Written By: Kayla Gladysz – storeys.com
For months now, Muskoka real estate activity has been smashing records across the board. Unsurprisingly, March proved to be no exception.
Newly-released data from the Canadian Real Estate Association (CREA) shows waterfront property sales numbered 210 units in March. This total soars 223.1% over sales from the same period last year and — yes — sets a new sales record for the month at large.
Meanwhile, non-waterfront sales activity totalled 383 units last month. This gain, albeit not as striking as that of waterfront sales, is still intense, rising 87.7% over the same period in 2020. These sales too set a record for the month.
In response to all the bustling activity, Chuck Murney, President of the Lakelands Association of Realtors, reflects on the month that welcomed spring.
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“March was yet another record setting month for our region,” he said.
“MLS home sales set new March records for both waterfront and non-waterfront properties this past month. We also saw a significant uptick in the number of new listings during the period, when compared to the totals from the last few months. This fresh infusion of new listings helped to shore up overall inventory. Although a welcome reprieve from the recent historic lows, active listings are still hovering only slightly about the lowest level ever. This factor will continue to contribute to the extremely tight market conditions we have been experiencing over the past year.”
Where year-to-date data is concerned, waterfront sales have totaled a record 397 units through the first three months of 2021 — a count that more than doubles that of 2020; surging 154.5%, in fact. Meanwhile, residental non-waterfront sales have totaled a record 788 units, increasing 43.3% from the same period in 2020.
Also from a year-to-date perspective, the waterfront median price was recorded at $850,000, marking a 67.9% increase from the first three months of 2020. For residential non-waterfront properties, the same measure was recorded at $583,750 — a 46% rise over the same period, year-over-year.
In March specifically, the median price for waterfront property sales was $872,000, while the median price for residential non-waterfront sales was $606,000; both marked sharp year-over-year increases of 64.5% and 44.7% respectively.
“Current for-sale waterfront inventory is at a 30+ year low, which has resulted in the convergence of two disturbing trends that are negatively impacting both agents and buyers at the same time,” notes Ross Halloran of Sotheby’s International Realty. “Agents desperate to secure new listings are now “buying” listings, or “bidding up” list-price values way above any reasonable market values when assessed against recent comparable sales. Once these listings come to market, they are then further “bid up” by several buyers — and their agents, in the current multi-offer environment — in a desperate bid to secure the property at any cost (usually well above market value.)”
According to the MLS Home Price Index — which tracks price trends far more accurately than is possible using average or median price measures — the overall MLS HPI single-family benchmark price was $536,100 in March, which represents a year-over-year rise of 42.2%.
When looking at total dollar values, waterfront sales amounted to $228.4 million through March. Nevermind “more than doubling” the prior year’s total — last month’s sales surpassed those of March 2020 by 438.3%, setting a new record for the month.
Less jaw-dropping, but still a feat in its own right, the total dollar value recorded for residential non-waterfront sales was $247.6 million, which soars 175.5% over the data from last March. This total not only sets a new March record, but also amounts to the largest dollar value of homes sold for any month… in history.
“To try to fare better for their buyers in these intense multi-offer bid situations, many buyer agents are now utilizing scalable offer pricing models to predict final above-list price outcomes based on the number of competitive offers in play for a particular property,” Halloran explains.
“[Agents are doing this,] and/or including escalation clauses in their offers, increasing their buyer’s offer up to a pre-determined maximum amount to try to keep pace with rising over list bid offers.”
Halloran adds that whether one is trying to list, or trying to acquire, navigating the world of waterfront developed or undeveloped property is “often an exercise in futility and [is] certainly not for the faint of heart.”
“Indeed, listing and buyer agents trading in the recreational/waterfront market today must now contend with Real Estate Darwinism at its worst and must evolve to survive,” he says.
Maryrose Coleman, also an agent for Sotheby’s, notes that their Halloran & Associates team is beginning to see some early signs the market may be shifting. While it’s still too early to make predictions, changes taking place across the GTA, Canada, and even internationally may reflect coming transitions for cottage country.
Reflecting on such potential, Coleman says, “This will mean an interesting spring.”
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