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Thu, January 11, 2007
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+ p4 g' E2 j+ ^8 y- J* rPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
6 Q5 d; g) x2 h: V, c1 F+ V0 I1 Q0 yBy NEIL WAUGH, EDMONTON SUN
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) d7 B8 f; ~; t/ PThey're changing the guard down at the Edmonton real estate palace. ' k" c, k* R! D; P$ Y* t
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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. 7 i p3 J+ d0 r: `- B
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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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# X l+ W! g5 y* ]"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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- B* v2 q6 U4 u# E! dShe 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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8 k3 ~8 a0 ~: m& Q) f j: r"There just won't be enough houses to sell," she sighed. 8 i F0 `. r7 L" I5 G6 t
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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." / {2 a/ O: W. P1 a3 C' m
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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. 0 ^( d: ^" s! p2 i2 g, O
9 L0 g a' g0 M6 j/ N8 q9 l( V"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. ' x" C3 O7 O! X# W' ^) o
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"There are too many shortages in the system," he shrugged. 8 k" \3 W' D7 U2 I% Y8 q
2 t2 l; T8 @6 F" K& u"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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( ]" ^" i# t2 D5 u! ?0 G5 V% jNO 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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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. # W a1 n: w5 G6 i( f: O6 i
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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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& c- W2 m v/ P2 F& A6 m"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked.
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; Q6 f2 m: j' J3 s( _7 t+ \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.
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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+ p+ P8 Q" Q1 z8 V
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"We do 95% of the sales in the real estate market," Pratt countered. : p9 c% F/ n6 g8 z( N8 X
$ u9 B; j2 e) m6 e1 P* x6 fLet the good times roll. & z0 k/ X+ t6 J
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