Remarkable ‘deals’ have presented themselves to the Calgary home shopper. Ample inventory and poor sentiment (thanks again to our self imposed recession brought to us by our virtuous leaders), have, after five years really started to punish the Calgary infill building industry. Notable among the disasters and business failures have been the builders basically selling their inventory at rock bottom prices just to move it.
To the buyer who is perhaps a little less discerning, willing to look to a less premium location within a good community, you can see plentiful sales involving utter builder capitulation on pricing. This has resulted in the rare opportunity for a buyer to pick up a new home where the builder has;
purchased the land and absorbed the cost of the market price of a typical 50 ft RC2 property in the infill communities
demolished the old house and funded the design and permitting process and associated fees
subdivided the parcel into two lots
completed construction and funded/financed this entire process and done the work of managing the build, no small task is this; and
Staged/marketed the new home for sale
So in addition to all the items mentioned above, the builder is now willing to sell to the client the home at or about the break even level, and guarantee the house by backing the warranty on it. All of this for zero (or negative) compensation despite a full year of investment, effort and the expertise necessary to build a house nice enough that someone is willing to buy it. If this isn’t a strong signal to jump off the fence and buy one of these properties I don’t know what is.
The business case for this project (or lack of one I guess) indicates this is a property that was sold for at or about the cost of production. While I don’t know the builder behind this build, I can’t fathom how he could fund this land and construction project and sell it at the price he sold it for and break even. If high cost capital was used to fund this project, a loss is almost certain. Hopefully there is no warranty or service expense after the sale!