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Thu January 11, 2007 www.edmontonsun.com
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Thu, January 11, 2007
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5 C2 L h/ i# f6 E8 _8 ^Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
' C& U( e/ i3 J2 t; g1 B. FBy NEIL WAUGH, EDMONTON SUN
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+ W: C }* X$ ]; A) XThey're changing the guard down at the Edmonton real estate palace.
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* t! m) v/ \+ s; S$ H- G- PMadeline 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. , f5 a# C$ O9 e
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But 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%. 1 ?$ e8 F5 s3 k! w) H
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'CONTINUED DEMAND' # K2 e" [) S7 c% k
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8 o4 d+ U7 l' c4 P( E+ p"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." 5 }- F' D9 B/ B/ j* v$ G9 }
7 ^+ ~/ @( C: J* ?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& E. z& n% _2 ^
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"There just won't be enough houses to sell," she sighed. , y7 p( o: g1 C6 R
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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. ) c+ q5 o Q; m, R& f
' }7 a" M1 J* m5 u"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." % V1 A& H8 i4 \9 J
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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. : b @$ D' ^- X: g
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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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) s* ?7 A3 \- j6 C" L7 i! e/ x. B5 J! X"There are too many shortages in the system," he shrugged. ! m: p9 p3 z/ V4 I
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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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; t* J, r) B( x/ ?! r7 [9 |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." , s: |! t1 p6 D7 y) b+ h# w
9 n" v, l0 P6 X' B' d& Z& J: ?+ KExpect 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. ) f( a. v# ~4 y2 O; |5 T
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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. 1 S% k8 u( n) s
* d' V8 f+ K1 w"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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) P" G1 g, Y! v: Q9 b" _$ L! ]6 RSo 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. ( m% w; x( n+ I7 t+ I) z
! s. z. O4 n5 _ p; V3 b"We do 95% of the sales in the real estate market," Pratt countered. 5 H# ~3 m9 X1 V. B- s: {/ K
% t- Y; Y6 z6 ?( ?( ]4 vLet the good times roll.
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: ~2 L8 M0 w9 _& {Previous story: Bottom Line" e; V1 q/ l) j) Z- A( [/ t6 E
Next story: Building permits hit record
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