A survey that was completed by Leger Marketing for Royal LePage showed that 59 per cent of people who were planning on buying a cottage this year have backed off and decided not to after all. This one statistic has led to some confusion, largely on the part of Royal LePage. Along with the report, they stated many reasons for the slowdown, but then turned around and said that it’s not a bad situation “at all.” So, are cottage sales down this year? Or were they just early?
Phil Soper, president and CEO of Royal LePage Real Estate Services, has two different schools of thought on whether or not people are pulling out of the cottage market. His first line of thinking states that prices in the cottage industry have sunk, and the activity that there in years past has slipped away some over the past years.
“We just haven’t seen the activity levels in the marketplace and prices have remained relatively flat while prices in urban regions have risen quite steeply,” says Mr. Soper. “Generally, people seem to continue to be concerned about global economic issues impacting Canada.”
Wary buyers have also prompted a slew of wary sellers, says Mr. Soper. With fewer buyers, the cottage industry is certainly not a seller’s market at the moment – and that’s also hurting the vacation home industry.
“Many of them are hanging on to those properties because they feel they are not able to get the value necessary,” says Mr. Soper. “As a result, we don’t have the amount of inventory that we should on the market either. People aren’t selling because they don’t think it’s a good market and they don’t have to sell.”
But could there be another reason for the lack of inventory that’s on the market? Perhaps maybe all those people that took advantage of our very mild winter and bought cottages at lower prices?
And maybe the market isn’t that bad, either. It was Mr. Soper who also provided the statistics on the latest cottage sales figures that you can see in the chart below; and they seem to show relatively little difference between this year and four years ago in 2008.
Mr. Soper also seems to contradict himself a bit saying, “Both the spring market of 2011 and the current market are moving along crisply. It’s not a great market, but unit sales are up, prices are flat and properties are moving. It’s not necessarily a negative situation at all.”
So are cottage sales down? Maybe. But it’s not by much, and even if sales are down, it might just be because people were so eager to get into them during the winter that they just wanted to enjoy them in the spring and summer months. That could also be another reason why inventory is low on the market right now.
So what do you think? Are cottage sales down this year? Or is the flurry of winter activity the reason behind the slow sales?