Thanks for the quick responses. As far as location, insulation, etc., the heater is in the unfinished side of the basement, about 3 feet from an outside wall, and about 10 feet from the floors of the 1.5 bathrooms. While the basement is a little cooler than the upstairs, I don't think the difference exceeds 5-6 degrees. I will look again, but from what I recall, the previous owner had done a pretty good job of insulating all of the hot water pipes in the house. The heater is not wrapped, but I do not believe the basement temp ever drops below 60-65 degrees F. I have not completely drained the tank, although twice a year, I do open the drain at the bottom do get rid of any "stuff" at the bottom. The past 3 times I have opened the drain, the water exiting the tank was crystal clear. After seeing jb's comments, I will try to notice where the faucet handle ends up when it starts getting colder to see if we are using hotter water. Perhaps a combination of the diptube (thanks bc!) and hotter showers in the winter are causing this. I forgot to look at the brand, but after I do, I will check out the company's website or give them a call to solicit suggestions. I believe heaters are cheap, so worst case - I replace it with a slightly bigger one.
One other thing I forgot to mention, although I don't think it matters: the previous owners were snow-birds and were only in the house from April-May until September-October each year. I know they left the furnace's thermostat high enough in the winter to keep everything from freezing (they came up north in the winter occasionally), but may have turned off the water heater during the winter months - perhaps this caused a problem?
Thanks everyone! Unfortunately, I am generally the 2nd shower!