Where Are All the Cottage Buyers?Real Estate Resources
Where Are All the Cottage Buyers?
They are still around, there are just fewer of them. I personally think many are at Pearson!
All kidding aside, we knew the frenetic buying could not last. It was only going to be a matter of time.
Where it began….
In March 2020 uncertainty was at its peak, and no one could have anticipated what the next two years would hold, not only for real estate but across the world. As we navigated through unchartered “waves” in lockdown, real estate was deemed essential, and with a huge sigh of relief, strict protocols allowed us to perform “business not as usual”. Many had to adapt to spending more time at home whether that was related to work, personal reasons or both. Home became the hub for more than just a residence. With people literally shut down, the once-bustling cities had an apocalyptic feel. The idea of space to breathe, roam and not be on top of your neighbour became a vision for those wanting out! The was the beginning of the migration from city life to rural life.
In 2020 we experienced a 21% increase in annual average sale price, compared to 2019 where there was a 10% increase in the Huntsville/Lake of Bays waterfront market. The bidding wars, bully offers, and offer dates were not common in our Muskoka marketplace. We all needed to adapt. Prices continued to increase as demand continued to grow. People were even purchasing sight unseen, through a virtual showings. What I was witnessing personally, felt almost reckless as many buyers were going in with high priced offers with no conditions. I recall seeing cottages sell and literally being shocked at what they sold for. As time went on, not much shocked me.
2021 did not slow down, in fact, it sped up, especially in the early part of 2021 when we saw cottages selling in January. Again, this was not typical for our market. The cottage market traditionally starts in late March into April. The frenetic buying continued with people wanting to have their escape whether that looked like a cottage or a full-time home. The ability to work from home was definitely a driving force for many looking to migrate north for a different lifestyle. After all, isn’t that why we chose where we live work and play, for lifestyle? Into the latter part of 2021 the frenzy subsided somewhat, however, demand still remained high.
2022 also had an early start out of the gate, until the Bank of Canada introduced their second rate increase April 25th. Many cottage buyers hit the pause button. Another factor contributing to the froth (aka.frenzy) settling, that could be attributed to more people travelling. The line ups at Pearson could speak to this. As restrictions have lifted, for the most part, people are getting back to a sense of normalcy. Of course, there are also the troublesome circumstances happening in the Ukraine right now, record inflation and fear of a looming recession.
Where are we going?
So what does this mean for the Muskoka cottage market?
The froth has most definitely dissipated, however, the Muskoka cottage market has not dried up. There is still demand, however, what has changed is the surplus of this demand. Unlike the residential market, a cottage remains a “want”, not a need, so buyers will be patient until they find the one for a price they are willing to pay. Many buyers are exhausted and frustrated from the past two years. Many are savvy and will take a “wait and see approach”. For people considering selling in this market, I am sorry to be the one who tells you this, but it doesn’t matter what the cottage down the road sold for a year ago, 3 months ago or even 3 weeks ago.
The market right now is what matters and in order to attract serious buyers, you would be wise to temper expectations surrounding price. Buyers are out there and the market remains strong, for those properties priced to sell…not test the market. That’s a slippery slope and a topic for another time!