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Thu, January 11, 2007/ {+ [4 {0 B6 D* x- R) h# Z8 W! }
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
+ J' f) B; @$ G' n# B1 tBy NEIL WAUGH, EDMONTON SUN& d: [ \4 M5 ]& w7 @3 \6 A
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6 i6 P1 @- f! W2 YThey're changing the guard down at the Edmonton real estate palace. 3 ]3 {# ~% f+ E- Z& F2 w
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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. # j! D; i T! @/ e8 `5 {# k
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But first, the EREB president's bold predictions and fearless forecasts.
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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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'CONTINUED DEMAND' / }9 F( g8 E2 C& J w F
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; C/ Q: r# A7 w, T"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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! a$ g! N; ?. w$ M"There just won't be enough houses to sell," she sighed. & k8 B4 T6 D. I& {% C) R/ a
- L/ o4 i, H7 \; Z9 LCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. 9 n- H f- L) h7 R' w; j
- z% V F% [$ S- b1 u6 n"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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0 m& b! g0 a F- Y+ O. ZStill, 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. 4 F: s/ x" f1 j4 y' Q O
+ x) f; ]% \* \# K% c3 M% p"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. D/ w3 }) N; e; x, I4 F- B
- K$ I" N# U0 a" i"There are too many shortages in the system," he shrugged.
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"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. ' i& k: E* t5 ?3 Z: _' Y% d ?6 C" A
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NO PRICE BOOM REPEAT # c; \2 d1 {# K- A0 l
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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." ! g( }. @; 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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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.
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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. $ [. e! q8 w9 b+ m1 }
3 n# i. T( h7 v( p2 l; x. \( |! k4 R"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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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. % `% `6 [) C0 o* T; e
$ N# q; v$ h7 }9 ]4 z7 e6 Q"We do 95% of the sales in the real estate market," Pratt countered. 9 B3 q! y' t5 C2 g* p i9 p% [
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Let the good times roll. 3 r3 F3 f$ \/ b4 q! f
, c. l2 i% w+ pPrevious story: Bottom Line
9 [- D3 R% E; e, z, f7 T. QNext story: Building permits hit record$ X6 x( l- X) i# Q
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