Why would anyone buy recreational property this time of year?

We have hit the first official day of winter. Some forecasters say that it is going to be a warm winter, while others say that it is going to be a long cold winter. I guess one of them will be right, or at least pretty close. So why would ANYONE consider purchasing a recreational property during the winter? Or purchase while the market is so soft, period. Only crazy people with more money than brains, right? Well, let's look at what history shows us. More millionaires were created during the great depression than in any other period in history. I am not saying that you have to be millionaire to buy now. What I am saying is, those people bought while everyone else was holding back, or had no money at all. The people that came out on top bucked the trends and went ahead with investing, in such things as real estate, while there prices were low and there was very little competition, if any. Then, when the markets eventually turned around, these people who had made investments at such a low cost, saw their stock rise! Buy low, sell high - is that now what we have all heard about? Something to ponder. I have experienced this during a couple of cycles in the local market. Once, I timed it right and did very well. The second time, well, I got cocky and missed out. So why would anyone buy a recreational property this time of year? Wide range of selection. Very little competition. Low prices. The end.

How much can you sell my lot for?

I had a phone call last week from a former client whose lot that I had listed at Lake McGregor Country Estates. He asked how much I thought I could get for his lot. I told him that the last time we had it listed, we were around $45,000. We received minimal interest. I told him that 90% of the lots that sold last year were sold at bargain prices. This client had purchased the property for $46,000 and did not want to take a loss. I explained that the recreational property market has not fully recuperated yet, but I will certainly keep his property in mind if I get anyone out during the winter. Historically speaking, the winter is a slow time for the recreational property market. I suggested listing the property in the spring so that the listing does not look stagnant, being listed over the winter months. A few days later, I was checking out the new listings on our real estate board, and there it was. He listed with another outfit, and it is listed for more than I had suggested. I sigh...and then move on. This is not the first time this has happened, and it will not be the last. When people ask me what I think I can get for their property, I tell them. I tell them the marketplace. I tell them what the marketplace is dictating at that time. I do not sugar coat the estimate, and tell them something that I cannot deliver on. If you do not like what I have to say, that is fine. There are plenty of other people who will tell folks what they want to hear, even thought it is not necessarily the reality of the market...or life in general. Marketing recreational property is not the same as marketing a house in Calgary, Lethbridge, or even Vulcan. A person's primary residence is their primary focus. Recreational property falls further down the priority list. It usually does not fall on the radar until people have extra disposable income. When that is available, they tend to get more serious, such as back in '07 and '08. Before that time, anywhere from 3 to 10 sales at the resort was the norm. It the "hot" years, where people had money to spend on anything and everything, they did just that. We had close to 100 sales out there. Then the world market took a plunge. Residential markets took a hit. People's disposable income took a hit. The recreational property market took a hit. And not just at Lake McGregor Country Estates, and Little Bow Resort, but everywhere. Then the world market gained some ground. The residential market started to pick up. It has taken off in Calgary. People are dusting themselves off from the economic fall and they are getting back on their feet. There are some looking for recreational property, but they are being much more cautious, compared to when our pockets were full of extra money and the banks would lend on just about anything. And now the oilfield is taking a hit due to the price for a barrel of oil. How is that going to effect us? I am guessing that people will be cautious with their money...maybe more so than before. We have seen lots of ups and downs in the recreational property market. There were years where we were going in the hole marketing for the resort. Then we had a couple of good years where we got back into the black...but then we had been taking a hit ever since. It is going on 15 years that we have been at the resort. Some years we have been classified as "crazy" for trying to market a resort out in the middle of nowhere. We have been felt sorry for as we have spent money and time marketing the resort when nothing much was going on. We have been "making too much easy money" when the market finally gained strength. And then we are the "bad guys" again because "nothing is selling" out there. Well, there are properties that are actually selling. When owners are not as concerned about "giving it away", they sell their properties, and they move on. It does not matter how much you purchased the property for. Buyers do not really care if you are taking a loss. They are more interested in today's market, not yesterday's. And they are speculating about what tomorrow's market is going to bring. My point is, we (Magnuson Realty Ltd.) have been at the resort since day one. We have seen the roller coaster ride that the market has taken. Up. Down. Down some more. Sideways. And so on. Ask me what I think you will get for your property at the lake, and I will tell you. I tell you from my experience there. Then go ahead and ask someone from the city market, where properties are always going up and where listings are stagnant if they have been on the market for over three weeks. I am sure they will give you a much better number for selling than I will, and a much better story. I do not blame people for listening to the agent who is giving them the story that they want to hear. I would most likely do the same if I were in their shoes. And then, when the property does not sell and the promises are not kept, we will be there to pick up the pieces and make things happen, as the actual market dictates.

