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. [% m8 y' N% ~ 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' j, D& l* _7 y$ b1 }$ w
By NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace. % J* B) v4 J9 {3 j/ N- E* z
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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. , v5 ~, z" g' P" c
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But first, the EREB president's bold predictions and fearless forecasts.
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) E7 y2 e1 l1 sDon'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%. 1 K9 A: _0 r( q+ Y; @8 l
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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." B- O( c" y X# M! r: M
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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. & X$ W6 j8 z i5 D5 \
% l* ?' d' a1 z! ]# Y, ^+ K; r# B6 z" aCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. ! H) ~' v5 j+ d5 k3 t2 I. [. d
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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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( B, p" H; F$ e7 U T" iStill, 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 o. c& S% N; F2 _
9 Y% u4 G3 }8 C8 a( z, d"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. . q) {. Z& A# L' G) ~; q6 a
4 R7 f, T6 F6 r/ O7 }2 Y"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%. 5 ?/ x7 ~$ c5 v% O) d, V* d3 F
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) @6 E3 r( Z, r4 n1 m2 z# @$ @" ?He also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." * ~9 p8 H1 S1 w& t. Q! |
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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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O. g/ n+ ^( ?3 q# cOver 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. 2 F" S2 d2 N5 G+ j
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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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) m4 I; ^& D+ E0 z( G"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. : @3 I8 r: u5 R9 t2 z% Z" E
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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. % I I3 j3 a: A+ J8 f7 q
: r. S, e1 O: q6 L/ @. v+ x"We do 95% of the sales in the real estate market," Pratt countered.
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0 ]+ J3 N" I5 }& P/ [Let the good times roll.
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: f& d7 |* Y- Q! a( ePrevious story: Bottom Line
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