Real Estate Market Report: 2020 Muskoka Region
JANUARY-SEPTEMBER 2020: MUSKOKA REGION
In 2020 we have witnessed the first government-induced recession. In an effort to protect the health and safety of its citizens, the Ontario provincial government, and others throughout the world, shut down the economy. This process began in March, and in various degrees, it continues to this very day. These shutdowns were, of course, a reaction to the coronavirus and the world-wide pandemic.
Interestingly, the shutdown of the economy, the physical and psychological effects of the pandemic, and ultimately the government’s efforts to assist those negatively and economically impacted by the shutdown, had different and in many cases, unequal effects on various sectors and industries in our economy. Real estate sales and especially rural and recreational marketplaces have benefited inordinately compared to other sectors – particularly, travel, entertainment, hotel accommodation, airlines, and many others.
Rural and recreational markets (and even secondary markets) have benefitted and have had record-breaking years primarily for two reasons. Because of the highly contagious nature of the coronavirus, urban dwellers (especially high-rise condominium apartment owners) have sought out space and sanctuary available in rural and recreational areas and regions. Secondly, the pandemic has accelerated forces already at play: namely technology’s ability to allow people to work remotely. Effectively these two very important developments untethered people from dense, crowded urban regions, allowing buyers to move permanently or just seasonally to rural and recreational regions.
So it is with some humility that I begin this report, recognizing that there are many sectors in our economy that have not had banner years – in fact in some cases have had no positive returns, in some cases none at all, since March of 2020.
Throughout 2020, and especially after the implementation of the provincial lockdown and emergency measures, demand for recreational properties skyrocketed. Unfortunately, demand was not matched by supply. The supply of waterfront properties in Muskoka and the surrounding marketplaces has been a problem for more than three years – it was further exasperated in 2020.
In 2019, 1,359 waterfront properties came to the market from January to the end of September. In 2020, over the same period, only 1,228 similar waterfront properties came to the market. It must once again be emphasized that the 1,359 waterfront properties that came to market were approaching historical lows, so to see a further decline of 10 percent in 2020, in the face of rising demand (for the reasons set out above) created a critical situation resulting in unforeseen competition for those properties that did become available. The end result was multiple offers and rising prices.
Whereas inventory moved downward, sales skyrocketed upward. Year-to-date 898 waterfront properties were reported sold this year. This is almost 40 percent more than the 649 waterfront properties reported sold over the same period in 2019. The chart below visually shows the dramatic increase in sales, driven by the factors set out in the introduction to this market report.
At Chestnut Park, we were able to positively reverse both of these market occurrences. On a year-to-date basis, the number of properties brought to market by Chestnut Park’s realtors actually increased by 24 percent, and sales increased by an eye-popping 78 percent compared to 2019. Read More
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