ v1 `. a4 C c$ y
5 V9 Q7 }6 @! ]6 u% r6 K7 hShe predicted that the total number of residential sales isn't expected to increase in 2007 - despite thousands of pot-of-gold seekers still flocking to the capital region from across the country as Ontario continues to sputter.
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3 w- s/ I$ v5 u/ g1 d& e- `2 E7 U"There just won't be enough houses to sell," she sighed.
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& K$ a( g% {! j/ v" |* Y0 f0 ECanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting.
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"The big issue is, are we going to see continued in-migration into the city with the volumes we had last year?" Goatcher said. His expectation is "somewhat less."
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" i% h& j: D1 ^# K- p/ h) nStill, total new-house starts will be "fairly similar" to last year's pace. 2006 turned out to be a record year. So was 2005. But Goatcher is predicting a 5% decrease in house starts. 5 X, O! E: p9 m; Y, S% m
: M, I, t# }- B; m% w7 K"A lot of it is due to capacity issues," he said. Developers are running out of serviced lots in some areas. Some homebuilders "got a little overstretched" during last year's house-building frenzy. \, @ {, _7 O: |" n) M
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"There are too many shortages in the system," he shrugged.
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- k& F- F y/ W. Z7 R* w"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. ( w2 G, P7 l$ r+ H% _ M
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NO PRICE BOOM REPEAT
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He also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." 1 ]3 f. Q; s8 j& D! K P
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Expect a more gentle 10% increase - mainly because many potential buyers are now being priced out of the market - even with zero down payment and 40-year mortgages.
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+ t- n4 U1 F* C9 J/ h' d" i' TOver at ComFree Edmonton, president Travis Holowach was also celebrating what he described as a "steaming red hot" real estate market, and another "record-setting" year for his commission-free real estate service. ; b; W: Y0 P! N% r* ~+ f) C' D5 f
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His 2006 wind-up report shows 4,375 total sales and 5,721 new listings, up 74% from 2005 - clearly sucking up a lot of the inventory that would otherwise have gone to an EREB realtor. 4 K* R: H4 X/ x" r8 k% A, ~# P6 x
: V# C5 d; Y; J. y6 D- u"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. ' a# s/ Z- x9 r# l( e
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So strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share.
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. W# H7 J {) u' B
) f9 {( L2 n- `0 ^"We do 95% of the sales in the real estate market," Pratt countered. 6 ?7 X. J4 \) ]0 |' u
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Let the good times roll.
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