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Thu, January 11, 2007
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
1 }+ C7 s: g* k$ UBy NEIL WAUGH, EDMONTON SUN4 M9 A) L0 g& V$ U
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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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. q$ X- C- [3 ]6 C1 PBut first, the EREB president's bold predictions and fearless forecasts. , H% B4 Y* m2 P6 j0 ~) g7 y
/ G0 _8 y1 u/ U N& S- }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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"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." # r/ x- X1 W. w) E4 t
- N4 D/ m8 G7 e RShe 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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3 ^5 U5 r5 L. D$ Z$ w3 f" t4 n7 V"There just won't be enough houses to sell," she sighed. 3 X" p/ N2 D1 l6 R' s
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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." # o: y* |, O2 Q
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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. $ j7 F6 P1 A9 j
8 O" h; @: [) a; E3 i' P9 G"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. % c3 v% f' c' M: [
9 f7 t4 l3 a$ B+ w"There are too many shortages in the system," he shrugged. # i8 j8 {- M! @! w5 O' y% b
0 {$ P G `! @) T" s3 Q"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! i* G. s, c; P
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" [) `+ |1 h/ ^6 l9 B/ K8 t. m' jHe also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable." " l6 j+ Z7 I; p$ X% x" L: A
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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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6 _4 `% o3 M3 p% M* k9 G' r- xOver 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. $ c2 f- p4 k6 V% V( @ ?/ I
$ y8 E; R7 ]2 w5 s0 T"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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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. ; T3 ~8 R6 {. f3 Z, ^! a5 L& o
6 X0 |, I- W5 z$ A3 @Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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8 ^. f* O0 b% a% ` H( T5 ]"We do 95% of the sales in the real estate market," Pratt countered. 1 a' y2 G/ E ?$ N( h
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Let the good times roll. 5 I- N8 G8 ?/ ?& x9 B
5 I+ s2 X. `- `+ WPrevious story: Bottom Line, E4 k. Y/ E' K4 ]0 i, Q
Next story: Building permits hit record. c1 g* R+ m/ t; f+ {+ o- \+ d" p
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