Muskoka Real Estate Market Update

The heavy weather that the region experienced this winter and the early spring, including the flooding in many parts of the region, is now long forgotten. The early fall has seen some of the best weather of the year, and with the improved conditions, listings and sales have increased, bringing the market to a status quo similar to where it found itself at this time last year. During the first quarter of 2013, both sales and inventory were off by 20 percent. Market conditions improved in the second quarter, with continued improvement throughout the summer months.

At the beginning of October there were 1236 active listings of recreational properties available in the Muskoka-Haliburton multiple listing service. This represents an increase of 4.7 percent compared to the same period last year, and a dramatic improvement compared to the recreational property inventory available at the beginning of July. Available recreational properties increased in all the trading areas in which Chestnut Park’s agents work with buyers and sellers. On the Muskoka Lakes 341 recreational properties were available, an increase of more than 10 percent. On Lake of Bays there are 131 available properties, an increase of 4 percent, and 311 in Haliburton, an increase of almost 5 percent.

With increased inventory and better weather sales have dramatically improved, matching or exceeding sales results for the same period last year. Although sales for the entire cottage region are slightly off, in the Muskoka Lakes, Lake of Bays, and Haliburton, the market’s performance has been encouraging. 651 properties have been reported sold for the entire cottage region, 37 fewer recreational properties than for the same period last year. On the Muskoka Lakes the results have been stronger. 184 properties were reported sold to the beginning of October, 2 more than last year. Lake of Bays was only marginally off last year’s pace, 81 in 2012 and 79 this year. In Halilburton the results were marginally better, 200 sales this year compared to 198 last year. Compared to the slow start of the year, these results are very impressive.

Pricing of recreational properties continues to be a hinderence to sales. The sale of cottages is rarely driven by necessity. Consequently sellers can be more leisurely in selling their cottages, often settling on asking prices the buyers do not perceive as reflecting value. Pricing of cottage properties is more complex than urban markets: location, exposure, grade, acres, water depths and access can all impact value in dramatic ways, making direct comparisons with properties already sold very difficult. But as sellers are not motivated by necessity, buyers most often seen even less motivated. As a result properties that have not been competitively priced will take a considerable amount of time to sell, with, in many cases, numerous price reductions.

Prepared by: Chris Kapches, CEO Chestnut Park Real Estate Limited, Brokerage