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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
$ ` I R& Q5 p# v* L5 _By NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace. 1 _, i3 M+ n ^" f; a3 \
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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. - t7 c( x$ t) d) G
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But first, the EREB president's bold predictions and fearless forecasts.
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; A0 Y3 m2 I8 r4 x: H9 O" l$ w9 kDon'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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6 ?! ]9 K5 B# b; w Z'CONTINUED DEMAND'
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7 \- S7 ?& B2 w$ k6 |0 c) }, ` a% ]"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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* z, e, w6 b7 @6 _) P+ T" fShe 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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) j' x2 g, l$ d+ M( r& ^+ o6 `"There just won't be enough houses to sell," she sighed.
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Canada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. % k$ f& p! f4 h4 N
7 ]- \) R- r# N: Y3 K"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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Still, 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. - j, V5 t5 d% W! n9 c: |3 h
$ J o2 E; Z9 j9 S2 S8 F"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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) s' k. u8 `/ F, R* Q- x"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%.
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NO PRICE BOOM REPEAT # _5 Y, E6 ?2 D2 ~4 U, _
/ q" w0 e7 E7 a, m5 LHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." / l S; |7 E. m* x7 Y1 j; Y
* W. i% N, M# UExpect 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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) l8 D L/ ^% t) hOver 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.
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6 \6 H. o6 I- b' F* ^# |% P7 ~"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.
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2 r" k e4 w/ i" P. ~"We do 95% of the sales in the real estate market," Pratt countered.
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Let the good times roll. 6 |" o: B5 L' r( {" k; ?
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Previous story: Bottom Line
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