Calgary’s struggling high-end housing market sees ‘complete turnaround’

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Homes marketed by Arch House. Currently for sale, 1A house.Hayden Pattullo

Last summer, at Calgary-based design-build firm Studio North, Mark Erickson and his partners decided to sell the Withrow House, an award-winning historic property the team renovated in the city’s northwest.

Dissatisfied with traditional property listing methods, they decided to market the home themselves. “When we sold the Withrow House, we really put the story out there,” says Mr. Erickson. “We put our blood, sweat and tears into building and designing this property, [so] We had this really rich, meaningful story to convey to the market.”

And it worked.

After just two months on the market, the $1.6 million home sold. And while Mr. Erickson believes this was down to the studio’s brand manager Brendan Kane’s remarkable storytelling, it wasn’t the only reason.

In late 2021, the freestanding segment in Calgary was showing strong signs of recovery, and a tight market propelled sales even in the $1 million+ price bracket, a niche that has struggled since the 2014 downturn. “What we’ve seen during the pandemic is a complete reversal,” said Ann-Marie Lurie, chief economist for the Calgary Real Estate Board. “Sales are on track to hit record levels of over $1 million [showing] an extraordinarily strong sales activity.”

On Jan. 4, the CREB reported that 27,686 homes were sold in 2021, nearly 72 percent more than 2020 and more than 44 percent more than the 10-year average.

The recovery was driven in part by low lending rates, Ms Lurie explains, as well as rising prices at the bottom of the market. Today’s discounted supply “reflects that conditions are much tighter even at the higher end of the range,” she says, adding that “at the start of the pandemic, the most affordable sector of the market was definitely the tightest, but it’s shifted all the way up.”

Actually in December, supply of homes in the $1 million+ segment was at a record low for four months. Even before the 2014 downturn, supply for this segment would be around seven months, Ms Lurie says. Additionally, the percentage of homes worth over $1 million in the Calgary market also increased in 2021, from three percent to four percent, according to CREB.

While this growth was likely driven by generally rising prices, Ms Lurie believes another factor could be sellers bringing high-end properties back to market as million-dollar homes move back seven years after the downturn – and they move fast.

This is an opportunity Studio North wants to seize.

After their experience of selling the Withrow House over the summer, Mr Erickson said it was clear there was a gap in the city’s luxury real estate market. “When you buy something like a house, it’s a really big investment,” he says. “To really convey what this house is about, it’s important that the designer is involved.”

In his view, the narrative behind a home’s design is often missing from traditional real estate listings. It’s difficult for a real estate agent to convey the subtle nuances of an architecturally designed home. “Typically, an agent just looks at the home, crunches the numbers, and writes a fairly basic appraisal, which is really a cursory appraisal of the home,” says Mr. Erickson.

In this regard, Mr. Erickson and his Studio North partners, Matthew Kennedy, Damon Hayes Couture and Heath Williamson, saw an opportunity to broaden the scope of their services and offer a complementary marketing service to serve an exclusive niche of the high-end market . “I think when we talk about luxury, we’re also talking about architecture, not just a building [and] there should be a higher level of design with it,” says Mr. Erickson.

Conceived as an organization parallel to Studio North, arch house aims to meet the needs of buyers who value quality, attention to detail and higher design standards of a custom designed home with a story. “Once you break that million-dollar mark, you’re buying more than just bricks and mortar,” says Mr. Erickson. “You are buying a lifestyle. They have more expectations of quality of design and quality of attention to detail.”

Architects think about natural light, views and interior design, explains Mr. Erickson. “These are all things that are crucial … and there is no better contact for them than the architect or designer behind them.”

And as this niche gains momentum, Arch House could be just what Calgary needs.

Ms. Lurie says an influx of professionals, drawn by the city’s relative affordability, is expected in the coming years. “We see a lot more work growth in professional and technical services, which tends to be a higher-paying industry,” she says. “So in terms of supporting growth in some of the higher price brackets, that’s a positive development.”

Arch House is currently marketing two high-end homes in the city of Calgary center. Priced at just over $1 million, the value of these properties encompasses much more than what buyers can find in cities like Vancouver or Toronto in a similar price range. Both homes were built within the last five years, are over 3,000 square feet and feature a laneway suite. They feature carefully crafted finishes and state-of-the-art amenities designed by local architects.

But not just any luxury home will make the cut to be marketed by Arch House. “Because we’re working with a pretty niche market, we want to make sure the home meets our criteria and meets our standards for an architect-designed home,” says Mr. Erickson. “It’s going to be a small handful of sales that we do each year and it’s going to be a very curated handful of offers.”

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