McClelland Minute - July 25, 2010

Life at the Lake

It is almost everybody’s concept of relaxation – a lot at the lake to retreat from the stresses of daily living.  It may have a cabin, tent, or a recreation vehicle on it; it doesn’t matter, life just seems to go at a slower pace. Even the neighbours are usually friendlier (at least until they start partying without you!)

Right after the civic holiday in August, our phones will start ringing with owners wanting to sell.  Even though most buyers prefer to buy before the summer starts this can be a great time of year to invest in a second property.  Purchase early enough and you will enjoy the best that fall can offer in the Midwest, and if it is a year around structure, it can provide satisfaction throughout all four seasons.

The housing troubles in the United States has created significant opportunities for investment in the sunbelt states – Florida, Arizona, Nevada, and California.  There is no doubt in the last two years that a lot of locals have looked south for their second home.  It’s hard not to, when you can get the kind of deals that are still available in that market place.

Undoubtedly, this has had an impact on the local recreation market.  Baby boomers, instead of looking for summer property at the lakes, have turned their attention to winter residences in more moderate climates.  In addition, we have suffered the impact of a recession, when discretionary dollars have dried up.  A lot of recreation buyers used equity in their primary residences to fund purchases at the lake.  As values dropped on houses in the city, the demand for lake property dipped significantly.

Now we are seeing an encouraging reversal of the trends.  First of all, only the very rich can fly to Phoenix for the weekend; driving up to the lake is still accessible.  Secondly, it is not all roses down south.  Taxes, maintenance, and property management costs are more than some expected.  Vacant condominiums and subdivisions have forced ownership groups and municipal governments to increase their levy in order to maintain basic services.

There is only so much decent recreation property available.  Now just may be the best time to be looking.  Some owners bought lots with the intention of taking advantage of an increasing price point.  Unfortunately, the recession has beaten them up pretty good and they are willing to negotiate. 

Counter to this statement is the attention paid to lake or river front parcels.  These still command a premium.  I guess it is because there is only so many to go around.  We have even had buyers pay over $300,000 for a location, with the intention of removing the existing structure in favor of their dream year around home on the site.  I guess that proves the age old maxim that the first three rules of real estate is location, location, location.

Vern McClelland is associate broker with RE/MAX of Lloydminster.  If you have questions or comments on this article or other real estate matters, he can be reached at 780.808.2700 or through the McClelland Group website www.mcclelland.ca

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