This report almost writes itself. The market forces that have driven recreational, secondary, and rural markets have remained unchanged through the pandemic. The desire for space in settings safer than dense urban centers coupled with the ability to work remotely have made these marketplaces a magnet for buyers. Historically low-interest rates have also contributed. The combined effect of all these factors has resulted in a dramatic increase in demand, average prices, and a decline in available inventory.
For all waterfront sales across the region, the median sale price increased by a stunning 67 percent on a year-over-year basis. The average sale price for waterfront properties in the region is now $850,000. This is an eye-popping number, particularly given the broad range of property values throughout the various sub-markets region. Here are some examples of what has happened to sales and prices in the region.
Waterfront property sales in the Haliburton area more than doubled compared to the same period in 2020. These sales results represent a new record for the region. Months of inventory declined to 0.8 months (this is less than Toronto, which has had a chronically low inventory count) from an unbelievable 10.9 months last year. Correspondingly the average sale price exceeded $800,000, an increase of more
than 50 percent year-over-year, also a new record.
Similarly, in Lake of Bays sales more than doubled over the same period compared to last year, again a record. Months of inventory declined from 26 months to 3.6 months. Properties spent only 12 days on market, and the median sale price came in at $1,027,000, a 14.2 percent increase on a year-over-year basis.
The following charts (April data) detailing sales activity and days on market visually indicate how the Muskoka and region market has been changed by the prevailing market forces.
It is interesting to look at average sale prices on Muskoka’s three big lakes, Lake Muskoka, Lake Rosseau, and Lake Joseph. Unlike the other markets in the region, average sale prices have actually declined in the first four months of 2021. This is counterintuitive, given that the same economic factors are at play in the region. What has happened is that these economic factors have brought many buyers to the region seeking to purchase properties at lower price points and sellers have placed their properties on the market to be sold at exceptional prices. There has been no shortage of very high-priced sales, however, the plethora of “lower-priced” sales ($1,500,000 to $2,500,000) has brought the average sale price down dramatically, as the chart below clearly indicates.
More than 60 percent of recorded sales were in the $1 Million to $3 Million range. The big lakes are still the region’s most expensive market with 21 percent of all recorded sales for 2021 (38 properties) coming in at over $4,000,000.
Chestnut Park’s realtors have not only adapted to the new market landscape but have dominated it. During the first four months of 2021, our realtors have been responsible for 91 sales representing more than $143,000,000 in dollar volume. In 2019 over the same period (comparisons to the same period for 2020, for obvious reasons, are meaningless) we participated in 33 sales totaling more than $38,000,000 in dollar volume. Comparing 2019 to 2021 Chestnut Park’s sales increased by more than 175 percent and our dollar volume by more than 276 percent.
Looking forward, we see market activity leveling in the Muskoka and region marketplace with, of course, sub-market differences. This is due to a number of factors. Firstly, as this report indicates, prices have reached unprecedented record levels, precluding some buyers, even with “city” money from engaging in the market. Secondly, the urgency for space and sanctuary driven by the pandemic has to some extent abated, due to people feeling safer as a result of the rollout of the vaccination program in Ontario, and thirdly, more inventory coming to market.
In May of 2020, 43 waterfront properties came to market. This May, 168 are now available to buyers. Year-to-date (January to May) 582 properties have come to market compared with only 483 last year, an increase of more than 20 percent.
This leveling should not be interpreted as a slowdown or decline in the market. Rather the edges of the frantic pandemic market have been smoothed over, resulting in a still very strong but less frenetic market landscape.