BY GARY MAY
Savvy buyers are already on the lookout for waterfront real estate bargains this year, with sales of higher-end properties and those in more expensive regions of Ontario lagging behind, a survey of agents across the province reveals.
While many agents say the cold, rainy spring is keeping many buyers’ wallets in their pockets, bargain-hunters have already been busy in some areas. In Essex County in Ontario’s far southwestern corner, for example, Dan Inverarity of Dearbrook Realty says buyer enthusiasm is already high for anything in the $200,000 to $450,000 range.
Inverarity tells MyNewWaterfrontHome.com that buyers were out in force by April 1 in Windsor/Essex, which trumpets itself as the 100-mile coastline, with waterfront along Lake Erie, the Detroit River and Lake St. Clair. Most buyers are coming from the Greater Toronto Area, he adds.
But then that’s not surprising, says Inverarity, given the region’s warmer springs and longer autumns, plus the bargain-basement waterfront prices in comparison to other waterfront communities in Southern Ontario.
“Last year, sales were soft,” he says. “But they started this year very well.” He says with waterfront properties selling in from 30 to 60 days, the market is better now than it’s been for quite a few years.
Another bargain region sits at the other end of the province in the Land ’O Lakes district — between Kingston and the Rideau Lakes. Chris Winney of ProAlliance Realty says after two amazing years, things are starting out slowly in 2011. But with inventory lower, she’s anticipating a spike in prices once the weather breaks.
Land of 5,000 lakes to choose from
Winney says 2009 and 2010 saw sales increases of 38 per cent and 12 per cent respectively, with bargain-hunters thrown into a buying frenzy by the region’s pristine lakes and relatively low prices.
“We have 5,000 lakes,” she says. “For $350,000, you can get a home on a pristine lake with three bedrooms and 1½ baths.” She says in the past, the area has been popular with people from east of Toronto and Kingston, and now they’re starting to see more activity from Ottawa as people discover prices that are far lower than the Rideau Lakes and Quebec’s Gatineau region.
Winney says buyers are going first for the west-facing properties for the sunsets. Another trend in Land ’O Lakes is with the best lots now gone, people are buying tear-down cottages and places that require extensive renovation.
With people hunting for lower-priced waterfront real estate, sales so far this year have been slower in the more pricey districts of Muskoka, Georgian Bay and the Kawarthas.
In Parry Sound on the east side of Georgian Bay, Michael Gerhardt of Michael Gerhardt Real Estate says the weather is putting a damper on business this year. “If it’s not warm in the city,” he says, “people tend not to come out to buy. So it’s a bit early to tell what kind of a year this is going to be.”
In his area too, he says, most of the properties that sold last year were in the lower price range. Noted for his wide array of island property listings, Gerhardt says he only sold two last year, compared to an average year of four or five.
So far this year, he says, most waterfront property sales have been in the “lower range” of $350,000 to $400,000, with some small, older cottages going for $260,000. And while there’s very little inventory so far at the lower end of the scale, Gerhardt says there’s plenty in the upper range, but few people are looking for those properties.
Every year is different, he adds, and it’s too early to say what this year will bring. He points to a “fixer” cottage offered last year for $119,000 that didn’t sell. This spring, he received 50 emails about it and it has been conditionally sold already.
Another change from 2010, when “you couldn’t give away vacant lots,” he says, is that this year he’s already getting plenty of inquiries about such lots.
It's all about the lifestyle
Last year, the Royal LePage Real Estate Services recreational property report found that nearly half of Canadians who were considering buying a recreational property said they were doing so to improve their lifestyle, despite concerns about increasing taxes, rising interest rates and tougher regulations requiring higher down payments on second homes. When buyers were asked why they planned to purchase recreational property, 47 per cent cited lifestyle as their No. 1 reason.
Gerhardt says it’s been his experience that when people look to buy a recreational property, they often have in mind turning it into their full-time home some time in the future.
Lynda Lynn of Lakes of Muskoka Realty in Bracebridge says in that vein, many buyers are asking for property with year-round access. “A lot of people envision the romantic notion of winter use of a cottage,” she tells MyNewWaterfrontHome.com. “Some imagine living there full-time. They often don’t think about frozen waterlines and plowing snow.”
Lynn deals in a lot of waterfront — mostly recreational — properties. She says they constitute half her business. And while she uses the fact that 58 per cent of her sold properties went for under $1 million in 2010 as evidence that there is still “affordable” waterfront in Muskoka, that figure is enough to make many buyers cringe. That fact is what’s driving up sales in lower-priced areas such as Windsor/Essex and Land ’O Lakes, say Inverarity and Winney.
Still, Lynn says some people can afford Muskoka prices, and she’s seeing younger professionals joining the hunt. Another trend is 50-plusers searching for properties where they can entertain and accommodate visiting children and grandchildren.
As for prices, she believes there was a slight increase in 2010 on the Big Three Lakes — Muskoka, Rosseau and Joseph — but says overall it’s a buyers’ market.
In Keswick/Georgina on Lake Simcoe, Steve Peroff of Peroff Keller Williams Realty says waterfront properties are particularly susceptible to the weather, and this year the weather’s been poor. He’s still waiting to see how much higher fuel prices will affect sales of full-time waterfront homes in an area that has in recent years attracted a lot of commuters who travel in to Newmarket and Toronto to work.
“We don’t see as many recreational cottages here as we used to,” Peroff says. “There’s been some transition to year-round residents.”
Meanwhile, new-builds are primarily selling to full-timers, he adds. With the high price of properties that sit directly on the water, says Peroff, he’s starting to see a new phenomenon appear. More people are buying “waterview” properties — places situated across the road from the water or else with access to the water.
And with this phenomenon, the price of waterview properties is rising. Peroff says a “barrier” was broken last year when he saw three waterview homes sell for more than $800,000. “They’re looking for lake, but they can’t afford the prices of a direct lakefront property.”
In fact, he says one property with only indirect access to water sold for $3 million last year. “Granted, it was a unique property, 3½ acres, an estate compound in a premier area. But it tells you what people are willing to pay to even be near the water.”
MyNewWaterfrontHome.com — May 2011