But the demographics of buying a cottage have taken a sharp turn over the last year. No longer is it the Baby Boomers who are snapping up cottage properties like they are going out of style. Rather, it's a whole new generation.
Generation Xers -- those born after the Baby Boom between 1965 and 1980 -- are replacing the Baby Boomers when it comes to buying recreational properties. According to a recent RE/MAX report, the number of Gen-Xers buying a cottage has taken a marked shift over the last year.
The 2009 RE/MAX Recreational Property Report shows that 74 per cent of the markets surveyed reported a noticeable trend towards 30-somethings buying everything from waterfront cottages to resort condominiums. In fact, demand from Gen X for recreational properties has almost doubled over the last year, growing from 40 per cent to 74 per cent this year.
"Much of the activity in the marketplace today has to do with the mindset of this particular generation," says Elton Ash, Regional Executive Vice President of RE/MAX of Western Canada.
When it comes to buying a vacation property, Ash says the commitment to lifestyle is more important than the investment aspect for Generation X buyers.
"The purchase of a waterfront home or a condominium is more than a simple transaction to Gen X purchasers," he says. "Owning a recreational property underscores their dedication to family and balance."
The recession and financial downturn has certainly impacted the cottage market over the last year. Sixty-six per cent of recreational property markets reported a decline in the number of properties sold in the first four months of 2009. Only 22 per cent of vacation markets reported that sales were up or on par with last year.
But the recession isn't stopping those Gen Xers from picking up their own piece of vacation paradise. In fact, it's almost been a boon to those 30-somethings who have the disposable income and are taking advantage of the lull in the market to get a better deal on a cottage property. The sharply escalating prices of vacation properties over the last decade had virtually driven most Gen X buyers out of the cottage market. Not anymore.
"Gen X is ideally positioned to pick up any slack in recreational property markets caused by softer demand from baby boomers and retirees," says Michael Polzier, Executive Vice President, Regional Director of RE/MAX Ontario-Atlantic Canada. "They represent the next wave of recreational property owners in Canada and they know it."
While cottage properties may have become more attainable for Gen Xers now, that's not to say that recreational properties are selling far below the list price.
According to the RE/MAX report, the sales-to-list ratio remains relatively high in most recreational property markets across the country. So while significantly lower-priced offers may be on the rise, few of those "lowball" offers meet with success. Sellers are choosing to wait out the economic lull until they get the price they want.
Take my parents, for example. They listed their Lake of the Woods island cottage last year and had interest from only one party. He came in with an offer that was almost $100,000 less than they were asking. Instead of taking the offer, they held out for another buyer and ended up selling for close to what the cottage was listed for.
That said, there are good buys to be had as people anticipate the recreational market will boom again once we get through the recession.
"The prospect of greater stability down the road is creating cautious optimism in the marketplace," says Ash. "Purchasers are seeking to buy quality product before values start to once-again edge up."
The report also found that American buyers have largely fallen out of the cottage market across the country, with the exception of a few spots, including Lake Winnipeg. And some American cottage-owners in Canada are taking advantage of the stronger dollar to cash out of the market.