Transitioning to the winter market

Activity at the lake has slowed down, as per usual this time of year. We do not get many "lookers" during the colder winter months. Saying that, though, we do get some ice fisherman in the area and they tend to want to check things out. There are a few online "tire kickers" who want to know what lots/cottages are going for. As far as people coming out, we have had a few people who "will get back to us", but very few do. As far as the resort itself, the snow has been cleared, the clubhouse is open, and those owners that are out at Lake McGregor Country Estates, are enjoying the peace and quiet. While some residents are off to places warmer for the winter, others are getting their homes ready to host a family Christmas. Here's hoping that we have great weather for everyone for their travels and times to enjoy at the lake!

A couple more sales...

There have been a couple more sales at the resort in the past few weeks - one cottage lot that has a great view of the lake, and one RV lot. The RV lot had been on the market for a couple of years, so I am sure that the sellers were happy to see it finally move. And the buyers are happy that they were patient and they got a good deal. We have also lost a couple of listings at Lake McGregor Country Estates. One cottage lot and two RV lots with units. I do not blame the sellers for taking them off the market. I know at least one is now trying to sell on their own, and I am sure the other will be getting another real estate agent. Once again, I do not blame them. The market has been soft and it is frustrating not having your property sell, especially after being on the market for so long, like over a year or more. Sometimes the real estate is to blame, but sometimes the asking price is just too high, or the market is just not there. I am familiar with that. For the first several years of us marketing Lake McGregor Country Estates, we had very few sales, and high input costs for marketing. Then the market took off and sales were hot. And over the past few years, sales have certainly been fewer than the "hot" years, but still better than the first few years which were very quiet. As my university economics professor told us, the market goes in cycles. And when you hit the market at the wrong time, the cycle sucks!

Preparing for the colder months

As the days start to get shorter, it is time to start thinking about the fall and winter seasons. Here are a few tips for life at the lake: start thinking about winterizing your RV or cottage. Get in contact with management about getting your water shut off if you are not going to be around for the winter. If you are not comfortable winterizing your RV, talk to a neighbour. There are people who have been out there for years who are more than willing to pass along a few helpful hints. If you are going to be away, let your neighbours know so that they can keep an eye on your place for you. Let management know too, so that they can also keep an eye on your place, and leave them contact information in case they need to get in touch with you. Hopefully all will be good but we should be prepared. Best to be safe than sorry.

Year of the RV lot and unit sales

This year we have seen only a few cottage lots sold, but we have seen an increase in RV lot, and RV lot with units sold. More specifically, we have seen an increase in activity in RV lots with park model units on them sell - most in the $130,000 to $134,000 range. Once again, this proves that there are buyers out there, but they are looking for the deals because they know someone is willing to sell cheap. As stated before, there were two interior cottage lot sales, $31,000 each, that sold closer to the beginning of 2014. Last weekend, we did have a larger, lake view cottage lot sell. Plus, we have negotiations carrying on for another lake view cottage lot. Unfortunately, the resort has had some of the general public "sneek into" the resort and there has been some damage done. This has been the case for years now. Within the passed couple of weeks, however, management has come up with something to help curb that trend. There are now spikes at the exit gate. People can no longer enter the resort through the exit gates, which, in the past, have been damaged and did not work properly. Now, people who want to enter the resort will have to obtain the security code from an owner, or from management. I am sure that this will deter at least some of those people who were enjoying the amenities of the resort, without the investment. And I am sure this helps put the minds of the current owners more at ease as well.

Hey, is that a few more sales I see?

Remember a while ago when I said that the weather was holding things up, and that once it started to warm up things would start to happen? Well, within the past 10 days I have had one RV lot sell, and have sold another RV lot with a 5th wheel trailer on it. And, we have a conditional sale on a park model on its own lot. Plus, I have a few more people coming out to check out the resort. Now before we strike up the band and celebrate the changing of the market, let's take it all with a grain of salt. It is nice to finally see some action happening, and let's hope that the momentum continues. I am being cautiously optimistic, I guess you could say. I do think that a few more SOLD signs out there will create a bit more urgency for potential buyers. I mean we are down to only two vacant RV lots for sale now. It is nice to see some of these properties that have been on the market for over 2 years finally seeing some action, and buyers putting pen to paper. Let's hope that we can get a few more new families out here, and help them make some new family traditions at the lake!