Be prepared for the long game
Many are wondering what is happening to the Ontario real estate market as summer approaches. The trends regularly reported in much of the province don’t hold true for the waterfront in Muskoka.
Muskoka waterfront properties are an anomaly in the world. It’s odd to me that Muskoka is often described as the Hamptons of Canada. You can own a multimillion-dollar waterfront property in the Hamptons, but the public can walk the beach in front of it. The District of Muskoka has 1,600 lakes, on which the shoreline is mostly rocks and trees.
During the last century, the Province of Ontario sold and/or rented much of the waterfront privately to the property owners via a Shore Road Allowance. Anyone is welcome to use the lakes to fish, swim, or boat, but in comparison with the Hamptons’ beaches, there are severely limited public access points.
COVID drove eyeballs to Muskoka as people were tired of being stuck in their four walls. But for the families that have long known about these lakes, it’s usually a generational play, Grandpa discovered it ‘way back when’ and it’s been passed down through the lineage. Add the words ‘seldom openly traded’ to ‘scarce to begin with’ and the results will continue to drive the Muskoka real estate market for years to come.
WHAT DOES THIS MEAN FOR SUMMER 2023?
Be prepared for the long game. It is taking most buyers approximately two years to ‘land’ their Muskoka lakefront property. My advice if you want a cottage in Muskoka in the next five years is to start looking now as the waiting list is getting longer, not shorter.
The 2022 data indicates some buyers are heading for islands and others to northern areas of Muskoka to either purchase properties at lower prices or more quickly. But the distance from the Greater Toronto Area is a known deterrent with the realities of road traffic and returning to “in office” employment.
My guess is we’ll see 80 per cent of the unsold inventory on the big three lakes (Muskoka, Rosseau, Joseph) return as we roll into spring, but how it’s priced compared to last summer will be the story. Some of these properties are verging on ‘past their prime’; it’s worth noting if you are willing to undertake a project of this magnitude (a rebuild or even a structural renovation) the ‘waiting list’ is shorter.
THE DOUBLE EDGED SWORD
Sellers:
• recognize the lack of inventory so over price.
• think that by listing higher there are better odds of negotiating the price they want.
Buyers:
• are savvy and have looked at all properties thoroughly online or have sent their agent. If they’re priced too high, they won’t take the time to go see it in person.
Takeaway for sellers is:
• If you don’t get the foot traffic, you’re doing yourself a disservice.
• Overpricing often results in longer days on market and a lower sale price than if you price initially at fair market value.
Between the differences in lakes, changing bylaws, building codes as well as multilayered governing bodies, the Muskoka cottage market is only getting more complex. Whether you are buying on the open market or inheriting your family cottage, leveraging a local realtor who lives and breathes this daily, is going to be paramount to your success.
Kelly Fallis is a realtor with Chestnut Park Real Estate Limited in Port Carling and also owns a Muskoka building company, RS Muskoka, with her husband.
