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August 28, 2007 1 ~4 _1 N; Z+ |1 e- w
5 j4 M* D/ X) Y: E0 fBuyer's marketHome sellers forced to slash prices & ^5 J& s8 L" J, d1 @7 Y( n4 B
By 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. ) `) w5 a( J* m4 p
4 [1 i+ O+ A) h# K# g& IAnd 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.
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& o1 t' [9 z' c$ x# \"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. , S) W' f" P6 ]: t3 F1 P5 S
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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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% d, y3 _5 P5 @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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/ F7 Y6 V' D+ P9 L"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. 6 w2 m, W9 {& Q- i! K1 |6 f: L
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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. 4 ]+ ^1 q) V& T/ S+ V
2 z; G* P2 `: y+ V. H. H% nCondos didn't fair much better, with 79% going for less than the asking price.
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"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 C5 m* o1 S( T
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He said many sellers are knowingly asking for more than their home can fetch.
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; a2 M2 e5 Z6 F# w; S A"And quite frankly, the realtors are getting a bit frustrated," Hall said. % H1 G9 w3 T" p+ D( J4 b: r0 O
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"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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- D/ e2 z+ [6 B- n D/ j: P3 _There are several theories as to why there are so many homes on the market. ( }+ y& v8 ~+ S7 G( X k5 D$ u1 [
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Carolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property. . k4 a: y" @& [2 u7 g5 W
9 p8 k2 }% Y) \" Z' s |" X6 [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. ; E8 d+ Q/ e! p% Z& L3 u
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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.
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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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Hall said many sellers with homes on the market in Edmonton today won't sell. & s' ?' J% u- w) I: y, b0 ^
{/ |* W$ n3 ?) q$ ^"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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3 B, n! N* w0 B$ ?+ DThe 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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