Starting prices for prime waterfront properties in Sylvan Lake continue to fall and that has led to an upswing in sales.
The typical starting price for a three-bedroom winterized recreational home on a 15-metre waterfront lot dropped to $750,000 from $800,000 a year ago, says the Recreational Property Report 2012 prepared by RE/MAX. In 2010, the price was $1.2 million, and $1.125 million in 2009, $1.25 million in 2008 and $1 million in 2007.
The price adjustments are “making today’s climate one of the most affordable in recent years,” says the report.
“It’s definitely picked up from previous years,” said Alf Moore, a RE/MAX realtor in Sylvan Lake. There have been 22 recreational property sales around the lake so far this year, compared with about 35 for all of last year.
The report says the best sellers are turnkey properties on prime waterfront. One lakefront recently sold for $1.85 million and prices ranged to $677,000 at the low end.
Since bottoming out in 2010, the market is showing signs of improvement “yet the pace is exceptionally reserved as buyers take time to make their decisions,” says the report.
Properties with older, tear-down homes on them are available in the $400,000 range “but those have been a struggle to move in today’s market.”
Some are getting into the housing market by buying smaller, nine-metre lots in the $225,000 range and building custom homes. Once completed, house and lot are making as much as $525,000.
The report says condominiums also continue to be good value with starting prices on the waterfront about $350,000.
Typical buyers are younger with well-paying jobs in the oil and gas sector.
“The vast majority are travelling from Calgary, and to a lesser extent, Edmonton,” the report says.
Moore said prices began to fall when the economy slowed down.
“I think most of our buyers are in the oil industry and a lot of people weren’t buying, so it had to bring prices down before they would start buying again.”
He knows of several waterfront lots with a tear-down cabin on it that would have gone for $1 million in 2007, but now can be had for about $800,000.
“It was just supply and demand and there was no demand so the prices had to come down.”
He recently sold a cottage in the town that was bought for $363,000 in 2007 and was improved with $14,000 worth of fencing. It sold for about $313,000.
Those kinds of situations were typical among recreational properties. “But (prices) will come back.
“Hopefully, it won’t go as crazy as it did in 2006 and 2007. It was going up too fast, and something had to break.”
The report says inventory is on par with last year’s levels, with about 30 waterfront properties available, as well as 26 backwater cabins and five building lots.
Canmore is the only other Alberta community in the recreational property survey.
“Demand for recreational properties in Canmore is on the upswing, with sales in recent months gaining serious traction.”
Two-bedroom condominium prices start at $195,000, down from $229,000 a year ago.
The report highlights trends in 33 markets nationally. Sales were up over last year in 70 per cent of communities, while six per cent were on par with the previous year.
Starting prices were down in just under half of the communities. In 33 per cent of communities prices were unchanged and in 19 per cent prices went up.
pcowley@www.reddeeradvocate.com