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2016 has proven to be a year of significant increases in the Muskoka real estate market, with double digit percentage growth in unit sales for Muskoka residential and recreational properties. Muskoka average sale prices have jumped 10.4% for recreational properties and 7.1% for residential.
Muskoka vacant lot sales continue to climb, up 32.5% for recreational land and 34% for residential land, which indicates a strong, couple years ahead for the builders in the area.
The sale to list ratio improves with Sellers selling on average 3.3% below list price as opposed to 5% in 2015. Doesn’t sound significant, but on a transaction of $1,000,000, that represents $17,000.
The days on market have dropped from 90 days to 77 days for recreational properties, comparing 2015 to 2016 and 73 days to 55 days for residential. You will see later that part of the reason for this is the lower inventory numbers for 2016 compared to 2015.
Are we in a buyer’s market, balanced market or seller’s market? The list to sale ratio is used to determine the state of the market and is calculated by dividing the number of sold properties by the number of listed properties. Recreational properties for the first time in many years has edged into a seller’s market at 56.4%. The seller’s market is when the number of buyer’s wanting homes/cottages exceeds the supply or number of homes on the market.
Residentially we see a significant increase to 74.8%. Note - the yellow section of the graph shows the significant decrease in the number of listings for 2016, driving up demand and consequently prices. Although sellers are quite happy with the improving market, it’s still critical to price properly. With residential properties, approximately 25% didn’t sell and 54% of recreational properties didn’t sell in 2016.
When were most Muskoka cottages or Muskoka homes being listed and sold for 2016? The graph below shows that recreational properties were mostly listed in March, for presentation at the Cottage Life Show, Toronto International Centre and then again in May, with the sales remaining fairly level from May through to September. In my opinion, it’s best to list in May for recreational properties. The ice is out, the weather is improving and sales take a big bump this month.
Residentially, most homes are listed in May, but March, April, June, July & August are significant as well. Again, my suggestion is the same for residential properties, to list May/June, sales are strong all summer, but wean slightly in September which can be attributed in part to kids going back to school and being settled before school starts. The higher end residential market ($500,000+) is consistent throughout the year with equal sales volume in the spring, summer and fall months. List higher end residential properties when your property shows the best for maximum impact out of the gate, therefore may be better in June.
The following chart shows sales by price range for 2016. Unit sales for recreational properties over $1,000,000, has increased 43%, compared to 2015, where there was only a 12% increase in unit sales, under $1,000,000. This is naturally attributed to the rising prices for recreational properties, but also quality and increased demand for a higher-end Muskoka cottage properties. There are still options for buyer’s with lower budgets – 44% of cottages sold were under $500,000 in 2016 and still many being sold between $200,000 and $400,000.
The Residential market in the $300,000 to $400,000 price ranged increased 39.6%, becoming the most common price range for a home in Muskoka with 215 units being sold. There was a large increase in the $500,000 to $750,000 price range, attributed mostly to our growing demographic of retirees moving to Muskoka from the GTA. These statistic are for all of Muskoka, the next graphs deal specifically with the three main towns.
The average price for a residential property in the larger towns has increased to approximately $290,000. Huge gains in average price for Gravenhurst with an exorbitantly higher amount of sales over $500,000 than in previous years. Possibly due to the retirees moving to the most southern town, closest to the GTA, giving them the ability to visit with friends and family that still reside around the big city. Unit Sales increased as well for all three towns, with the most significant increase being in Huntsville at 21.2%.
The graphs below illustrate the activity on the BIG lakes in Muskoka. Cottages on Lake Rosseau and Lake Joseph continue to be the most desirable and highest priced with an average cottage sale price of $2.2MM for Lake Rosseau and $2.3MM for Lake Joseph. Followed by Lake Muskoka and Lake of Bays having an average cottage price of approximately $1.25MM. Then the Huntsville chain of lakes with an average cottage price of $780,000.
All lakes have seen an increase in value with the exception of Lake Joseph, but this is attributed to a sale of $12,500,000 recorded in 2015 and no sale over $10,000,000 recorded in 2016. Rosseau however had a sale of $11,400,000 which attributed to a significant increase in average cottage price for Lake Rosseau for 2016.
For the next graph, I’ve removed all the big lakes mentioned above. The average price for the smaller lakes is now close to $500,000, up 12.3% from 2015 and the unit sales increased 23.3% for 2016 over 2015. You don’t need to pay a million+ for a cottage in Muskoka. 44% of the cottages sold were under $500,000 and still many being sold between $200,000 and $400,000.
It’s difficult to tell, but for the residential market, I see a continued seller’s market, with low inventory, therefore rising prices. People wanting to move within the towns are less apt to sell when there’s so little to choose from as a buyer. The higher end market ($500,000+) will continue to grow as more people migrate from the GTA to the Muskoka area, selling their $1,000,000 city homes, banking some dollars and purchasing a Muskoka home in the $500,000 to $750,000 price range.
The recreational market will continue to grow as well, but not at the pace of the residential market. These properties are discretionary spends, not a necessity and with the baby boomers getting older more recreational cottages will come to market, keeping the inventory reasonable for the amount of buyers looking.
The kick-off to the recreational market begins with the spring Cottage Life Show at the Toronto International Centre. This is a great opportunity to interview agents whether you are buying or selling Muskoka Real Estate. If you are selling – here are some questions you may want to ask:
What is your experience and education?
What is your marketing strategy?
What is the price range of most of the homes you have sold?
What sets you apart from other agents in Muskoka? How many homes or cottages did you sell last year? What’s your sale to list ratio?
What’s your average days on market?
Is this your full-time job?
What designations or certifications do you hold?
If you are buying, you need to work with an agent familiar with the Muskoka market, values vary dramatically in different areas of Muskoka. A luxury cottage on Lake Rosseau could be 4x the price of a luxury cottage on a small lake. It is important to make well educated decisions.
Whether you are buying or selling in Muskoka you need someone with experience, an agent that makes real estate their full time profession. When searching be sure to work with an agent who is knowledgeable and has a proven track record. The Aben Team has the expertise – earning the prestigious 2015 National Chairman’s Club Award, which represents the top 1% sales of Royal LePage agents in Canada.
Statistics are sourced from The Lakelands Association of Realtors®.
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