Sturgeon Lake Real Estate ~ Market Value Update
Whether you are an owner of a cottage who is considering selling, or a prospective buyer, it is important to be as informed as possible on local market conditions. In my previous career as a managing director at a major Canadian financial institution, I developed a deep appreciation for the importance of sound analytics, and have applied these concepts to glean insights on broader market trends as well as individual property valuation. In an effort to promote greater transparency and efficiency in our local markets, I am pleased to provide monthly in-season statistics and commentary on each of the major lakes in our service area. If you are interested in a more precise valuation of your property, please contact me at (705) 438-3000 or email me and I would be happy to provide a value estimate at no cost.
~ David Donais, Broker of Record/Owner
2018 Sturgeon Lake Market Value Summary
- The average sale price was $658,000 in 2018, up 18% from 2017 and 66% from 2014.
- There were 66 sales in 2018, in line with the 64 sales recorded in 2017.
- One metric I track closely to provide insight into pricing trends is the Sale Price-to-MPAC Assessed
Value Ratio. I calculate this ratio for each sale recorded, as well as an average ratio for all sales during
the year. In 2018, the average ratio for the 66 Sturgeon Lake sales was 1.38, unchanged from 2017.
The average ratio across the six key lakes in our region (Sturgeon/Cameron/Balsam/Four Mile/Shadow/
Head) was also unchanged from 2017 at 1.38. These ratios support my belief that waterfront prices
were stable year-over-year.
- Waterfront properties took much longer to sell in 2018 – the median number of days on the market
for properties sold on Sturgeon Lake was 52 days in 2018 versus 21 days in 2017. My explanation for
this increase is that buyers from the GTA who had experienced a double-digit percentage decline in
their home values were expecting similar declines in cottage prices in 2018. Cottage sellers, on the
other hand, were not willing to reduce prices in line with GTA trends as a result of their belief that
“bubble” conditions were not evident in our market. This gap in pricing expectations was resolved
largely in favour of sellers, as evidenced by stable year-over-year prices.
- Other key takeaways from the 2018 market include:
- The post-September 1st market was very strong on Sturgeon Lake – 25 waterfront properties sold
on the lake after September 1st, versus 13 in 2017.
- Buyers almost uniformly desire to use their cottages year-round – if you have a three-season
property, it would be well worth your while to investigate the feasibility of enhancing it to four-
- Looking forward, I am hoping that the strong momentum from the fall 2018 market will carry into 2019.
However, while the prospect of higher interest rates in 2019 appears to be receding, the late-2018
correction in financial markets has the potential to impact buyer demand for waterfront properties.
As always, real estate market conditions in the GTA will heavily influence our market.
Sturgeon Lake Market Value Update ~ October 15th, 2018
Fall market sales activity has been strong, with some evidence of sale price discounting
- There have been 12 post-Labour Day sales to October 15th, compared to 6 in the same period last year.
- The 12 post-Labour Day sales yielded an average Sale Price-to-MPAC Assessed Value ratio of 1.34, down from the 1.44 ratio for 2018 sales up to August 31. This may be indicative of sellers’ receptiveness to accepting lower prices prior to the end of the season. The average number of days on the market for these post-Labour day sales was also much higher at 93 days versus 54 days for 2018 sales up to August 31 – again indicative of seller receptiveness to lower prices for properties that have sat on the market for some time.
- The average sale price for the 52 sales to-date in 2018 is $649,000, up significantly from the average sale price of $559,000 for all sales in 2017. The average Sale Price-to-MPAC Assessed Value ratio for the 52 sales so far this year is 1.42, up slightly from the 1.38 ratio realized for all sales on Sturgeon Lake last year. There is a wide dispersion of ratios among the 52 sales, so buyers are cautioned against using the average ratio to assess whether an individual listing is over- or under-priced. Properties that have had significant upgrades tend to have higher sale price-to-assessed value ratios.
Sturgeon Lake Market Value Update ~ August 31, 2018
Sturgeon Lake Market Value Update ~ July 31, 2018
Sturgeon Lake Market Value Update ~ June 30, 2018
Sturgeon Lake Market Value Update ~ May 31, 2018
Much stronger sales in May, and prices are holding up.
- May was a much stronger month for Sturgeon Lake sales, due perhaps to the quick transition to summer weather. There were 24 new listings and 14 sales in May 2018, compared to 20 new listings and 10 sales in the same period last year. Year-to-date numbers still indicate a weaker market than last year, with 59 new listings so far this year and only 20 sales.
