The Sky is Falling
The Sky is Falling
And Other 2015 Real Estate Predictions
January 20, 2015
by Calla Mitchell, B.Comm
Marketing Director, Maillot Homes
Real Estate Agent, Maxwell South Star
If one were to believe the news, we’d be forced into the rather awkward mindset of thinking the economy is crashing horribly but in a month or two everything will be fine. Every day we are bombarded with articles of hope and even more of fear regarding the random and varied opinions about what will happen in the coming months of Calgary Real Estate.
We've heard projections of recession – The Conference Board of Canada has been quoted as saying that if oil prices stay low the province will slip into recession. Scary stuff.
Let’s put that in perspective for a moment.
The technical definition of recession is defined as 2 consecutive quarters with a decline in GDP. This means that if we had a run of several stellar years and then for half a year we slipped back to an average state of being, technically that is a recession.
At the same time, Calgary Real Estate Boards Outlook Conference just recently predicted a rise in inventory towards a more balanced market, a slowdown in growth but not a drop in price.
So far, it’s not terrifying.
All that being said, we know that the Alberta economy is driven by oil and gas. We’d be naive to think that a drop in oil prices will leave us unscathed in the real estate market. So what are we to believe?
Oil and gas makes up a significant part of the Alberta economy. It is true that the economy will begin to slide in the face of a prolonged decrease in oil prices. That’s true any day of the week. The question becomes how long the prices will remain supressed. Just this week there were predictions of oil rebounding to the $70 - $90 dollar mark by the end of the year due to non OPEC nations reducing production and eliminating the glut of oil currently on the market. But again – that’s prediction. Not fact.
Frankly, no one knows… we’re all taking educated guesses.
Here’s what we do know.
This is a very different situation from 2008.
Last year Alberta had a record year in net migration which should result in some residual pent up demand here in the province. Interest rates are boasting historical lows supporting the ability of Albertans and Canadians to buy homes. The Canadian dollar is currently low – which means all of our exports just went on sale supporting our national GDP. All the while, the global economy is not verging on meltdown the way it was the last time anything like this happened. In fact, the US is having a pretty good start to the year. The lower oil prices has bolstered their economy. Yes, oil prices are low – but this is not the 2008 recession coming back to haunt us.
The truth is, the cure for low oil prices is… you guessed it, low oil prices. A significant drop in oil prices drives economy resulting in demand for more oil. The eventual result will be a reduction in surplus which is what is driving this whole situation.
So what does all this mean for the family wanting to build a custom home? Well, first of all, a little fear of a market slowdown will create a little more negotiating room for anyone wanting to buy property. Sellers are concerned that prices may drop in the future – so there’s a bit of an unseasonal rush to market hoping to sell before prices potentially fall. Potential buyers are taking a wait and see approach causing an increase in overall inventory. In our opinion, this isn’t going to result in a massive drop in price any time soon, but every little bit helps, right? If there does end up being some ‘wait and see’ attitudes, it should relieve some of the pressure the trades have been under the last few years potentially opening up schedules and allowing for more competitive pricing.
A little bit of a slowdown is not a bad thing. Things have been going gang busters the last few years – and growth like that simply isn’t sustainable.
Our advice? If you’re looking for land, keep looking. This is true especially if you have your eye on inner city land – it’s scarce these days. You don’t want to miss the perfect spot just because there’s a possibility that things could change 6 months from now. Things can always change 6 months from now. That’s the rule. After all, you likely plan to keep the home you build for at least 5- 10 years, maybe more. You will see prices fluctuate a half a dozen times or more between now and then. Simply use the current market conditions to negotiate in your favour as best you can. Conversely, if you have land and want to build, it’s a great time to start negotiating prices and terms of contracts. Pencils tend to be a tad sharper at times like this.
Warren Buffet once said, “Only buy something you’d be perfectly happy to hold if the market shut down for 10 years.” We think that’s pretty good advice.
Know as well that we at Maillot Homes are always here to answer any questions you might have. Calgary has been good to us – spending a few minutes offering some free advice is just one of the ways we like to give back. You can always count on us for an honest opinion without the sales pitch.
