Muskoka Marketplace – Annual Report 2013

The Snapshot
The Muskoka marketplace in 2013 was close to 2012 performance. Dollar volume was higher across Muskoka- Haliburton by almost 4%, District of Muskoka was up by 6% and, the Big 3 lakes by 8%. The number of sales over $3 million was up as the high end of the market performed strongly. Entry level and small lake property moved well. Properties between $1 and $2 million were not as strong as in the previous year.
The number of properties sold was down from last year by 2%.
The Muskoka-Haliburton cottage market is small. For the last several years, roughly 1100 waterfront properties trade in a given year (1115 in 2013).  In the District of Muskoka, about 620 properties trade each year while the Big 3 lakes have about 180.
Even though we had a long, cold spring last year with lower sales than usual for the first half of the year, both the summer and fall were strong selling (July was 50% ahead of the year previous). In fact, the average days on market (DOM) declined from 90 to 80 days for the year. Typically island and small lake properties take longer to sell than larger lake mainland ones by 15% or more.
Muskoka Second Home Survey
During 2013, the District of Muskoka undertook a comprehensive study of second or seasonal homes in Muskoka. It covered the District and included the Towns of Gravenhurst, Bracebridge, Huntsville and the Townships of Georgian Bay, Lake of Bays and, Muskoka Lakes. These are the prime areas for our annual report. The contents of the study are wide ranging: population, usage, type of structures, average incomes, types of purchases and permanency (will the seasonal home become a permanent home?)
According to the Municipal Property Assessment Corporation (MPAC), at the end of 2012, there were 22,354 Second Homes in Muskoka which account for almost 50% of all dwellings in Muskoka. The estimated seasonal population is 83,203 people who own a second or recreational home. This figure does not include renters or hotel and resort guests. Almost a third of all Muskoka’s second homes are found in the Township of Muskoka Lakes.
According to the survey, about 6% of respondents make their cottages available for rent.
The major centres of Muskoka are seeing growth in retirement population. Each has subdivisions developed specifically for those who are making Muskoka a seniors’ playground. Likewise, about a third of Muskoka’s cottagers are planning to – or are considering – having their cottages become their permanent home. Typical timeframe is 7 years from now.
48% of Muskoka’s second homes are winterized and up to 20% more are anticipated to be winterized.
A third of Muskoka’s seasonal homes have sleeping cabins or bunkies. 19% have boathouses with accommodation (most of them in the Township of Muskoka Lakes) and, a third of all seasonal homes have boathouses without accommodation. This last stat, boathouses, explains why Muskoka is recognized worldwide – just more than half of waterfront seasonal homes here, have the iconic waterfront structure.
People who come to Muskoka want boathouses for storage and as waterside entertainment locations. Boathouses add value and a statement that says “this is Muskoka”.
The Crystal Ball
Throughout the winter we receive inquiries about property for sale and from others who wish to sell in the coming season. Over the last 10 years, we have learned that our level of winter busy-ness is a good indicator of what to expect when the snow and ice departs. This year our winter has been especially busy. We have sold several properties with snow on the ground. The inquiries for spring are more numerous than since before 2008. We expect a strong year.
Factors that might support this are the rise of equity markets through 2013 and the value of our dollar. Historically sales to out of country buyers have accounted for 10+ percent of the year. The US recession and higher than normal loonie cut that to less than half in 2012. The recession is becoming a recovery and the dollar has lost 10% against the greenback since last summer. We have received higher than normal inquiries from the US and abroad this winter.
We believe more properties will sell in 2014 than in 2013. Prices will likely stay close to 2013 levels. If spring is warm, DOM could fall by as much as 10%.

Selling your cottage

What’s selling?
Typically, properties with the fewest compromises for the dollar or, the more attractive the asking price is in relation to perceived value. Other than price, the areas that matter when it comes to determining ‘value’ are usually some or all of the following – ranked in the mind of the buyer:
View, exposure, privacy, landform, nature of the waterfront, access, location and, condition of the buildings
We think of marketability of a property as being the relationship of those components with the asking price. The sharper the price, the less important some of those components become.  Asking price can reduce or increase the impact of compromises (steep shore, confined view, lack of privacy, weedy shoreline) on the decision to buy.
This past year, the average Days on Market (DOM) in Muskoka was lower than the year before by 10 days and, the average selling price relationship to last asking price was the same as last year at 93%.
Inventory levels were slightly lower than the previous year. The 10 fewer days of average DOM is actually significant.  People had less choice and, buyers were prepared to be more flexible as conditions indicated.  Pricing is important in terms of how long a property is on the market. If pricing is out of whack, the property will not sell quickly, whether it’s a $4 million property on one of the Big 3, or a $400K property on one of the smaller Muskoka lakes.
When is the best time to list a cottage for sale?
Generally, the cottage market has 4 phases each year.

  1. Spring rush – from ice out until end of May – when buyers are looking to buy a cottage for the current year. This accounts for almost 50% of the year’s business. Business is brisk and buyers are intent on finding a property for the season.
  2. Fall close – from mid September to end of October – when sellers realize they’ve had their last year at the lake and cottages that have been on the market all season (lower PV) reduce their asking price to raise Perceived Value. This accounts for almost 40% of the year’s business. At this time of year, many properties that have not yet sold have asking reductions. The perception is deals may be available. Our research shows properties sell for what they should have – unless there’s duress involved.
  3. Mid-summer – June through August – when cottages that have been prepared for sale come to market late and renters are in residence looking for a property. Typically there’s more ‘tire kicking’ than in Spring and Fall. This accounts for about 10-15% of the year’s business and much more of the ‘showing time’.
  4. Off-season – November to end of March – when properties that have been seen in the summer sometimes receive unexpected offers and, occasionally new listings come to market. This accounts for what is still an insignificant level of sales annually – although growing slightly.

