Healthier outlook: New homes industry anticipates market strengthening through 2021
Mike Selinger, Calgary regional president of Cardel Homes, says builders and partners worked successfully to meet buyer interest in 2020. PHOTO BY CHRISTINA RYAN /Calgary Herald
As the calamity that was 2020 slides into the mist, pressure is mounting on 2021 to be, at the very least, an improvement.
For Calgary’s new home building community, 2020 wasn’t that bad and 2021 could be equally “not bad.”
“We had to make adjustments, like all builders had to,” says Mike Selinger, Calgary regional president of Cardel Homes. “There was a lot of value re-engineering and negotiating with our trades and suppliers. They were fantastic, working with us to hit the price points customers were comfortable with.”
Despite the challenges, he says buyer demand was still there in 2020, helping Cardel to meet sales targets. But, not without a big dent in the bottom line.
“Everybody took a hit on profitability, big time, but we found a balance that worked for us,” Selinger says.
Rob Roach, director of research for ATB Economics, says housing starts from January to October were down by 16 per cent compared to 2019. Conservative targets, streamlining construction and adjusting sales practices kept builders going and astonishingly, prices on single family homes remained stable.
“We might have expected worse,” he says. “People haven’t panicked, despite high unemployment and a tremendous amount of pain. It hasn’t led to people having to sell or foreclose — we’re not there. That’s kept prices stable and as we look ahead, the vaccine may change the game in a very good way.”
Cardel builds in Cornerbrook in the northeast, Walden in the southeast and is the builder/developer of Shawnee Park in the southwest. In 2021, the builder will open show homes in the new Dream community of Alpine Park in the southwest and has committed to develop another new neighbourhood called Silverton.
“We have 175 acres just north of Belmont (in the city’s southwest) with a targeted launch date in Q3 2022. Even with COVID-19, we’re still looking to execute some growth projects,” Selinger says.
Eric Carlson, president of land developer Anthem United, says that like everyone else his company fell into “Covid Canyon” in early 2020. The hope and optimism at the start of the year fell during the first lockdown but rose as demand returned in summer.
“Interest rates were low and 90 per cent of people in Calgary didn’t get laid off. They were stuck at home and were thinking things like, ‘This place is too small — we have to move up.’ This created opportunities for us. Our builder partners started selling houses,” he says.
In 2021, Carlson says job and population growth will drive home sales. He predicts positive job growth by the middle of 2021, giving people the confidence and income to buy. Population growth will take more time.
“There aren’t too many international people coming, but there will be immigration from other places in Canada,” he says. “I think 2022 is going to be a great year. We might not get our swagger back, but we’ll feel a lot better about life.”
Anthem United’s current projects include Belmont and Sirocco at Pine Creek in the southwest; Cornerstone in the northeast; Wedderburn and D’Arcy in Okotoks; and Chelsea in Chestermere.
A new phase of Chelsea will hit the market this year and on the horizon is Glacier Ridge in Calgary’s northwest, a 732-acre joint venture project with Ronmor Developers. The 10-year plan includes 4,135 single-family lots, 87 acres of multi-family development plus a firehall and a high school site.
Glacier Ridge squeaked in before the City of Calgary put the brakes on new development in fall 2020.
“As a developer, I’m always pro-growth, but it was the right thing to do. There is still some momentum, but there has to be an adjustment. It’s a complicated time and the world is grouchy right now,” he says.
Veteran developer Qualico will move forward in 2021 with Ambleton in the northwest, Vermilion Hill in the southwest and Painted Sky in Langdon.
Not faring so well in Calgary is multi-family housing. According to the Calgary Real Estate Board, the median price of resale apartment-style condominiums fell by 14.49 per cent in 2020, taking an average 73 days to sell. Yet, the second and third quarters of 2020 were hectic for University of Calgary Properties Group, developer of University District in the northwest, which is exclusively multi-family.
Cambridge Manor, a senior living development operated by the Brenda Strafford Foundation opened in the summer; new projects by Truman, Homes by Avi, Brookfield Residential and Gracorp Properties launched or were completed and the main street retail district finally opened.
“There were some great milestones achieved, but the impact on the retail sector is much more dramatic than what people would have predicted,” says James Robertson, president and CEO. “We had to update some of our tenants. Some couldn’t afford to keep going, and we had to work to maintain retail operations in a very different economic environment.”
Robertson is also the 2021 chairman of BILD Calgary Region, helping to navigate the association through the remaining days of the pandemic and an uncertain economy.
“It’s a challenging time for many, from suppliers to renovators to home builders. We are all very nervous and also optimistic about what a vaccine might bring and what 2021 will look like by the end of the year,” he says.
Roach says 2020 is behind us, but nothing has really changed when the year turned over on Jan. 1.
“It’s still winter. We’re still facing restrictions and the vaccine is just getting started. We might have to think of summer 2021 as the real start of the new year,” he says.
For The Calgary Herald