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Thu, January 11, 2007- V' _9 ]# z- @8 w- d s3 M0 Z
! [7 l M* t% s% V; h1 XPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007+ v k( ` g [$ t4 l2 d4 X. o
By NEIL WAUGH, EDMONTON SUN) x6 N3 G3 _. l1 }; N7 }4 z9 o4 V
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They're changing the guard down at the Edmonton real estate palace.
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6 A8 v+ K0 G: P) v: Q4 k7 NMadeline 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.
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+ G/ q9 N/ \$ g1 q5 GBut first, the EREB president's bold predictions and fearless forecasts. 4 M2 e+ o" L# z; B1 l; S0 }0 @( Q* {
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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%.
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0 B& \( }5 u( M9 _"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." ) t3 b `4 V7 I# q+ n+ l. A @
% m7 ~! ^9 M& c% J! dShe 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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"There just won't be enough houses to sell," she sighed. 1 R) J4 q7 _) M( n% l
) p, A! O" }8 }' vCanada 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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6 N8 o! v! m& I# O% d- ~+ `% ?$ a"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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3 Z. |5 a5 v# F$ a3 m/ VStill, 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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- i" g- E1 Z3 z& c$ \"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.
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"There are too many shortages in the system," he shrugged.
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4 _7 s! Q3 G' @2 p# y"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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: Z6 S# Z7 l2 k B* E/ X3 [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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, u) p. B7 D6 F9 `/ J5 }Over 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. 0 q7 `8 w7 j# S2 ~# r9 k$ k
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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. 1 S3 T) b0 ?& W3 s
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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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% f) V. _6 j# U& \+ T* I) LSo 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. 8 q2 h4 L5 n7 @: \
' C' q( h' m7 i# P"We do 95% of the sales in the real estate market," Pratt countered. " g7 D5 n: {! m4 c5 `
1 M7 {7 {; u5 ]7 p' l8 yLet the good times roll. 8 Y' A* i- S- Y
6 c9 w2 A8 a+ ~" \Previous story: Bottom Line
. d g, s3 F& K ZNext story: Building permits hit record
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