The best time to list – and sell your cottage – is when the asking price is in line with market expectations. The greatest level of activity is during the Spring Rush. Listing at the end of March or in April serves the seller best.
How do I get the best price for my cottage in this market?
Understand what the market for your property is, is the simple answer. Ten years ago the Muskoka market was booming and demand was very high. We know people who built on spec then and realized margins of more than 50%. Not once, but several times.
Today spec-ing properties is more risky. Value of a property is not necessarily determined by what the seller has ‘in it’. Establishing a viable ask, is to reflect market condition – not the size of the investment. Understand what similar properties have sold for and price accordingly. If your property has a compromise, don’t overlook it – especially if it’s something you have become accustomed to. To a buyer a compromise can be like a sore thumb. Asking price can be the ‘right’ or ‘wrong’ medicine. No buyer will have had the years you have had to learn to love the property and discount its compromises.
Understand what the market is for your property. We have opened portals for some of our prospective sellers – so they can see what’s happening in their price range. Ask for a CMA (Current Market Analysis) and learn how your property compares to others that have sold. Be prepared to freshen the cottage or ‘stage’ it so that others can see themselves in your space.
Although it is sometimes said that buyers tend to undervalue property and sellers overvalue it, when it comes to pricing ‘at the market’, sales happen quickly. If priced too high, a property can sit for a long time and even suffer in value.
Who’s Buying?
Someone we know made the observation that on average the people who are selling cottages are older and those who are buying are younger. It makes sense and has implications for marketing property.
Younger people are more integrated with the internet. Today, it is a requirement that property for sale has a good profile on social media, websites and other marketing tools.
We have sold cottages to people we had been working with for several years. We’ve never met during that time. All communication was electronic.  When they ‘found’ their cottages online, in the portal we established for them, they informed us. We showed them and they bought.
The example may seem simplistic, but it’s true. The cottages were well represented in the portal pictorially. We were able to provide surveys and other material electronically. We provided information to determine market value. We showed the properties by satellite, the buyers familiarized themselves with the lake through online research and made their choice to buy before they saw the cottage in the flesh. The trip to ‘kick the dirt’ was a validation of our joint research. They never saw the property advertised in a newspaper or on an office display board. Their expectations were met from research provided to them in their living room.
More than 90% of industry sales today come from leads generated or supported through the internet.
In our own business, we have several thousand contacts using registered portals we have provided to monitor the Muskoka marketplace in specific price ranges. Some of them, we have never met. Others, we have spent days and weeks with ‘kicking the dirt’ learning what’s important to them.  People buy for their reasons and in their own way. We need to understand them to add value.

Buying a Cottage

When is the best time to buy?
The best time to buy is when you are ready. Although a major investment, there is always good value to be had. Cottaging is a learning experience. Be prepared to learn about yourself, how you cottage and, how your family cottages.
Cottage ownership is a lifestyle choice.  It is a discretionary purchase. It’s true that committed cottagers believe cottage ownership is a necessity rather than a choice. Regardless, cottage ownership has impact for families and friends. It’s another ‘home’ that entails – family gatherings, fun-filled vacations, regular commutes, weekend guests, boats and toys, furnishings, maintenance, taxes.
In tracking cottage purchases, we find almost 20% of first time cottagers sell their cottage within 5 years. They move ‘up’, go to another lake, learn ‘how’ they cottage and make the preferred change, some also leave ownership and remain as renters and others, leave cottaging altogether.
What has changed over the years?
Land Titles has increased specificity in land transfer. Where once, the placement of Rights of Way, drive ways, docks and, boathouses was estimated; today, exact location is a requirement.
Transactions are held up because deeded access to the properties being sold might not be in place, docks are built over the property line, driveways encroach. There’s a whole range of things. We even found a cottage for sale that was built on the wrong lot! Negotiated agreements, new surveys and, legal fees were part of the settlement.  With the change to Land Titles, historic use of land is not a current ‘right’ to use it. Use or ownership by adverse possession is a thing of the past.
As cottage country becomes more populated and people are using their cottages for year round purposes, specificity in land transfer and ownership definition is critical. The old adage of ‘good fences make good neighbours’ is becoming true in Muskoka.
In a selling situation a seller should ensure deeded or legal access to a property exists and if any encroachments exist, they be disclosed. Doing so will prevent surprises for the buyer which could well lead to a terminated sale.


This year, Rosskoka is celebrating its 11th year in Muskoka real estate. More than ever, people count. Relationships matter. Business is transacted through referral and introduction. Every year our business has grown through referrals from existing clients who were happy with our service. Thank you!
Our goal is to make the selling and buying process stress-free and to provide researched, expert insight about the marketplace. We know that buying and selling takes time – whether it’s finding the ‘right’ place or deciding to list a property that’s been in the family for generations. Cottages are special places.
If you have questions about the marketplace in general or activity on your lake, we can provide real estate data for every lake in Muskoka-Haliburton.  If you are interested in an Opinion of Value of your cottage in this market. Please contact us!

By | 2018-03-15T19:21:51+00:00 February 7th, 2014|Market Watch|0 Comments

Leave A Comment

HTML tags are not allowed.

310 Spambots Blocked by Simple Comments