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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
2 F4 i. T: b6 ^* ~' t% PBy NEIL WAUGH, EDMONTON SUN4 y( P+ K' @* e7 G' [ K! Y) K% o
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/ h# e1 r2 p- T# B4 t" v2 VThey're changing the guard down at the Edmonton real estate palace.
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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. 3 s$ G8 N% q* r; p
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But first, the EREB president's bold predictions and fearless forecasts.
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: \3 Q" V8 H' k/ M6 SDon'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%. 8 {( s" ~) ~; s" P
. j) D" A3 w* B# z9 s'CONTINUED DEMAND'
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"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."
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She 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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* v8 ] t" A" _& A: }9 I"There just won't be enough houses to sell," she sighed.
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- d2 S3 e% X, z2 cCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. & u, }: f6 T4 C, p6 L7 ?5 B, l: O
* K/ W- V) y/ f/ k& _/ q"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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: a+ i8 b, g( c5 w2 R* rStill, 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.
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+ y) P* P& ~5 o. H! r"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. ( \# ^+ j: [, V/ ]# m
) Y) l& y; X3 Q, ^' e& D; u"There are too many shortages in the system," he shrugged.
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4 W/ T* g! i9 I5 B k"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%.
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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."
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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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' H% l( `1 D' q+ Y1 r6 Z% vOver 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.
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" c/ x9 ]0 d! OHis 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. 1 q7 T5 Q% F& D, N
4 P: R& v6 X! M2 C- c% W"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. - Y3 e8 T: N0 N2 y8 U
R0 E. G; Y- I( PSo strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share. & _" R5 V& X! B" B& p
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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; E; G9 e& R6 ?! ~# v& u"We do 95% of the sales in the real estate market," Pratt countered. / {+ Z% I3 Y, n* C- c& }$ E- _
6 ]/ z& r# z6 uLet the good times roll.
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Previous story: Bottom Line
' c. L7 u2 o" U* _( eNext story: Building permits hit record
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