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( F3 k8 @; X& \8 Y Thu January 11, 2007 www.edmontonsun.com! t v2 d' s6 d _4 s; |) a* e
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Thu, January 11, 2007, n" f: J/ K1 Y7 G" J0 ], A
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
! r6 s) D6 h; G' bBy NEIL WAUGH, EDMONTON SUN1 E, j/ d+ @2 L" \6 ~9 }
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, `) ~) L+ P5 sThey'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. - i$ }. ~0 } j P4 S" V
h! ^, |- g0 x$ J, HDon'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' ! Q/ f( J h+ x0 o6 n8 N1 F0 C
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, e$ o. e- f# j5 { X$ E( Z"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. $ L' }1 n. x1 D- I0 Q
, z) y4 A( W3 ?, k"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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1 p) z& I& C9 h& L; {"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." 4 l' ~; X+ m3 V* F; x# G
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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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; X* x5 x1 O7 m1 {, Z0 j4 f"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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+ r6 {7 T. B8 ]"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. ( i; ?& u; h( r) s
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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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# t" e) a: C: R4 S1 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. 7 O& z2 z- Y! K; U2 e; Z% Z, D
1 D6 k6 V( D; HOver 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. O$ M! c: \# A1 u
% l! }# j3 M' `3 e# ?"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. ( g K. \2 f1 O
2 k3 u* s5 g, USo strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share. 6 O& N! q/ ~) Z8 t2 z
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. 4 r- `! S* r( P) r: U% g- m
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"We do 95% of the sales in the real estate market," Pratt countered.
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# k' v+ s. D y% q( C3 b$ `% XLet the good times roll.
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