Industry eyeing ‘turnaround year’
Forecasts point to increase in new home sales for 2012
Like a climbing wall, the route to housing market recovery for single-family builders has been steep and challenging.
Although the journey has been fraught with slips, sidesteps, missteps and changes in the economic winds, the Calgary industry is optimistic about the year to come.
“Demand for new single-family detached housing is expected to improve, as employment and net migration continue their strong recovery and mortgage rates remain low,” says Richard Cho, Calgary-based senior market analyst for Canada Mortgage and Housing Corp.
But there’s more spring in the step of builders, because most of them are finalizing action plans for several new communities expected to hit the market as the year progresses.
The increases expected by CMHC, which tends to take a conservative approach to forecasts, won’t be anything dramatic — the call is for 5,500 homes this year compared with 5,000 in 2011.
After working its way through a notso-great 2011, Albi Homes is gung-ho about this year.
“We will be opening seven new show home parades over the next 12 months,” says president and operating partner Allan Klassen. “We are anticipating a turnaround year.”
For 2012, Klassen is calling for 150 Albi sales compared with 100 in 2011.
“We believe that though the world economy is still on some shaky ground, most Calgarians are getting settled into the new economic reality and are tired of waiting on the sidelines,” Klassen adds.
Homes by Avi is also expecting a strong jump in sales.
Homes by Avi Alberta president Alice Mateyko is calling for 283 single-detached sales this year, almost 100 more than last year.
“Moving into 2012, we will be adding five positions in new subdivisions, and combined with a more stable market, we see 2012 as being much improved,” she says.
One of the newer, more popular areas for Homes by Avi has been Sage Hill in northwest Calgary. It’s here that James and Marnie Galbraith decided to buy, and build their first home.
“We were living in the inner city, and it was just too hectic for us,” says James.
“We’re more outdoor people, and here in Sage Hill it’s quiet and it’s easier for us to get to the mountains.”
Renters who tired of “paying other people’s mortgages” with their rent, the Galbraiths bought their 1,800-square-foot home last February and took possession in August.
“We couldn’t have picked a better time to buy, because they say prices are going nowhere but up,” James adds.
Over at Sterling Homes, general manager Bill Bobyk is feeling good about what 2012 has in store.
“For this year, we are projecting 300 sales (year-end 2011 was expected to be between 260 and 270) due mainly to more new subdivisions that we will be marketing,” he says.
Sterling has 19 show homes currently under construction for spring openings.
Prominent Homes president Deep Shergill sees an interesting year ahead.
“We are moving into larger homes, simply because of the lots available to us, so while we may not do 55 homes like we did in 2011, our dollar volume will be higher,” Shergill says.
He does foresee the possibility of a couple of related concerns — a limited land inventory in some areas that could push prices up or send potential purchasers into surrounding communities.
But generally speaking, Shergill feels good about 2012.
Coming off a year of 310 sales, Morrison Homes is anticipating a slightly better sales count in 2012.
“With all new communities up and running and one new one planned we have budgeted a slight increase,” says president Dave Gladney. “I would love to see 2012 as consistent month to month as we saw in 2011 because it allows us to fine tune all aspects of our operation and to meet our clients’ expectations.”
After counting 410 sales in 2011, Shane Homes and Creations by Shane Homes are not sitting back.
Dave Rickett, sales and marketing vice-president, is calling for another increase this year of between five and 10 per cent.
“A lot of that has to do with our land positions, as well as added in-migration that will help offset a growing shortage of labour in the province,” he says.
To further ensure a land supply, the company recently opened up Wenzel Developments Inc., a division headed by Richard Priest.
Peter-john Woolf has a case of conservative optimism, with a forecast of 105 sales this year.
“If the market continues to gain momentum like it did last fall, it could be a lot stronger — but for now, we’re taking a conservative approach,” says the general manager of Broadview Homes.
He says there are some “very positive” signs and key indicators that would suggest a very busy marketplace — strong migration, good job growth, a healthy energy sector, low vacancy rates, and continued low interest rates.
“All of these bode well for the Calgary housing market,” Woolf adds.
After hitting his budget of 20 homes for 2011, Darrell Haase, president of Astoria Homes, is adding five more to the 2012 total.
“The higher end market seems to be quite strong with the majority of our customers coming from or associated with the oil industry,” he says.
For Jayman Masterbuilt, 2012 will be similar to 2011, says president Graham Boyce.
“Our sales budget is up a bit because we are going into new communities with a wider range of products than in 2011,” he says, adding that prices and costs could see slight increases this year.