- The average sale price for the 20 sales this year is $573,000, down 6.7% from the January 1 to May 31 period last year, but up 2.5% when compared to the average sale price of $559,000 for all of 2017.
- The average Sale Price-to-MPAC Assessed Value ratio for the 20 sales so far this year is 1.41, up slightly from the 1.39 ratio realized on the 30 sales in the same period last year, and the 1.38 ratio realized for all sales on Sturgeon Lake last year.
- These last two points are very instructive in terms of the direction of the market. Feedback from our buyer agents indicate that there was a sizable gap between seller and buyer expectations earlier in the year, with buyers expecting to pay lower prices in line with GTA trends, while sellers were reluctant to accept lower prices in the belief that there had been no bubble in this region that needed to be burst. Based on the most recent evidence, this gap seems to be resolving in favour of sellers.
Sturgeon Lake Market Value Update ~ May 18, 2018
- Since April 30, activity has picked up on Sturgeon Lake, with 10 new listings and 7 new sales on the lake (as well as an additional 7 conditional sales). On a year-to-date basis (Jan. 1/18 – May 18/18), total sales volume on the lake is $7.3 million, down significantly from $13.2 million for the same period last year.
Sturgeon Lake Market Value Update ~ April 30, 2018
- Evidence indicates that Sturgeon Lake is now a buyer’s market – in sharp contrast to the strong seller’s market that prevailed last spring. The charts below illustrate this swing. They compare the number of new listings in a given period to the number of sales in the same period. A high proportion of sales in relation to new listings indicates a seller’s market, while a low proportion indicates a buyer’s market. In the January 1 – April 30, 2018 period, there have been 35 new listings and only six sales. Last year during the same period there were 27 new listings and 20 sales.
- The slower start is most likely the result of a combination of poor spring weather and more balanced market conditions. It is not surprising that market conditions are weaker in comparison to last spring when there was a significant overhang of buyers with substantial equity positions in their GTA homes.
- Another factor likely resulting in lower sales activity is that asking prices are relatively high. As noted in the 2017 summary below, the average sale price to assessed value ratio for all waterfront sales on Sturgeon Lake in 2017 was 1.38. In other words, the sale price for a given property was, on average, 1.38 times that property’s 2016 MPAC assessed value. For the 24 active listings on Sturgeon Lake as at April 30, 2018, the average asking price to assessed value ratio is 1.55. In other words, the asking price for a current waterfront listing on Sturgeon Lake is, on average, 1.55 times that property’s 2016 MPAC assessed value. This difference in today’s asking prices versus last year’s sales prices may well be leading potential buyers to balk at paying these higher asking prices, especially given the year-over-year declines in prices they are familiar with in the GTA.
- Five of the six sales so far in 2018 have been in the $500,000 - $600,000 range, with no sales above $600,000. In contrast, 10 of the 20 sales in the same period last year were for greater than $600,000.
2017 Sturgeon Lake Summary
- The average sale price was $559,000 in 2017, up 6% from 2016, and 41% from 2014.
- Sixty-four properties were sold in 2017, down from 81 in 2016.
- Market dynamics on Sturgeon Lake (and all of the western Kawarthas) were influenced by events in the GTA housing market. The spring market was especially frothy, with large numbers of buyers competing for relatively few listings. Bidding wars were common.
- Cottage buyer interest receded somewhat after the imposition of the foreign buyer tax in the GTA. Mid-priced cottages (up to $700,000) continued to sell quickly, however, while sales of higher priced cottages slowed considerably.
- The trend to higher market values on Sturgeon Lake was supported by another metric we track closely – the Sale Price to Assessed Value Ratio. In 2017, the average ratio for Sturgeon Lake was 1.38, a 18% increase from the 1.17 ratio realized in 2016.
- The 2017 trend on Sturgeon Lake towards higher average sale prices, higher Sale Price to Assessed Value ratios, and a relatively low volume of listings, is consistent with trends on other lakes we track closely (Balsam/Cameron/Four Mile/Shadow/Head). However, the buyer population differs somewhat on Sturgeon Lake in comparison to these other lakes in that Sturgeon Lake attracts a higher proportion of buyers looking to live year-round on the lake. This is primarily due to Sturgeon Lake’s proximity to services and attractions located in Lindsay, Bobcaygeon and Fenelon Falls.
Read Other Kawartha Lakes Market Value Updates