Muskoka Real Estate Market Update FALL 2012

The recreational property sale market has, for the most part, stabilized in 2012, both in terms of sales volume and sale prices. Sale prices have steadily declined from their peak in 2007. It would appear that in 2011 and now 2012 more realistic pricing by sellers has resulted in a period of consistent sales. Having said that the market place remains price sensitive. Buyers are now more discriminate and will simply not pay what they perceive to be inflated prices.

Over the summer months the Muskoka and Haliburton Association of Realtors amalgamated with the Orillia Board. The new association is now called Realtors Association of Ontario Lakelands. In the future market data provided by the new association will include data related to the Orillia and region market place.

At the end of September the Association reported 81 recreational property sales for Lake of Bays. This compares with only 63 sales for the same period in 2011, representing a 28 percent increase. On the Muskoka Lakes the increase was modest. This year Muskoka area realtors have reported 184 recreational property sales to the end of September. Last year 182 had been reported. The overall market for the entire Association produced mixed results. The Association reports 671 recreational property sales for this year. This compares to 611 for the same period in 2011, an increase of 9.8 percent.

This data reflects a market that has changed little since 2010. Sales have, with some variation, remained consistent. It is prices that have drifted downward. It is the more realistic sale prices that have kept the market robust, notwithstanding the many economic issues, both in North America and further abroad that have had negative impacts on recreational property sales.

Compared to last year inventory levels are slightly lower. In Lake of Bays there were 125 active recreational properties available for sale at the end of September. This compares to 139 in 2011, a decline of 10 percent. On the Muskoka Lakes there were 312 properties available for sale, a 5 percent decline compared to the 329 that were available at the end of September 2011. Overall, for all trading areas, the Association reports 1155 properties available for sale, again a 5 percent decline from the 1218 that were available last year at this time.

The decline in available inventory appears to be working in lock step with improved reported sales, at least for the most part. Inventory levels are now so low, however, that sellers can anticipate immediate increases in sales prices.

Chestnut Park and its sales representatives continue to dominate sales in the region. In the Port Carling area, Chestnut Park agents outsold the next nearest brokerage by 58 percent more dollar volume of sales. The average sale price of properties sold by Chestnut Park’s agents since April exceeds $1 Million with total dollar volume of sales approaching $160 Million. With the affiliation with Christie’s Chestnut Park and its agents are the pre-eminent brand for high end sales in the Muskoka Lakes and Lake of Bays.

Going forward we should anticipate a similar market for the last three months of 2012 and then into 2013. The Ontario economy continues to be weak with no real growth forecast in the foreseeable future. The key to sales, as has been stated in previous market reports, is realistic pricing. There are buyers for recreational properties, but they are discerning and expect value when they purchase.

Prepared by: Chris Kapches, Senior Vice President and Legal Counsel Chestnut Park Real Estate Ltd., Brokerage