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Saturday, July 22, 2006

House prices soaring high in Strathcona

From the "Sherwood Park News" this article highlights what the Sherwood Park market is doing, as opposed to the Greater Edmonton area as a whole. The president of the Edmonton Real Estate board points out in the article that even though prices are soaring, they are still quite reasonable compared to the rest of the country. As I blog this, our client M. Elliot, who is a Calgary investor sitting next to me said "Edmonton is the runt of litter just starting to play catch up". I think she hit the nail on the head....

by Dave S. Clark
Sherwood Park News — As Alberta’s economy continues to boom, Sherwood Park’s house prices are rising to heights never seen before.

In June, the average price of a house in the Park was $350,000, according to the Edmonton Real Estate Board, which is a jump of almost $75,000 from last June’s average of $276,000.

“I’ve never seen numbers like this before. It’s nuts,” said president of the board, Madeline Sarafinchan. “The biggest factor is the economy. There is a great deal of confidence in it.”

Another reason for the high prices, is the basic idea of supply and demand. With very few houses on the market compared to years past, the demand is reaching new heights.
Sarafinchan says 74 per cent of the houses sold have had multiple offers put on them, which is staggering. The bidding wars often lead to sales several thousand dollars over the original asking price.

In 2004, the average house price in Sherwood Park between January and June was just $232,000. In 2005, that number jumped over $30,000 to $255,000. This year that number is up $65,000 to an average of $320,000.

Sarafinchan says people are attracted to Sherwood Park because of its large industrial tax base and its convenience to Edmonton.

She says the market has become very strategic since prices started escalating rapidly. Before, if a seller wanted to move in August, the house would be listed in April. Now, they’ll wait until July so they can as much as they can for their property.

It’s a great market for sellers, but it makes it very difficult for buyers, she said.
“What realtors have to do is flag in the computer what their client wants and as soon as something comes up, get there as soon as possible.”

She says one of her clients has to completely put her life on hold every time a potential house comes up for grabs. She drops everything to go look at a house.
The market is even more troublesome for first-time buyers.

“They now have to look for things like condos and mobile homes when before they could have looked at small houses,” she said.

But despite the increasing housing costs, Sarafinchan says Edmonton is still playing catch-up with other Canadian cities. It is ranked 10th behind major centres like Calgary, Vancouver and Toronto.

“Nationally, Edmonton still looks like a reasonable option,” she said.

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