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$ h$ u+ N+ A0 z' ]2 q/ {! p- G2 @ Thu January 11, 2007 www.edmontonsun.com
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7 n( F- Y3 j- AThu, January 11, 2007
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007* X6 d7 k% Q& g- W! `. s* J% v
By NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace. c. [7 \# t* G S6 d* ^: Q
5 B# S' r+ D2 ^& {# ~2 N+ mMadeline 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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3 r- X6 }, w4 V2 q8 oDon'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 [1 X$ I% g$ |! U
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'CONTINUED DEMAND' # X+ h" ^1 |; y* S/ f3 J: v% J! F
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, {% F& k' _7 m E5 v"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. % v6 l- l- C8 S3 y1 B
! B e+ A) [& R% L$ @# [0 Y4 h"There just won't be enough houses to sell," she sighed.
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* K' u; H& ~1 U1 b9 w: C, eCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting.
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0 c2 z9 b: s o# f"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.
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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.
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3 [6 F& Y o9 | R7 S"There are too many shortages in the system," he shrugged. % t! B6 L% ~0 `3 s
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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%.
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NO PRICE BOOM REPEAT ! y5 S5 x+ L: ~$ B" b8 u T
1 M. s2 r1 Y! N/ KHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." $ T; J/ B1 c0 p' W7 B; z2 X
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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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* j# S# v7 F' O* n) fOver 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. ( _0 Q1 R+ I! c" g2 h! A
2 _4 y, c: h3 Y% H2 I7 _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. 5 T% ^- c) k4 X: g/ L
5 ] M. w6 D- b' {"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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( M, ]; h# m2 k( ySo strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share. ! i$ r! M, p8 [: r- B& d, {
) a+ _2 j- \9 X u! E+ XYesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. ' A/ k+ ~8 p& L
* H. b" N, n# N0 K* \"We do 95% of the sales in the real estate market," Pratt countered.
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/ _; q$ z: c% c! ~3 M1 F- q8 BLet the good times roll.
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0 a; K. c: c0 f4 O2 |Previous story: Bottom Line6 o, a' P* F |& p# n4 O F
Next story: Building permits hit record
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