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, ~. h' J% o/ x7 N- ]Thu, January 11, 2007
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 20071 Z/ o8 o6 }8 w: J; Z) `( R
By NEIL WAUGH, EDMONTON SUN6 ~7 J9 s4 e6 p. a# Q
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1 U2 x& |( D# C4 M* x) b/ M' D4 rThey're changing the guard down at the Edmonton real estate palace. # W; c, c$ A1 H! K" A" v/ l% K
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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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- x% u6 F) L. z" CBut 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%.
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'CONTINUED DEMAND'
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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." - @+ y5 R# a5 \, o6 X+ ?
i8 K. J. c6 I0 HShe 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. ' _- s: Q9 ~; L
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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.
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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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& g- G: w, F X) L- [5 KStill, 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. V, s+ k. R+ n' d7 `8 m
% s2 R; s1 P* D- j9 u I, P0 t3 D* J"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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"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%.
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# ^, e5 r" e2 L1 b& |+ W2 }& tHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable."
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/ x' X% L; C u1 ~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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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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' L1 b4 E% U6 n) R"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. , o+ _: K1 o) z; ?8 U& l: \9 o( Q
% {/ Q0 H4 }2 h5 }$ Q* dSo strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share.
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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9 @% L# U8 z2 O"We do 95% of the sales in the real estate market," Pratt countered.
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( f9 @1 C1 F6 L1 s6 N& V# uLet the good times roll. 8 X8 c6 C# A Y9 [
! Q5 v$ c4 p; gPrevious story: Bottom Line
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