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Thu January 11, 2007 www.edmontonsun.com
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9 {! I4 {7 E$ UThu, January 11, 2007
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1 L& `; a9 W5 ]1 cPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 20078 x$ n+ u9 X1 |
By NEIL WAUGH, EDMONTON SUN, t6 _8 i9 D6 B- Z+ ~) g
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They'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.
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But first, the EREB president's bold predictions and fearless forecasts.
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% ^# T3 e+ V" L' A9 Y; V% kDon'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%. ( _7 R Z8 Y- V: @
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'CONTINUED DEMAND' 8 y3 k- `) _; o+ C1 A& D: \2 i, k
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$ g5 t5 l5 E4 I6 k"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." 5 W: ]" c5 ^+ D- A& U& U, u
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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. . X. [& h2 C8 [/ l# g* z5 {$ G
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"There just won't be enough houses to sell," she sighed. 4 f0 I/ D. O4 p! u/ U
4 S6 P' F1 Z" B% XCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. $ C/ J7 W7 n# I: k0 M
$ q* F4 A; r& M- P"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." ; q; P" `/ Q, l; z, K
7 _0 D9 e- K3 Y1 t' }2 YStill, 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. 8 n; \5 m2 | z
6 P7 d' H% P- ^# |8 V"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. # |% _& p5 V1 O* m# [1 f8 c7 h
1 y5 |, {/ B) t# p j) v"There are too many shortages in the system," he shrugged. ! r* @( {6 i5 v4 H/ L: q, n
: I" f, k% L& [6 m, V& H"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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NO PRICE BOOM REPEAT
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3 K# _( \5 b: f" u$ `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. * ^6 }" E, n, Q" n! f- o# y
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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. , W8 ^7 m" w( q* M$ D! |
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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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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. ! f! ?+ f, O3 G0 U7 a" P
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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. - b+ f& y# R- |" [6 @$ ~
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. ; N! N- Z n3 r: C& H+ T0 o: ?
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"We do 95% of the sales in the real estate market," Pratt countered.
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Let the good times roll. ) V9 J+ `" {$ {: \# Z
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Previous story: Bottom Line
* ?! N3 _( O! m# z' |Next story: Building permits hit record
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