Generation X Driving Increased Demand for Recreational Properties

Once again this year I was asked to assist Royal LePage Canada as an advisor with the preparation of their annual Recreational Property Report.  The report is now complete and the following is a Press Release that is was issued which summarizes the findings of this year's report.

Generation X buyers of cottages, cabins and chalets across Canada outnumber Baby Boomers by almost two to one, according to the Royal LePage 2016 Canadian Recreational Housing Report released today. Still, planning for retirement living is among the most common reasons potential buyers give for the purchase of a recreational property.  The annual report compiles information from a cross-Canada survey of real estate advisors who specialize in recreational property sales.

The survey found that 65 per cent of advisers polled indicated that potential purchasers were considering their retirement needs in deciding to buy a recreational property, while a significant number of respondents (88 per cent) said that potential purchasers identified desired lifestyle and vacationing as their main purpose. Just under half of respondents (49 per cent) said that clients wanted a recreational property as an investment and a little over a third (37 per cent) indicated that low interest rates were a deciding factor.

The family status of the typical recreational property buyer is a couple with children, according to 76 per cent of survey respondents. When asked about the most prevalent age range of current buyers, 63 per cent of respondents identified Gen Xers (36 to 51 years old), almost double the 33 per cent who identified Baby Boomers (52 to 70 years old).

“We found it interesting that a majority of respondents identified retirement as a driving factor for a recreational property purchase consideration, but Gen Xers, still decades from retirement, were identified as the typical buyer in the current market,” said Phil Soper, president and chief executive officer, Royal LePage. “This cohort, having reached a place of stability, and often owners of primary residences in the country’s city centres, is making recreational property purchases for family enjoyment in the near-term and as a key strategy for retirement.”

“Canada’s extended low interest rate environment has clearly provided buyers with the confidence they need to invest in a cottage or cabin,” added Soper. “In contrast to urban home purchase decisions, buying a property on a lakefront or mountainside is much less about interest rates, and more about enhancing lifestyle. Cash savings trump mortgage financing when it comes to how people are acquiring recreational property.”

To view the entire Recreational Property Report report Click Here.  If I can be of any assistance in helping you with respect to your recreational property needs either buying or selling, please do not hesitate to Contact Me, my information and expertise is offered without obligation.

Area MLS® Real Estate Sales Approach $100 Million in April

The demand for area real estate shows no sign of abating and even the cooler, wet spring weather can't seem to quench the appetite for properties across Southern Georgian Bay with April posting a 35% increase in MLS® sales in April as reported by the Southern Georgian Bay Association of REALTORS (SGBAR) nudging up towards $100 million.  Sales in April were $99.8 million for the month which represents a 40% increase in dollar sales over April of last year.  Year-to-date MLS® sales of $252.2 million for the first four months of 2016 is a 27% increase year over year while MLS® unit sales are up 21%.

  Not all market areas in our region are reflecting the same level of demand however.  Single family home sales in Clearview are up 108% over the same time last year with 73 MLS® sales reported this year compared to 35 in the first four months of 2015.  Wasaga Beach is also seeing a strong demand for single family homes with year-to-date sales of 199 homes representing a 40% increase over last year.  Sales of single family homes in Collingwood are up a modest 12% this year with 96 homes sold versus 86 last year.  All other municipalities are showing decreases in MLS® single family home sales for the first four months of 2016.  The Blue Mountains -10%, Municipality of Meaford - 11% and Grey Highlands is down 35%.  

  Some of the above mentioned sales decreases are stemming at least in part from an absence of inventory.  Year-to-date MLS® listings in our market are down 9% with 1,378 new MLS® listings reported to date compared to 1,522 in the first four months of 2015.  In over 15 years of selling area real estate I have never seen market conditions like the ones we are experiencing right now.  Given the shortage of properties listed for sale, multiple offers, a trait very common in the Greater Toronto Area have become quite commonplace in our market with properties selling for their full list price or more. Since the spring of 2014 we have steadily moved from a Buyer's to a Seller's market with 1 out of every 1.8 properties listed for sale selling.  In contrast, two years ago at this time only one out of every 3.5 properties listed for sale sold. 

