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1 M# C1 K$ M/ z- X9 vThu, January 11, 2007% [5 N- q/ G6 G; Z
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007# X2 l3 D( @1 n; B: `
By NEIL WAUGH, EDMONTON SUN4 o2 n2 j0 M; B. p0 r# |3 ^
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They're changing the guard down at the Edmonton real estate palace. & D1 h5 r' W( J! j% a
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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.
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7 i. V' `0 N4 IBut first, the EREB president's bold predictions and fearless forecasts. D4 z/ A+ `9 q- m
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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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+ R( U1 J; l6 M, Q1 f6 E5 Q/ k) x'CONTINUED DEMAND' # Z+ p8 X$ @# g8 s+ f, q
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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." & G& B- b0 r& ^$ ?. ]% M$ t \) k
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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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"There just won't be enough houses to sell," she sighed. 9 w1 B& ^" Z/ Y/ x+ ?
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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. ! u6 G7 E i/ U, w8 S, P ]: {
- \/ t: Z3 p; S# [% U$ C"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." ! _' s0 w; Y: K4 w6 h
/ l8 \% T1 C I2 O/ xStill, 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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"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) V, C; @# q8 g
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"There are too many shortages in the system," he shrugged. 7 s5 f( V5 K: y( I2 s" @4 [7 s2 L
L) r/ I, A8 e' |"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. 7 e7 F& P: U, }1 w% j6 B
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NO PRICE BOOM REPEAT ( @' f% ]0 ]6 y6 _6 K& [
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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." ; ]8 Q. F1 v9 j+ V
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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. & Y; k' U# R# Z8 q
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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. ) p) @/ m& Q; }9 ~
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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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) y4 Y9 L; N! ^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. " \' S, v5 ~' h8 G
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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"We do 95% of the sales in the real estate market," Pratt countered. & _, c, C. i' Z
' U- u3 ~* c2 w% tLet the good times roll. - e) ]* W$ s7 p4 N/ }
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Previous story: Bottom Line& r2 C& o" O- ~& i& i
Next story: Building permits hit record
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