At the beginning of 2014 this Report predicted that in 2014 we would see modest increases in both sales volume and average sale prices. This forecast was based on the fact that Canada’s economic recovery, and in particular Ontario’s, was sporadic and would be modest in 2014. There was, at that time, a fear that mortgage interest rates would rise.
 
Based on this economic landscape I forecasted that sales volumes would increase by 5-6 percent and that average sale prices, a difficult number to nail down for recreational properties, would increase by 3 to 4 percent. Year-end sales statistics for the Muskoka area indicate that it is practically impossible to make global forecast for the region. There are dramatic variations from sub-recreational area to sub-recreational area.
 
Overall 2014’s predictions proved to be wrong in that year-end results exceeded forecasts. As will be demonstrated below, this is due primarily to the strength of the region’s most expensive area, the Muskoka Big Lakes. In 2014 over all recreational property sales for the Muskoka-Haliburton-Orillia region increased by more than 10 percent compared to 2013. In 2013 there were 794 reported sales. That number increased to 892 recreational property sales in 2014.
 
The increase was primarily due to the sales activity on Muskoka’s Big Lakes, Rousseau, Joe, and Lake Muskoka. Over the last three years that region has shown strong growth, and given that it is the most expensive area to buy a recreational property, surprising growth. For example in 2012 there were 205 reported sales on the Muskoka Lakes. That number increased to 223 in 2013. In 2014, 266 recreational properties were reported sold, a startling increase of almost 20 percent, dramatically exceeding the results achieved in other areas where Chestnut Park represents buyers and sellers of recreational real estate.
 
Both in Lake of Bays and the Haliburton Highlands sales activity declined in 2014. On Lake of Bays there were 84 MLS reported sales in 2014, down from the 89 reported in 2013. In the Haliburton Highlands there were 246 sales, also a decline from the 250 achieved in 2013. These results are somewhat surprising given the fact that price points in these areas are substantially lower than on the Muskoka Lakes.
 
The explanation no doubt rests in the fact that with an economy that sputtered in 2014, the economic sector of our society with less discretionary money simply was not buying. It should be noted that Huntsville showed a increase of 15 percent in sales, but modest in actual numbers: 26 sales in 2013, up to 30 sales in 2014.
 
In the Muskoka and area market place, unlike a large metropolitan urban market place, it is very difficult to determine increases or decreases in average sale prices year-over-year. There are so many variables involved in recreational property prices – location, exposure, water depth and access to name of few, that it is almost impossible to create a comparable universe of properties. Some comparables are, however, possible.
 
In the most expensive and active recreational market place there was some startling data when 2013 is compared to 2014. In 2013, 30 properties were reported sold having a sale price of $ 2 Million or more on the three big Muskoka Lakes. In 2014 that number increased by 66 percent to 50 properties reported sold. In 2013 there were no properties reported sold having a sale price of $ 6 Million or more. In 2014, 3 properties were reported sold in this price category, one of them having a sale price of more than   $ 7 Million. These numbers do not necessarily indicate that average sale prices increased, but they do indicate that buyers had an appetite for more expensive recreational properties, something that has not occurred since before the last recession in 2008.
 
Another change that occurred in 2014 is the narrowing of the difference between the sale price of these high-end properties and their list price. On average the sale price to list ratio was approximately 94 to 95 percent. In 2013 and earlier the sale price to list ratio was less than 90 percent. If nothing else this demonstrates that in 2014 buyers’ expectations were more closely aligned with what sellers and their sales representatives believed their properties were worth. No doubt this was a major contributing factor to the strong sales numbers for recreational properties on the Muskoka Lakes.
 
With respect to the rest of the recreational market place, data obtained from the Muskoka-Haliburton-Orillia Association of Realtors indicates that the average sale price for recreational properties increased by 12 percent in the last quarter of 2014. Unfortunately this increase in average sale prices was not in tandem with substantial increases in sale numbers.
 
Chestnut Park and its sales representatives were responsible for almost $ 250 Million in property value sales. This exceeds the firm’s next best year which was 2007 by more than 11 percent. In 2007 Chestnut Park’s agents engaged in more than $ 220 Million in recreational property sales. Chestnut Park’s Port Carling office sales exceeded its next closest competitor brokerage office by almost 120 percent.
 
Looking ahead there is no reason that 2015 can not be a repeat of 2014. There are, however, some economic concerns that might negatively impact the volume of sales and the price of recreational properties. The plunging price of oil is having an impact on equity markets. Historically uncertainty in the equity markets has had on impact on recreational market sales, particularly at the high end.
 
Unfortunately Canada is a commodity driven economy and oil is one of our major commodities. As this report was being prepared prices and sales of homes in Alberta’s major centers were in sharp decline. If nothing else sellers should be cautious about pricing and constrained about value exceptions based on 2014. As has been noted on numerous occasions in these Reports, recreational properties are discretionary purchases. If there is economic uncertainty buyers will be less likely to pay prices that they believe are not reflective of fair market value.
 
