For many buyers purchasing a cottage in Muskoka has become much like placing a bid for a prized collectable in a packed auction house. With many factors driving demand for recreational property, it’s been this way for over a year, explains Gord Waites, sales representative with J & D Rushbrooke Realty in Port Carling and a Muskoka cottager for over 30 years.
An array of influences are motivating buyers; the fear of missing out on the cottage lifestyle: the ability to work remotely; an excess of funds due to lack of international travel; low mortgage rates; and a desire to escape the city. And, for some, the pandemic simply accelerated long-term dreams of Muskoka cottage ownership.
Any of these factors alone would have an impact on demand. With all of them in play at the same time, the recreational property market is best described as frenzied. By almost any measure, the 12-month period that ended in May 2021 was the most dramatic year on record in the Muskoka recreational market.
“We have a historically low inventory combined with unprecedented demand,” says Gord. “These factors are driving incredible transaction and pricing figures on cottages and properties throughout Muskoka.”
At the beginning of the pandemic in early spring 2020, uncertainty in the economy applied a sharp brake to the recreational market. Yet by early June 2020 demand surged, and sales – tempered only by lack of supply – hit all-time highs. Prices spiked accordingly.
High demand and low supply moved us into a pronounced seller’s market. Multiple offers, typically seen on 10 to 15 per cent of sales in more balanced markets, became commonplace during the pandemic in Muskoka.
“By the fall of 2020, around half of all sales resulted in bidding wars, with many properties intentionally under-priced to generate multiple bids,” says Gord. “This had mixed results, as some came out way ahead, while others only met the asking price.”
To call this a seller’s market is an understatement, with many cottage properties moving quickly after being listed, as well as being sold for over their listing price – sometimes well over.
This unique situation underscores the need for sellers to be working with an experienced local realtor – who can provide a level of calm and good counsel amidst all the noise and elevated emotions.
“Although we are in a seller’s market, it doesn’t mean sellers aren’t under a fair amount of stress,” says Gord. “A good realtor will suggest pricing strategies and a game plan on how best to deal with incoming offers to ensure sellers maximize their return. Solid communication and adaptability are more important than ever. We want sellers to be completely confident in their decisions.”
“A lot of the prep work is done even before the property hits the market, ensuring that problems during negotiation and after offer acceptance are avoided. Local knowledge helps immensely.”
Big Demand on the Big Three
Of the nearly $1.5 billion dollars in recreational sales volume across Muskoka in the past year, over half was a result of sales on Lakes Rosseau, Joseph and Muskoka. The average price for a cottage on the “Big Three” jumped by 29 per cent to $2,791,502 and the median price soared to $2,152,000, a 43 per cent increase over 2020. In the past we might see certain price points or areas outpace other segments, but in the past 12 months virtually all price points and markets are breaking records.
“We also saw an all-time high in unit sales year over year,” says Gord. “There were 286 units sold this year, which is unprecedented in this market.”
By The Numbers
No matter how you look at it, sales and prices are way up across Muskoka. In comparing the 12-month period ending May 31, 2021 to the prior 12 months ending May 31, 2020, the numbers are off the charts.
A 30 per cent increase in the average price of a Muskoka cottage from $1,254,185 to $1,632,414.
Median price increased to $1,100,000 – a 37 per cent increase.
886 cottages sold in the period ending May 31, 2021, compared to 504 in the prior year – a 75 per cent increase.
While sales are up, the number of available properties continue to decline. Since mid-2017, the number of active waterfront listings has dropped by 58 per cent. In 2020-2021, there were 1,130 active waterfront listings. Four years earlier, there were 2,719 active listings.