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Thu January 11, 2007 www.edmontonsun.com w r) q( h: e) z% p! ]
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* ^5 k9 c y {4 W9 j$ vThu, January 11, 2007
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0 C( B. J; |+ o' V- ?Price is still rightEdmonton Real Estate Board president expects a 15% climb in 20071 G: v1 L& u, Q4 Q7 w
By NEIL WAUGH, EDMONTON SUN( j; |. D& {9 P: ^
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0 t* j8 r, f+ A$ u# OThey're changing the guard down at the Edmonton real estate palace.
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! H z4 r! Z+ W5 L5 p9 {! _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. , _$ R0 ]/ z2 z. X& _ b: g7 H- w0 z
g% l8 e# Z, ?3 Y/ O2 B' z! a* v2 SBut first, the EREB president's bold predictions and fearless forecasts. ; I$ x/ A. o; P t0 d$ ^7 \3 i
( Y/ |; K5 d7 Q" HDon'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%. 6 R$ u$ H2 k* U/ Y# N
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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." ) E, m* T, _# Z$ f
; k6 E8 w2 V% X) WShe 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. 2 g1 t/ L( e9 Q% V( W0 j2 T
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"There just won't be enough houses to sell," she sighed. : }+ n( g3 Q5 |1 l: Q( r; b
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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. - F, N; O. j/ |" {+ [& R) _4 O
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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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4 R: O& k! [* C9 rStill, 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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- U t+ F2 |+ ~& M/ 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. 1 z. a3 U4 G' q+ k/ m( X" S+ P* H% N$ Q
6 `0 p1 v" M" g"There are too many shortages in the system," he shrugged.
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: M y9 o6 D. {2 M4 d& r"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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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 {8 w6 e0 lHis 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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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. % N: S- R, ] L
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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. * ?1 z, o; _' p( x) G8 p$ \) S
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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"We do 95% of the sales in the real estate market," Pratt countered.
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Let the good times roll. ( f, u7 d# N! h8 @
6 k. a( U0 t, e7 x) t$ EPrevious story: Bottom Line
4 l. [# C( A* Q8 w7 |$ r7 RNext story: Building permits hit record) x0 M" R+ |5 T8 n. E
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