Realtors are casting a skeptical eye on a Calgary developer's plans to list his family home for $12-million at a time when the city's market for ultra-luxury real estate has been struggling amid falling oil prices.
Jim Quinn, president of home builder QuinnCorp Communities listed his custom-built 10,000-square-foot estate house in an exclusive enclave of west Calgary for $12.25-million, making it the most expensive listing within the city limits since 2009.
Built in 2006, the five-bedroom property features seven bathrooms, a 1,000-square-foot carriage house and a seven-car garage. It was developed as the flagship property among a cul-de-sac of exclusive homes on the city's west side, said Corinne Poffenroth, of Sotheby's International Realty Canada, which is listing the house. It sits on an acre of land and the buyer has the option to subdivide and redevelop the property, she said.
Mr. Quinn opted to put his house on the market just as oil prices reached a six-and-a-half-year low because he is retiring to Vancouver Island, she said. Sotheby's is marketing the property locally in Calgary but also internationally and has already received some inquiries from foreign buyers in the U.S. and Asia.
"Listing now is an expression of confidence in the market for these types of premier, one-of-a-kind homes in top-tier neighbourhoods," she said. "The most sophisticated sellers and buyers and investors do have confidence in Calgary's long-term real-estate market."
Yet the high-priced listing also comes at a time when many realtors say they are cautioning their luxury homeowner clients to lower their price expectations in a softening market.
There have been 33 sales of homes above $2-million within the city limits so far this year, half the number sold by the same time last year. While prices haven't dropped sharply – prices per square foot are down roughly 3 per cent for high-end homes – homes are taking longer to sell. Inventory, particularly of newly built luxury homes, is piling up.
"Are there buyers that can afford a $12-million home? Absolutely," said realtor Thomas Keeper. "But the thing is that there are other properties that are comparable that are just a little bit better priced."
Several realtors also noted the timing Mr. Quinn's listing, given that PGA golfer Stephen Ames listed his home across the street last month for $8-million.
Mr. Ames's home is on a smaller parcel of land, but is 3,000 square feet larger and is a more contemporary design, which is popular among luxury-home buyers, said Rachelle Starnes of Royal LePage Foothills.
"The pricing on this $12-million property is very aggressive and it makes Stephen Ames's property down the street look like a bargain," she said. "And we thought that property was aggressively priced as well."
Mr. Ames's home is built in a more contemporary style that luxury buyers these days seem to prefer, Ms. Starnes said. Mr. Quinn's home is more traditional. "That's a very limited market," she said.
Calgary's housing market took a hit in the winter when oil prices plunged and listings for high-priced homes soared. But the market began turning around in the summer as oil prices staged a brief recovery. That prompted many sellers to start pricing their homes more aggressively in anticipation of a stronger recovery, Mr. Keeper said. Then oil prices began falling once again. Mr. Keeper expects average resale prices will follow, dropping 1 to 2 per cent over the next two months.
The luxury market of homes above $1-million has been especially affected by the oil-price downturn, he said, as sellers compete with a glut of inventory of newly built high-end homes. "What we're seeing is that somebody else will list their home a little bit cheaper than we did and then get their house sold and then we're sitting there holding the bag trying to sell ours," he said.
Plenty of oil and gas executives are eyeing luxury homes in the city, but many are reluctant to pull the trigger on a purchase because they're worried about optics of buying a multi-million-dollar home at a time when their companies are laying off workers and slashing costs, said realtor John Hripko of Hripko Nelson & Associates-Royal LePage Foothills. "Some of them have to be cognizant of their public image," he said.