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! N7 d3 N/ b0 e2 qThu, January 11, 2007
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; Y8 x( a1 q! o# E# K: `Price is still rightEdmonton Real Estate Board president expects a 15% climb in 20074 ~, |" ]$ ?5 I* D+ G+ N
By NEIL WAUGH, EDMONTON SUN) k% i9 s1 j; w1 d
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They're changing the guard down at the Edmonton real estate palace. 5 A& ]) m: m7 W: R
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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. $ u! _5 E( D$ U P# ~
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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%. : t$ f1 X. s4 D" q9 w
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'CONTINUED DEMAND'
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$ h& ]2 U* @, P* a"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.
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"There just won't be enough houses to sell," she sighed. % D9 B' K4 s" U! A4 E( f6 R
) V4 N4 U: f X& ^( l8 F4 C* U) iCanada 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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! _! X: d! H4 K" a# pStill, 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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* Z( T8 i# @" N"There are too many shortages in the system," he shrugged. : o# [. [' {0 W; Z3 g% q% J" J
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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%. " y; r5 j: H1 [9 p1 \2 W! K
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NO PRICE BOOM REPEAT ( h! ]& t0 ?/ w, F% w& |
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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." W# G# Q( e9 K( n# M
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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. 5 B& K/ H0 C+ Z: P( ]
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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. ; H% |6 C0 f5 k! Q& Z( Z2 `
% U- K) \1 d2 V- A$ g, jHis 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. 4 Z- A. G* x; k' b
1 L! E; X& p! M4 i- x9 G1 }- t% M: N"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. # J. q" M0 j; s; |" c
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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. + i6 W1 h" z. o9 }6 p
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. : j9 ^- R3 n4 ]# v
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"We do 95% of the sales in the real estate market," Pratt countered. J8 b4 S V. ^
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Let the good times roll.
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8 w- x$ v' Z, `7 @# Y# DPrevious story: Bottom Line
) E2 x! q# X/ ANext story: Building permits hit record
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