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Thu January 11, 2007 www.edmontonsun.com
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2 J8 E- ^% d5 [- NThu, January 11, 20077 C3 L7 _% D! H8 Q( w
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 20072 @3 w& g4 T. g9 N& X" E
By NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace. , j( ]$ G) M* f
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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. . m4 ?7 q; \8 z
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But first, the EREB president's bold predictions and fearless forecasts. e9 d2 ?4 m9 \% l& A2 x* 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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'CONTINUED DEMAND'
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* u8 v7 w' s5 W3 O* L1 ?( ^"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."
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l3 G1 @, C! K7 O4 QShe 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. ! b$ X$ m- I+ }: V
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"There just won't be enough houses to sell," she sighed. 2 E1 T) s$ J) t- P8 k8 ~) w& H$ S
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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. + a7 B! K' A1 N8 v
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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." 0 _! n0 z6 V+ U" c) G6 P, F
, q" i% j9 p5 C5 s) F# ?* I; U3 O6 EStill, 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. , e m5 y4 L9 q' g4 t5 @
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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. - g% K u: n4 m# r+ C
2 f9 a0 [' O, n0 R3 ?/ r"There are too many shortages in the system," he shrugged. % l( j' u+ [7 L9 Y1 b
( B' [' @5 }9 V. \( d. d# `"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. ( W6 p% t9 ]9 i2 v* A
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4 K1 |! K* A+ |# Z; BHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." ) o2 N4 N* J+ \7 f" Q7 Y: p
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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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1 y" A; J) Y9 W5 j( l' s/ t% `9 {( zOver 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. ) `) I9 \ U0 l9 S" R
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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. + m( O7 \! a8 C2 T( b
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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. * f/ s1 @* u$ I/ x3 q0 B
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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. 7 O8 e/ K1 s+ L, \* S/ I8 x5 y
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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.
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