Peggy Revell
FORT FRANCES—Cottage season is quickly wrapping for another season, but it’s been another slow year altogether for cottage sales in the Rainy Lake area.
“[Americans] are just not coming up, they’re staying at home,” said Alan Zucchiatti of Rainy Lake Realty here. “There’s very few of them buying.”
Zucchiatti pointed to various reasons why there’s been a slowdown: a weakened U.S. dollar, border issues, the price of gas, and a stagnant economy. He also noted the problem isn’t just a local one, with non-residents simply not crossing the border right across the country.
“There’s not as many looking and obviously that translates into not as many sales,” said Dave Kircher of Tichborne’s Real Estate. “The demand isn’t as strong as it has been.”
It’s a change in atmosphere caused by the price of oil, the sub-prime market housing crisis, and increased border security, he noted. All things that have affected the ability for Americans to afford a cottage north of the border.
It’s a change from a few years ago, when there was more demand for cottages in the area, said Zucchiatti.
“There was always more buyers than sellers, so basically it was a sellers’ market on Rainy Lake and the prices kept going up and up each and every year,” he remarked. “They were going up even 10 percent.
“And then all of a sudden, 2006, it started to go down, especially when their dollar began to slide, and it’s become kind of stagnant ever since.”
“We would sell most of the cottages that we listed in a given year, and it’s been kind of the opposite in that there hasn’t been that many of them for sale because they’ve just been harder to sell,” agreed Dan Cousineau of Cousineau Broker.
“The U.S. clientele has just dried up pretty much.
“The good news is that it’s probably giving a bit of an opportunity for the local people to buy cottages because the pressure’s off from the U.S. side,” added Cousineau, who has seen more local buyers. “So the prices are probably down a bit and the markets slower, and it’s a good time for local people to probably jump into the market because they can now.
“Even before it was hard to compete because what was happening was we would usually list cottages in U.S. funds. So if, say, you listed a cabin at $200,000 U.S., what that meant was for somebody from the States coming in, they’d pay $200,000 but what it meant for the local people is they’d pay $290,000 because they had to convert their money,” he explained.
“Basically, it made it so they couldn’t afford the market place for cottages. So now with the exchange rate, with what it has been at, even if we were selling them in U.S. funds, at least it was still affordable to some [local] people.”
Despite the slower market, cottage sellers still are asking for a lot of money, noted Cousineau—prices that people keep in mind when considering buying a property that they might only use four or five months of the year.
But the market for local buyers often is different than Americans, said Kircher, with U.S. residents generally buying cottages with water access whereas people from this area buy places with road access.
Kircher added it’s sometimes the property itself that makes its own market if it falls into a certain price range, style, or there’s something different about it, such as a cottage in areas like Seine Bay of Rainy Lake, which are really unpopulated.
“So if, say, a property would come up there, probably would be very much sought after and would have very much activity, just for the very nature of where it is,” he explained.
Luckily for local realtors, the cottage market isn’t that large on Rainy Lake, noted Zucchiatti, adding they focus more on residential sales.
“Over the year, there may be 10 sales on the lake, so it’s not like it’s 150 sales, so there’s not a big turnover on the lake each and every year.”
Zucchiatti said the future remains uncertain, depending on factors such as how the U.S. economy turns, and how the province’s land tax reform will affect tax rates in the unincorporated areas.
(Fort Frances Times)