 
(Image provided by http://www.puremuskoka.com/)

  

At the beginning of 2014 this Report predicted that in 2014 we would see modest increases in both sales volume and average sale prices. This forecast was based on the fact that Canada’s economic recovery, and in particular Ontario’s, was sporadic and would be modest in 2014. There was, at that time, a fear that mortgage interest rates would rise.
 
Based on this economic landscape I forecasted that sales volumes would increase by 5-6 percent and that average sale prices, a difficult number to nail down for recreational properties, would increase by 3 to 4 percent. Year-end sales statistics for the Muskoka area indicate that it is practically impossible to make global forecast for the region. There are dramatic variations from sub-recreational area to sub-recreational area.
 
Overall 2014’s predictions proved to be wrong in that year-end results exceeded forecasts. As will be demonstrated below, this is due primarily to the strength of the region’s most expensive area, the Muskoka Big Lakes. In 2014 over all recreational property sales for the Muskoka-Haliburton-Orillia region increased by more than 10 percent compared to 2013. In 2013 there were 794 reported sales. That number increased to 892 recreational property sales in 2014.
 
The increase was primarily due to the sales activity on Muskoka’s Big Lakes, Rousseau, Joe, and Lake Muskoka. Over the last three years that region has shown strong growth, and given that it is the most expensive area to buy a recreational property, surprising growth. For example in 2012 there were 205 reported sales on the Muskoka Lakes. That number increased to 223 in 2013. In 2014, 266 recreational properties were reported sold, a startling increase of almost 20 percent, dramatically exceeding the results achieved in other areas where Chestnut Park represents buyers and sellers of recreational real estate.
 
Both in Lake of Bays and the Haliburton Highlands sales activity declined in 2014. On Lake of Bays there were 84 MLS reported sales in 2014, down from the 89 reported in 2013. In the Haliburton Highlands there were 246 sales, also a decline from the 250 achieved in 2013. These results are somewhat surprising given the fact that price points in these areas are substantially lower than on the Muskoka Lakes.
 
The explanation no doubt rests in the fact that with an economy that sputtered in 2014, the economic sector of our society with less discretionary money simply was not buying. It should be noted that Huntsville showed a increase of 15 percent in sales, but modest in actual numbers: 26 sales in 2013, up to 30 sales in 2014.
 
In the Muskoka and area market place, unlike a large metropolitan urban market place, it is very difficult to determine increases or decreases in average sale prices year-over-year. There are so many variables involved in recreational property prices – location, exposure, water depth and access to name of few, that it is almost impossible to create a comparable universe of properties. Some comparables are, however, possible.
 
In the most expensive and active recreational market place there was some startling data when 2013 is compared to 2014. In 2013, 30 properties were reported sold having a sale price of $ 2 Million or more on the three big Muskoka Lakes. In 2014 that number increased by 66 percent to 50 properties reported sold. In 2013 there were no properties reported sold having a sale price of $ 6 Million or more. In 2014, 3 properties were reported sold in this price category, one of them having a sale price of more than   $ 7 Million. These numbers do not necessarily indicate that average sale prices increased, but they do indicate that buyers had an appetite for more expensive recreational properties, something that has not occurred since before the last recession in 2008.
 
Another change that occurred in 2014 is the narrowing of the difference between the sale price of these high-end properties and their list price. On average the sale price to list ratio was approximately 94 to 95 percent. In 2013 and earlier the sale price to list ratio was less than 90 percent. If nothing else this demonstrates that in 2014 buyers’ expectations were more closely aligned with what sellers and their sales representatives believed their properties were worth. No doubt this was a major contributing factor to the strong sales numbers for recreational properties on the Muskoka Lakes.
 
With respect to the rest of the recreational market place, data obtained from the Muskoka-Haliburton-Orillia Association of Realtors indicates that the average sale price for recreational properties increased by 12 percent in the last quarter of 2014. Unfortunately this increase in average sale prices was not in tandem with substantial increases in sale numbers.
 
Chestnut Park and its sales representatives were responsible for almost $ 250 Million in property value sales. This exceeds the firm’s next best year which was 2007 by more than 11 percent. In 2007 Chestnut Park’s agents engaged in more than $ 220 Million in recreational property sales. Chestnut Park’s Port Carling office sales exceeded its next closest competitor brokerage office by almost 120 percent.
 
Looking ahead there is no reason that 2015 can not be a repeat of 2014. There are, however, some economic concerns that might negatively impact the volume of sales and the price of recreational properties. The plunging price of oil is having an impact on equity markets. Historically uncertainty in the equity markets has had on impact on recreational market sales, particularly at the high end.
 
Unfortunately Canada is a commodity driven economy and oil is one of our major commodities. As this report was being prepared prices and sales of homes in Alberta’s major centers were in sharp decline. If nothing else sellers should be cautious about pricing and constrained about value exceptions based on 2014. As has been noted on numerous occasions in these Reports, recreational properties are discretionary purchases. If there is economic uncertainty buyers will be less likely to pay prices that they believe are not reflective of fair market value.
 
 
(Image provided by http://www.puremuskoka.com/)

  

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