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Thu January 11, 2007 www.edmontonsun.com
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+ v7 [* a; y: | i3 l" T) \Thu, January 11, 2007
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007! g/ t! E2 o v
By NEIL WAUGH, EDMONTON SUN
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2 R- W* \, U* q- [* W+ fThey're changing the guard down at the Edmonton real estate palace.
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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. - A R- F) `" M6 N2 G/ W
~0 I a# s( E4 f" L1 DBut first, the EREB president's bold predictions and fearless forecasts.
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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%. ! W8 Q2 \" T- G+ E
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# ]6 Y4 e, H9 q4 u! c/ X# _9 ]" H3 Q"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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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. ' @2 m2 B& y0 O
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"There just won't be enough houses to sell," she sighed.
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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. ! o6 n4 m$ G3 m* z
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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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" D+ `/ `7 j9 z- oStill, 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. 9 z9 p( a8 {1 G7 t# E
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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. 7 ^0 D* }4 z% _ }& U9 i7 @4 T. A
: ~) T2 G0 L# r9 \. {. y0 E% E9 G"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%. " j3 e3 w! S( A% a
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NO PRICE BOOM REPEAT
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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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( a$ S+ I( Z8 z& pExpect 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. & u, q. l3 g3 w0 D& Z* L
9 n2 P+ @1 g5 L5 d% G. u% r6 IOver 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. * h; L$ W: i) t/ o' ^
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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. ) F$ y1 h0 F+ P: W0 {2 P, `3 N, B
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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. ) H6 \5 V8 u1 [4 Y7 ~
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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. % H6 ?! M+ b6 }7 X* ^! V# d* T" s
( A( g- x# F) J' T& |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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. y1 |6 y5 F6 p) L& B8 l"We do 95% of the sales in the real estate market," Pratt countered. 3 ], g2 N5 M N
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Let the good times roll. - M8 B. a9 E d6 e% F
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