"We had a [property on a] small -- tiny -- spring-fed lake in Muskoka, where the list-price was $599,000, and it sold in two days for $875,000," says Ross Halloran of Sotheby's International Realty, reflecting on the first few weeks of the year.
That's $276,000 over list price for a two bedroom, one bathroom, "teardown" cottage. Welcome to the current Muskoka real estate market in 2021.
Closing the year on-trend with what the last several months presented, the region's real estate scene saw record-breaking sales in both its residential non-waterfront and waterfront property categories in December.
And looking forward, Halloran -- alongside Maryrose Coleman, also of Sotheby's International -- doesn't anticipate a decline in buyers' desires to snag space in Muskoka.
What the pair does foresee, however, is supply struggling to keep up with demand.
A Market as Tight as Ever
"I never like to let my listing inventory drop below 30," Halloran says. "We're now at seven."
Coleman reinforces the sentiment, stressing the issue their team continues to face is supply. At the present moment (and for months leading up to the present moment, too) demand is holding its own.
"It's a really tight market," Coleman says. "There's very little available. And there are a ton of buyers out there trying to find the right property."
In fact, Halloran goes so far as to call the current situation "a bit of a quandary." Typically, considering cottage country as a whole -- from Parry Sound to Lake Simcoe, and down to Bancroft, inclusive of Muskoka, the Kawarthas, Haliburton, and the like -- he and Coleman will see about 100 new listings in a given week.
Lately, though, Halloran says they're seeing far fewer hit the market.
"It was 13 listings last week... as we end this week, 22 new listings have come up," he says. "We've got a stockpile of buyers, because we had so many listings we were able to engage and begin discussions with a number of buyers that had begun their journey... we've got what we would normally have in property inventory in buyer briefs."
In other words, the numbers have essentially reversed themselves, leaving this Sotheby's team spread thin.
As a result, Halloran and Coleman say they've needed to develop new policies for navigating working relationships with buyers. With so many people requesting their time, asking for research to be done on prospective properties, they've found themselves going through that whole processes only to find out -- as they're preparing to move forward with an offer -- they're actually in a multi-offer situation.
And let's be clear: this mad dash for cottage country real estate isn't just for multi-million dollar, move-in ready properties (though, of course, those are always a sought-after treat). Coleman says that there are "a whole bunch of people" who are looking for tear-downs or lots they'll be able to build on, and typically, these buyers are hoping to snag spaces like this at prices much lower than those of move-in ready lake houses.
"Part of the challenge is, there are a lot of people who are very specific about what they want," Coleman explains. "They want to be close to Port Carling, but not right in Port Carling. They want to be on Lake Rosseau or Lake [Joseph], they don't want to be on any other lake. They need privacy, they want a boathouse."
If these desires sound familiar, don't fret. But also, don't start packing up your boxes just yet.
"There are only so many properties like that," Coleman says, "but there are a great number of people looking for them."
Halloran says that, as such, they're working to do whatever they can to obtain listings as spring approaches. "You are a function of how many listings you have," he stresses.
Owners Holding On Tight
Halloran says that going forward, he expects a sellers' market for the foreseeable future. In order to be able to participate in the year ahead, attaining more product is necessary.
"Usually in the spring -- come the beginning of March -- we're usually seeing an average of 200 new listings a week leading up to the Spring Cottage Life Show. Then there's a drop-off, after the Spring Cottage Life Show, and then probably by late-April we're back up to 200. I think by the time the end of May rolls around ... I'd see about 300 listings [across all of cottage country]."
But right now, the region is seeing about 22 listings per week, on average, while days-on-market stats are dropping and sale-to-list averages are increasing. In fact, at the moment, the Lakelands region is looking at less than 0.6 months of inventory -- a record low.
As a result of all these changes, Halloran says he expects to see both individual agents and teams alike presenting with less than half their normal inventory. His personal goal? Attaining between 20 and 30 listings before spring hits.
"We've got a lot of work to do over the winter," he says.
But, with ongoing queries, listing proposals, market analyses, direct correspondence, and new product continually being added, it's safe to say the team has already hit the ground running.
Still, it'll be "a grind" to get ahold of sustainable inventory, because people are hanging onto their properties... or perhaps they've just recently acquired them, and they're still just settling in! Never mind considering leaving. After all, the last year has proven a flexibility in day-to-day navigation that many may not have considered before, which, in many cases -- with consideration to working from home and online schooling -- means more room for cottage country to fit in. Whether someone's long been in the region or only just arrived, it's understandable that Muskoka living is an experience any owner would want to hold onto.
"[What] the people that own are telling us now is: 'Sure, I can make a huge profit, but how am I going to be able to buy back in?'" Halloran reports. "'I may as well just sit tight for now and enjoy what I have... or renovate what I have.'"
Selling your property suddenly becomes less appealing when there's nothing else left to buy.
Renting as an Impermanent (but Still Competitive) Option
Meanwhile, those struggling to find their perfect property in the resale market -- or those simply looking for a less permanent cottage country experience -- tend to turn to the region's rental market. But Coleman, who captains Muskoka District Rentals alongside her Sotheby's role, says the sector is facing similar supply-and-demand struggles.
"There are a lot of people who aren't renting who traditionally have rented, when they've gone on European vacations [and the like]," she explains. "They might have done the summer -- they would rent their cottage for the two, three, four weeks they were going to be away. And that's not happening now."
While Coleman says there have been some recent buyers who are open to renting, there have also been properties that used to be on the rental market that have now been sold. In essence, the newly-purchased properties will merely replace those prior rentals, instead of adding to them.
There are also places that may typically be in the rental sphere, but because their owners are currently living or working there, those spots aren't available these days. What's more, an air of uncertainty hangs over the summer, leaving cottage-owners unsure of how they're going to navigate 2021's warm months. So many unknowns linger, including whether summer camps will be closed or if international travel will be permitted.
Many people who felt the pinch of these scenarios last summer, and who didn't have a rental option, learned from the experience and booked early. In August and September of 2020, eager summer-lovers reserved their rentals to ensure they'd have something to look forward to when the warmth rolled back around.
Now, Coleman says, others are scrambling, trying to find their own place to stay.
And sure, someone really hankering for a summertime escape could hop on any given rental site to book, but what Muskoka District Rentals offers is different.
"Part of the reason people like to work with a company like ours," Coleman says, "is they know they'll get a higher quality of cottage, and they're going to have available to service them, if anything goes wrong."
Also, there's a benefit to the relationships that are built through use of a reliable, human-centred service such as MDR. For example, if someone isn't able to find a rental option online, a phone call with a listing agent may result in them learning that in just a couple days, the perfect property will be going live.
Ultimately, it's looking like Muskoka's wild ride isn't slowing down anytime soon, regardless of whether the topic of focus is resale or rental. And, if the region's market has reinforced any universal truth over the last several months, it's that the more people can't have a thing, the more they seem to want it.
But another universal truth is this: anything worth having is worth fighting for.
If you're gunning for a place with a Lake Jo view, or one that's perfectly poised just minutes from Port Carling, we suggest the latter mantra as the one to keep in mind.