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! p' M% D* h6 k( c9 j) Y Thu January 11, 2007 www.edmontonsun.com
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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 U5 Y F j4 q. N
By NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace.
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9 z- K' F% R. A# bMadeline 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. ) P. }" f0 x1 x$ f) b( q
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But first, the EREB president's bold predictions and fearless forecasts. 2 h: W* {4 E" [* u0 h
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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%. , f8 t# m4 f/ ^# o
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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." - [9 Y! |6 N, k" a8 Y7 v) w7 F! Q
8 a1 `" o- W6 P$ v7 _+ q: w9 A+ kShe 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.
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& ?+ Z* E: A0 o, E' oCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. : a5 x: U, I# Z: h
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"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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: a9 n9 o6 }0 b2 F! [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. / T! C, Q; U# [& ~! ~8 f J( `* E
G Z1 x `0 K$ h. j( S"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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% B9 ^9 v: B; b% b+ p* w$ S5 d"There are too many shortages in the system," he shrugged.
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1 ]+ C9 B! K+ g5 \# O( q"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 ; x6 U: R. o. [$ `
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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. % H+ d2 @, L. ^$ E. J, X
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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. " c- h: q1 K6 f! o8 r. L* p2 ^
+ h$ e1 t, N5 _- L2 L/ GHis 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. 0 m8 M$ w" D5 L* c6 [1 o
* o. ~. C& Z3 k( k" \7 ["Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. 1 a! P9 v% A! M q# Z
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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 $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. 9 t) b5 a7 e1 q
8 H& m: `- j) v/ ` d"We do 95% of the sales in the real estate market," Pratt countered.
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U$ A( i, j- O8 j8 W V% PLet the good times roll.
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- u( e( G, D$ f* V' }& OPrevious story: Bottom Line/ S- I9 N3 t% Y+ C \8 e2 [
Next story: Building permits hit record$ d2 v u a3 K! v
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