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Thu, January 11, 2007
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* ^# L4 Y2 h% J+ W) V" W0 IPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007* B$ u+ l4 I5 {# H7 R5 R% T* S" X
By NEIL WAUGH, EDMONTON SUN4 V2 V7 `" _, d9 O+ J+ f# M9 P' B
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They're changing the guard down at the Edmonton real estate palace. 7 l( ~) u5 @2 X* n
+ Q2 E! O0 m+ w; @ p! t2 {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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But first, the EREB president's bold predictions and fearless forecasts. 4 v) S# Z1 Y) I
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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%. 2 n/ Z) X, i3 ?
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'CONTINUED DEMAND'
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. c5 N& @! W# H& D& \9 f"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." ; R( U9 H) D9 P0 R9 l/ p
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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. 4 l& s0 y. T; r5 y! f2 p
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"There just won't be enough houses to sell," she sighed. 4 G- o* ~. T* w
+ Q! y* ]$ Q3 X8 Z- l& E- fCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. $ z/ N9 t" R' B5 F! } x
9 N: N* R+ O H- u- q1 j"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. # ]% _. a+ }6 c5 x# C7 \, w
0 y/ q1 P- Q6 T( w! z/ @9 x"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. ' s$ m% E$ |9 w0 c! y `8 T
% U2 m1 b" M, M* `6 v% J"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%. / Y* |( O S K* @3 z% r
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NO PRICE BOOM REPEAT 9 B+ ^' x& e2 ]3 Y9 ~
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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.
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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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! P7 ~% V) ~: ?5 _) ?2 M" XHis 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. * l& ?8 T2 B% {) g! J( e
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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. - F, Q4 Q) N/ q
7 _2 H% o/ s* G9 [. U$ ISo 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 $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. }5 J" g5 C5 `- m( e+ P7 Z, d
2 M7 g( K L; c; F: r- T4 l% r; W"We do 95% of the sales in the real estate market," Pratt countered.
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$ ^9 _* o/ Z3 F, `* i% ~/ ~) SLet the good times roll. : Q/ u o9 }+ y8 g1 @+ B' Y: I
& F: Z1 S5 N! E! VPrevious story: Bottom Line
9 s0 \! U8 K1 J, ]% [. \ lNext story: Building permits hit record
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