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August 28, 2007 7 F* T3 }) A" ]- a5 R! f; c$ q8 c
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Buyer's marketHome sellers forced to slash prices
) ]/ K; f) U, X" W, }7 O! wBy FRANK LANDRY, CITY HALL BUREAU
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Home sellers are slashing their asking prices by tens of thousands of dollars as Edmonton's once sizzling housing market continues to cool, says a city real estate agent.
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3 A2 h6 m0 h, ]; DAnd new figures from the Edmonton Real Estate Board show the vast majority of sellers are now getting less than they're asking for - a stark contrast to the bidding wars of a year ago that routinely forced buyers to pay more than the list price. % ?2 Q. I2 c1 N) \
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"There's tons of stuff on the market. There's twice as much inventory in residential real estate today as there was a year ago at this time," Re/Max agent Abe Hering told Sun Media yesterday.
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"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced."
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As a result, Hering said he routinely advises clients who've had their homes on the market for awhile to drop their asking price by 10% in order to remain competitive. On an average $417,000 single-detached home, that works out to more than $40,000.
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"There's no sense reducing any product by 5% because it just doesn't work. We're seeing reductions of 10% and more," he said.
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Jon Hall, with the Edmonton Real Estate Board, said 85% of single family homes that sold over the past 30 days went for less than the asking price. On average, the final figure was nearly $12,000 less than the seller was seeking.
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Condos didn't fair much better, with 79% going for less than the asking price.
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: j9 F. Z( K" i* V2 A# M"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said. 4 A# |" d2 }4 \6 w) ~2 O
" x* v( Y! q+ N! OHe said many sellers are knowingly asking for more than their home can fetch.
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"And quite frankly, the realtors are getting a bit frustrated," Hall said. - ?, S# Q0 x; t1 i. v6 I
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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There are several theories as to why there are so many homes on the market.
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. ! {. @( j% \1 v/ @
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Other people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said.
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Pratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. 9 p, g. u) R: U# j
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Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold.
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"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number."
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, K4 F* S/ F4 S; |. kHall said many sellers with homes on the market in Edmonton today won't sell.
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"It would be fair to say a lot of listings will melt. They'll just disappear," Hall said. "They'll just be withdrawn after a typical 60- or 90-day listing period."
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7 _ x* ^! }6 |) m3 WThe Edmonton Real Estate Board recently reported there was virtually no increase in the selling price of single family residence in July. That month, condo prices went up 2.5%, while townhomes increased 1%. The figures for August are expected to be released early next month. |
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