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August 28, 2007
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Buyer's marketHome sellers forced to slash prices
. m) z' a- \; C; T- RBy FRANK LANDRY, CITY HALL BUREAU
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7 @ d# Y2 i8 M, Q) K+ Z5 m# JHome 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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And 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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"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.
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"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced." 4 {" E* c# t2 \" Z0 q7 E2 ~& A
% q: S' D# l! l+ e/ o2 Q' MAs 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.
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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. / S% `: d% g+ R+ w1 {3 w
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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. 9 B" D. M. b: r: N) ~
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Condos didn't fair much better, with 79% going for less than the asking price. 6 ~# T. y5 X; a) [8 F
3 D9 y, H- }! g q* r7 Z"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. 4 G4 S8 F* k7 _: e! J
: w9 p% H3 ~" U* ^1 J' i4 ZHe said many sellers are knowingly asking for more than their home can fetch. : I. ~0 C5 x3 m2 G& ~9 o
/ U1 U4 {0 O |. }0 m) p"And quite frankly, the realtors are getting a bit frustrated," Hall said.
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price." ) d; { R, k! d+ y
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There are several theories as to why there are so many homes on the market.
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, {/ |* Q% g7 w: A+ {Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. & `! _% f, T+ A+ e N" G
7 A" c' ^: D w: i" j7 m, n* wOther people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said.
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6 B* L ]- j$ h& C2 K* LPratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. & i" j6 q3 i0 I
+ X9 z8 C3 V- L6 u) I {4 k/ vKeith 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. 5 g t. S) E6 [, k2 ?1 i, o
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"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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8 \# b8 {" P( R. o) e" u& m2 `, [Hall said many sellers with homes on the market in Edmonton today won't sell.
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"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." 1 a$ b3 a, h: g) ?
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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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