High-stress address

Looking to buy in cottage country this summer? Good luck. ‘It’s a dogfight to get anything’

Royal LePage realtor Gail Burton remembers when she would get in her car and her clients would follow her around the Lakefield Kawartha Lakes area, touring one cottage after another in search of the perfect vacation home.

But when a buyer called her recently asking if they could see seven cottages in a day, Burton had to tell them there wouldn’t be seven cottages available in their price range.

“There are lakes that have zero listings, and they haven’t had any listings for months,” she said, noting there are still lots of buyers but far fewer cottages to show them.

The last two seasons have been record-setters for sales and prices in cottage country. But some realtors are reporting the bidding wars and buying frenzy is showing signs of slowing, in many cases because there’s so little left to buy and demand is expected to outstrip supply for the foreseeable future.

That means prices in most resort areas are continuing to rise even if, like the GTA, sales are softer this spring.

Even seasoned realtors are struggling to predict cottage values.

“I can give you my thoughts, but it’s that buyer that’s going to tell you what it’s worth right now,” said Burton.

“If you’re in multiple offers, then you just don’t know. I’ve been shocked because we’ve had really good listings over the last 12 months and I’m seeing the offers come in and I’m thinking, ‘Wow, that’s a great offer.’ And then one comes in $200,000 over what I thought was an amazing offer.”

Five years ago, cottage country realtors were reporting record numbers of city dwellers stepping into retirement by telecommuting one or two days a week, cashing in their equity to snap up lakeside retreats and renovate them into four-season homes.

But when COVID-19 curtailed travel plans and shut down kids’ camps two years ago, GTA residents in their family years went looking for vacation spots, grabbing available listings and sending prices soaring.

Burton says last year’s market never really ended. There was a lull in July and August but then sales picked back up and never stopped through March.

Royal LePage is forecasting a 13 per cent increase in cottage prices this year in Ontario to an average of $737,890. But buyers expecting to listen to the loons in Muskoka would likely have to spend more after last year’s 29 per cent price increase that put the average waterfront home price at $1.01 million. The Lake Huron shoreline was up 37 per cent to $835,000.

Burton doesn’t dispute the effects of the pandemic and telecommuting. But, she says, the traditional appeal of cottages has never faded.

“A lot of people have always bought for just a lovely lifestyle and what a cottage property offers to a family,” she said, noting that added to lifestyle demand is the search for short-term rental investments.

At the same time, cottages are also the most difficult properties for families to sell even when parents have passed away. “It sometimes takes years for (their children) to come to the decision.”

Re/Max Canada’s Recreational Markets Report this month forecast home prices to rise 20 per cent this year over last in recreational areas. But company president Christopher Alexander said some Ontario area sales were so high in the first quarter of this year they will inevitably show lower sales and price growth will inevitably fall short of those levels in the coming months.

Re/Max forecasts a 10 per cent decline in sales and prices for Orillia through the end of 2022. But that’s after a 34.5 per cent yearover-year gain in the first quarter that brought the average home price to $1.02 million.

Re/Max anticipates a further 10 per cent price growth to $697,000 on average in Windsor-Essex. It ended the first quarter at about $633,000 — up $151,000 from the same quarter last year. Alexander says the area is popular because of its relatively accessible price point that puts buyers amid great boating, fishing and nature but still close to the urban amenities in Windsor and Detroit.

The company’s report predicts prices will rise 9 per cent this year to $1.2 million in Southern Georgian Bay, including Collingwood, although sales are expected to slow by 2 per cent.

“It’s a dogfight to get anything. People see that opportunity and are taking hold of it in a big way,” said Alexander.

Collingwood agent Sherry Rioux said her area is still a seller’s market but there is a little more balance creeping in.

“We’re not seeing any drops in the price of home sales so far in our Georgian Bay area. But what we are seeing is a softening in that we are not getting the multiple offers or we aren’t seeing listings holding offers to the extent that they were a few months ago. The days on market is a little bit longer than it was,” she said.

The Lakelands Association of Realtors reported prices were up 21 per cent year over year in April to $1.02 million on average in the area of Collingwood, the Blue Mountains, Clearview, Meaford and Wasaga Beach.

Everyone wants waterfront, but they don’t necessarily want to pay for it, said Rioux. That’s increasing the demand for rural properties with acreage and anything with a view. That could be a golf course or any property that doesn’t have another home looking into its backyard.

“Then you have a whole set of buyers who are looking for condominiums or freehold townhomes. Those people want to lock the door and not worry about anything,” she said.

Alexander of Re/Max says there’s still opportunity to get into the market in the Haliburton, Kawarthas area east of Toronto.

“They have such incredible lakes. The town is coming into its own. There are some new businesses that have opened. There’s good opportunities there for under $1 million and I don’t know how much longer that’s going to last,” he said.