In the spring of 2013, when John and Tammie Onslow put their suburban north Calgary house on the market to relocate to the inner-city, their short– and long-term buy-sell strategies seemed to be unfolding effortlessly.
The couple, in their 40s, and their two children, had been living in the Rocky Ridge neighbourhood along the city’s northern edge. They were tired of the daily work-and-school commute they’d done for a decade and wanted something more spacious and modern.
Mr. Onslow, a vice-president and portfolio manager of a big bank, was at the point in his career where this wish list seemed doable. His wife, an interior design consultant, worked for a building developer.
The pair settled on a 1954-era house in St. Andrew’s Heights in the inner-city northwest. Seventy-year-old poplar trees cascaded the streets with views of downtown, the river and a famous tobogganing hill. It was also close to a private school for their daughter.
They plunked down $950,000 for the house and the lot – opting to tear down and re-build a 3,200 square foot modern home in keeping with the traditional motif.
Upward markets bolstered the couple’s confidence their suburban residence would sell within a year. The following month it sold for $1.3-million. Only now they were stuck; their dream house wouldn’t be ready for two years.
Mrs. Onslow`s employer had just built an upscale 2,000 square foot, two-storey, three-bedroom, duplex in Killarney, close to downtown, in the city’s southwest, which she designed. The listing price was $900,000. The couple got a deal for $150,000 less than asking.
Things were looking rosy. Selling in suburbia had been a breeze so, naturally, they thought, this too would be a cinch. The couple would certainly recoup the house’s original $900,000 value. And by selling presumably in mid-February 2015, there would only be a short overlap between selling the temporary and relocating to the new build by April.
They had a trusted relationship with their real estate broker of 14 years, Len T. Wong, owner of Len T. Wong and Associates Re/Max, who had already helped the couple sell three houses. With Mr. Wong’s and Mr. Onslow’s combined knowledge of oil-price plays and the current upturned market, there was every reason to be optimistic. When the family bought a trampoline for their backyard, Mr. Onslow told his seemingly displeased neighbours, “Don’t worry, it will be gone soon.”
So when oil took a nosedive, toward the end of last year, the Onslows were gobsmacked. In every market downturn there are people who get caught in the undertow. It looked like the Onslows would be one of them.
Mr. Onslow says Mr. Wong advised him and his wife to push their Killarney listing date forward to mid-January at a starting price of $849,000 – $51,000 less than he and his wife hoped to sell it for.
He also hoped for a long closing date so “we weren’t out on the street a month before our new house was ready.”
Equally worrisome was the prospect of potentially having two mortgages on his hands should selling become stalled. “Our new [house] in St. Andrews Heights is [now valued at] $2.5-million so I really didn’t want that plus this one in Killarney,” Mr. Onslow says.
Things took a surprising turn when Tammie Onslow arrived home from work one day in December and was “dumbfounded” to see a for-sale sign on her neighbour’s side of the duplex. A quick public listings check showed the house marked at $840,000, nearly $10,000 less than the Onslow’s agreed-upon list price – for “the exact same square footage and layout,” Mrs. Onslow points out.
“We were in shock. My wife phoned me and I think she used some swear words,” Mr. Onslow says.
“I was horrified. My heart leapt into my throat. I [didn’t] need competition right next to me,” Mrs. Onslow says.
Mr. Wong and his clients set a new price of $839,000 “to try and undercut them,” according to Mr. Onslow.
It got worse.
All of a sudden, multiple properties went up for sale in their neighbourhood. “I’m a runner and I see all these new houses popping up and they’re not even listed on the MLS listings yet,” Mr. Onslow says.
“Every place looked like my place – identical properties that are 1,800 to 2,200 square feet. In just one week I saw 10 new listings and only one sale.”
The added sight of nearby teardowns and infill excavations contributed to his anxiety. “I said [to my wife] ‘We’re not going to make what we thought we were going to make.’”
As his list price kept dropping, his nerves increased, especially as many of his senior management clients in the oil-and-gas industry were telling him about the growing number of layoffs in Calgary.
“I’m a numbers guy as well,” Mr. Onslow says. “You always want the top dollar and I knew I wasn’t going to get it. … As time went on it just seemed to decline and my equity that I was taking out of Killarney got smaller and smaller.”
The couple kept lowering their listing price to stay on par with what other homes nearby were selling for.
“We wanted to keep under everybody because we needed to sell it; we needed to have the advantage,” Mrs. Onslow says.
By January the neighbours sold their adjacent duplex for $840,000.
The Onslows dropped their price to $829,000, and then further to $795,000 four weeks ago when a conditional offer finally came through.
“The whole situation irks me with what has happened to the value of the homes in Calgary,” Ms. Onslow says. “I know the value of this home. I designed it. … We didn’t get as much for it as we could have or should have.”
The couple know they gambled and lost. They could have sold last year and rented a place to live in while their new home was built.
“We talked about that and we decided against it. … I did not want to move twice and we didn’t feel it was a risk. We sold so many houses and this was the one I thought would sell in a day.”
She advises others in a similar situation to opt for the filler rental unit. “Do it – especially in Calgary’s market – because you never know,” she says.
When the conditions finally came off last week and the sale was a go, the couple was relieved. “I put my hands up in the air, I was so happy. Our office has no walls and I [screamed] ‘My house is sold!’” Mrs. Onslow recalls. “A humungous weight has been lifted.”
She admits the couple’s minds are already racing to the next steps: “When John came home he said, ‘So should we start packing now?’”