  Overall single family home sales are up 19% with 582 MLS® sales reported to the end of April.  Area condominium sales are also very bullish up 17% with 158 sales year-to-date compared to 135 in 2015,  As with single family homes, some area condominiums have been selling in a matter of days versus weeks again with strong prices being paid,  Sales are the strongest in the $350,000 to $499,999 and $500,000 to $799,999 price ranges up 30% and 39% respectively.  Residential sales year-to-date over $1 million total 17 properties, an increase of 41% from last year when 12 sales over $1 million were reported.

  After a couple of soft years, MLS® vacant land sales continue to show a resurgence driven at least in part by the absence of available existing home inventory listed for sale.  April year-to-date sales of 85 vacant lots is a 77% increase over the 48 MLS® vacant land sales reported in the first four months of 2015.

  It would appear the only real threat to the continuation of record sales across our region is a shortage of inventory especially in the low to mid price ranges, $200,000 to $500,000.  Now that better weather has arrived, we may see an update in the number of new MLS® listings coming to market but I suspect inventory will still be an issue in the month's ahead meaning we will no doubt remain in a strong seller's market.

Area Real Estate Sales Up 44% in February

The momentum we experienced in the local real estate market in 2015 has carried over into 2016 with year-to-date area real estate sales to the end of February posting a significant gain over the first two months of last year.

  Unit MLS® sales as reported by the Southern Georgian Bay Association of REALTORS® for the first two months of 2016 are up 26% with 288 sales made compared to 229 last year.  MLS® dollar volume is up even higher reflecting a 30% increase with $106 million in properties sold year-to-date.  Whiles sales in January were equal to the prior year.  MLS® unit and dollar sales in February were up a healthy 44% and 55% respectively.  It is worth noting that due to the severity of last winter, sales during the first two months of 2015 were depressed due to bad weather and driving conditions making property showings difficult and on some occasions the ability to get here from outside the area all but impossible. The weather this winter has been the polar opposite thus helping to better facilitate real estate showings thus stimulating sales activity.   

  As we have mentioned previously, with a healthy economy, low interest rates and positive consumer confidence, the only significant threat to area real estate sales is the apparent lack of inventory.  Despite a 15% increase in MLS® unit sales during 2015, the number of new MLS® listings that came to market in 2015 was down 15%.  This same trend has carried over into 2016 with new MLS® listing activity down 14% for the first two months of the year.  For sellers, there has never been a better time to list their homes for sale.  While less frequent than a few months ago, multiple offers are still prevalent especially in the high demand lower price ranges.  Overall, strong prices at all levels of the market are being paid for properties that are well priced and present themselves favourably.  

  Year-to-date MLS® sales are particular strong in the $200,000 to $500,000 price ranges.  MLS® unit sales between $200,000 and $350,000 are up 42% through the end of February with 128 properties sold, sales of 61 properties in the $350,000 to $500,000 ranges also reflects a 42% increase over the first two months of last year.   Sales of properties in the upper end price ranges continue to remain very robust especially in the $800,000 to $1 million range with year-to-date sales of 7 properties compared top just 3 in the same time period last year.  Sales over $1 million are slightly ahead of 2015 with 8 MLS® sales reported compared to 7 during the first two months of 2015.

  Year-to-date MLS® single family home sales are up 15% to the end of February, condominium sales are running slightly ahead of last year up 3% while vacant land sales have risen have 56%.  Vacant land sales during the past year have turned around significantly no doubt due in part to the lack of available housing inventory listed for sale.

  In terms of MLS® listed residential single family home sales, not all area municipalities are experiencing the same degree of demand.  Clearview Township is experiencing a very strong demand with year-to-date sales of 19 homes reflecting a 137% increase over last year.  Sales in Wasaga Beach are up 70% while Collingwood has posted a 14% increase.  Year-to-date, MLS® single family home sales in all other area municipalities are below where they were at this time last year.  Municipality of Meaford sales are down 64%, Grey Highlands sales are down 50% and sales in the Blue Mountains are down 29% from one year ago.

  With spring fast approaching, we will see the typical seasonal upturn in MLS® listing activity.  Many sellers firmly believe their property show more favourable in the better weather and rightly so.  Hopefully the coming months will see a closer relationship of new listings to sales as the lack of properties listed for sale is the only real threat we currently see that could derail the current insatiable demand for southern Georgian Bay area real estate.