Much like the rest of Ontario, the Muskoka region is sitting in a pronounced seller’s market. With a surge of buyers and historically low inventory, multiple offers and above-asking sale prices have become the norm.
The Muskoka residential real estate market saw a 21% increase in unit sales in the first quarter (Q1) of 2021 with 161 sales compared to 133 in 2020. However, sales would have been significantly higher if more homes were available for sale. The average residential sale price also rose 62% to $685,984 in 2021. (Keep in mind that the sample size is still relatively small, so we expect these price increases to moderate as the amount of unit sales increases.)
The number of units sold over list price spiked, too. By the end of Q1, 46% of sales sold over asking. (Note: Historically, 10% of homes would sell over list price in a more balanced market.)
With the high demand driven mainly by out-of-town buyers from the Greater Toronto Area (GTA), the region’s largest towns saw a significant rise in sale prices. The average residential sale price in Bracebridge for Q1 climbed to $663,204, a 58% increase from $419,468 in 2020. Huntsville’s average sale price also surged 57% from 2020 to $696,682 and a 52% increase from 2020 to $608,858 for Gravenhurst. Meanwhile, 76% of residential property sales in Bracebridge, 74% in Huntsville, and 65% in Gravenhurst sold above the original list price.
The typical buyers are young families and couples planning long-term for retirement, and they’re commonly looking for single-detached homes or townhouses. But with demand at an all-time high, buyers are making aggressively priced offers with the least amount of conditions to increase their chances of securing a property. There’s a considerable amount of risk involved in waiving conditions (i.e., financing, home inspection, etc.) that many first-time homebuyers aren’t willing or simply cannot make.
Despite a lack of inventory in the region, the Muskoka real estate market is also witnessing record-setting growth in waterfront property sales. In Q1, sales rose 240% from 35 in 2020 to 119 in 2021. Waterfront property sales also surged 59%, with the average price sitting at $1,492,992. The median price increased 65%, to a record high of $1,095,000.
With more people flocking to Muskoka searching for less congestion in the wake of the COVID-19 pandemic, steep prices are likely to continue in 2021. A recent Royal LePage survey forecasts prices in Ontario’s recreational regions, particularly in Muskoka, to increase by at least 17%.