Happy 2015 everyone. It’s going to be an exciting year.
Amazing Survey Results
The Professional Home Builders Institute along with Alberta New Home Warranty have spearheaded a new independent survey specifically focused on the home building industry. The results are in and Maillot Homes is proud to announce that not only did we greatly surpass industry averages across the board, we also received Best in Class in multiple categories! Best in Class is reserved for the absolute highest score received by any home builder in all of Alberta.
We are proud and excited to share these results with all of our friends. You can review the scores received by Maillot Homes and how it compares to the industry by clicking the ranking report link below.
Alberta New Home Warrenty/ PHIB Survey Results
Build Watch - Demo
It all starts with the demo.
As much as we hate to talk about it sometimes, a new inner city home usually starts with the demolition of the old one.
While we strive to be as environmental as possible - houses are stripped of anything salvageable in an effort to reduce the impact on landfills - the demolition of the older, often long neglected structure, is inevitible to make way for a newer, up to date and efficient home.
Follow this blog, as we chronicle the custom home building process. From the demolition of the old to the final touches of the new, we invite you to join us while we document in real time an acutal custom build for one of our very special clients.
And so it begins.... there aren't many amoung us who doesn't have an inner 6 year old boy that thinks this is just a little bit cool.
Looking for a lot to build your custom home in Calgary?
Inner city land seems to be scarce these days. No sooner does a great property with an even better price hit the market, it’s gobbled up but some other land seeker that was just a hair faster than you. And then there are those pieces that sit. You know the ones – they seem great, priced fair – but just sit. You know there’s a reason for it. But what is it? Then of course there are the dramatically flawed and overpriced plots that you think no one will ever buy, until someone does.
And then you find it. You’re standing in front of the perfect lot for your new custom home. It’s just the right size, a quick commute to work and close to your kid’s school. You heard of it through the grapevine and it hasn’t even hit MLS yet! You actually have a shot at this one.
Now you have a decision to make – and the questions start racing through your head! Am I making the right decision? Will we get the view from the second story? Can I build a second story? What about a third? What are the setbacks here? Can I have a front driveway? How big of a home can I build? Can I have an upper balcony? Can the custom home that’s perfect for my family be built on this lot?
Believe it or not, every single one of those questions is a valid concern and the answers should not be assumed. The rules change from neighbourhood to neighbourhood, and yes, even just across the street. And you don’t want to start making compromises before you even start your drawings!
Before you sign on the dotted line, let us help. We can help you determine what your set backs are, what the maximum house size is, and identify height restrictions specifically for your lot.
We always hope we’re going to give you fantastic news! But if there is some oddball right of way running right through your property, or if that street is slated for a future through fare or community park, you’d want to know before you sign on the dotted line, wouldn’t you? This is your dream home after all. We believe in taking the time to plan and research. As a result we’re a pretty efficient custom home builder, because we’ve taken care of the big stuff up front.
If you have a lot that you are thinking of buying, and need a second opinion from someone that has most likely built right down the street, give us a call. There is no charge or commitment required. Or, if your question is of a general nature, simply post it here. And we’ll get back to you with an answer as soon as we can.
Hell or High Water. Calgary cleans up.
As you know, on Monday, Maillot Homes closed the office to help with the flood cleanup effort. Much of the team was there Tuesday as well.
The sight we saw when we first approached those homes most affected by the flood was something I hadn't prepared myself for. I thought I knew what to expect. I had seen the images on the net and TV but somehow seeing it in person was far more impactful than I had anticipated.
The mud and silt was everywhere. There was a line, sometimes faint - sometimes quite solid, that traced every wall at the exact same height - as though an invisible child had walked along with his stick thumping against the fence behind him. It marked the level where the water had been. The realization that these homes had been utterly submerged past the sills of the first floor windows seemed incredible.
We were there to shovel, to tear down, to remove, and to dry out. We ripped out wet drywall, dragged sopping pillows and photo albums from soggy basements, filled dumpsters with old lumber and family treasures all heaped in to one very large pile that repeated itself over and over in front of many houses, down many streets.
The strength of the people whose homes were destroyed was utterly amazing. A few times I witnessed a teary eye, usually at the prompting of a well-meaning hug. But for the most part all were simply focused on the task at hand. Saving what they could - disposing of the rest. Occasionally pausing to reflect, a flash of remorse, of sadness, and then moving on to the next job. That carpet isn't going to rip out itself. There's work to be done.
The time we spent in the trenches - although so brief compared to the suffering that has been and is still to come for those in the rivers path - will forever change our perspective. There are many of us who would gladly take on a small piece to try to ease another’s loss. I think that's why there are so many volunteers. It doesn't seem fair that those of us on high ground are so unscathed.
We all accept the blessings that have accompanied this tragedy with much gratefulness. The volunteerism, the amazing first responders, the neighbours helping neighbours, and the pride in our city are all welcome silver linings to this very dark rain cloud.
Soon our city will inch its way back to business as usual – and soon, this blog will focus on custom home building. But not today; today we reflect on what has happened, applaud the courage, generosity and resourcefulness we have witnessed, and plan for the healing of this fine city and her people.
Hell or High water. Nothing will keep Calgary down.
Stay safe friends.
Flood Update - Maillot Homes Office closed Monday as staff volunteer for Calgary clean up.
Please be aware that the Maillot Homes office will be closed Monday, June 24th so that staff can volunteer to help with the clean up efforts. We will be meeting at our Maillot Homes property at 1136 Riverdale Avenue SW at 9 am. Staff, clients, trades, suppliers, friends and neighbours are all welcome and invited to join us as we do our part.
If anyone requires assistance please contact us at the number listed on the front page of our website. We will do our best to be available to anyone who needs us during this recovery period.
Stay safe Calgary. Best of luck!
Calgary Flood 2013 - Stay safe friends
It was all hands on deck this morning at Maillot Homes. Every single staff member showed up ready to work - to help any and all of our clients in any way we could. Some didn't know if their own home was safe or under water. Others were ok at the moment but on high alert pending a possible evacuation. Yet all were there ready to serve our clients past and present should they need us. It was one of those moments I was proud to be a part of this team.
On behalf of everyone here at Maillot Homes, we'd like to extend our thoughts and prayers to all that have been affected by this disaster. Yes, we take great pride in the homes we build, but we know in our heart of hearts that it is not the bricks and mortar that is important at the end of the day. Although the loss of a home can be devastating, it is the people - the families - within the walls of that home that is paramount. We join with all of our Calgary family to wish you all the very best in getting through this disaster safely.
Thank you to the many that have offered their homes to evacuees. Thank you to those willing to lend a hand, to volunteer, and even to those who simply stayed home out of harm's way and left the roads to the emergency crews.
Like all crisis, this too will pass and Calgary will rally and rebuild like the strong, proud city we are. We'll get through this if we stick together.
Stay safe out there Calgary.
Welcome to our brand new Maillot Homes blog. We were inspired to create this forum in response to the need we observed for straight forward, information about building a custom luxury home in the Calgary area.
We have been in business for nearly 60 years. And over those 60 years we have witnessed, scratched our heads, puzzled over and then conquered nearly every single challenge imaginable. I say ‘nearly’ because, well, this is custom home building after all. And we are not in the habit of building the same house twice. Every home we build is a new experience.
What we are in the habit of is dotting I’s and crossing t’s. We protect budgets and fight for quality. And yes, we’ve seen every trick in the book. We work with trades that know we know our stuff and respect us for it. We believe in doing things right the first time.
There aren’t a lot of places you can go for quality information on building a luxury custom home, and we want to change that. Whether it’s asking a question about the development permit process, navigating the drawing phase, deciding what your budget should be, or figuring out whether or not the city will actually let you build your dream home on that lot you have your eye on. Well, you’ve come to the right place.
Let us be your guide. Ask us anything you’d like. We remember the way community was 60 years ago. And we’d like to bring a little of that back. So tell me neighbour, how can we help?