A rebound to a normalized real estate market is underway after an extended period of low volumes in sales and some price reductions during 2022 and 2023.
Those lows followed the historic highs in values and sales during the height of the pandemic, which was a relatively predictable outcome considering what took place throughout cottage country and beyond.
The combination of inflation, the Bank of Canada raising interest rates and a lack of inventory aligned to cause the slowdown.
But there is optimism for 2024 for a variety of reasons, explains Bob Clarke, owner of Royal LePage Lakes of Muskoka Clarke Muskoka Realty, whose Port Severn office caters to the cottage market in Simcoe and Georgian Bay.
“Interest rates are staying flat,” says Bob. “They were supposed to be cutting rates in early 2024 – the spring – but that keeps getting pushed later and later. However, there is confidence returning to the market because the rates have stayed level for a while.”
Supply and demand
For one, despite a slow market, the lack of inventory didn’t cause any unforeseen price drops – there weren’t many desperation sales to cause a ripple effect.
“There was only a 30-to-60-day window where a handful of sellers were finalizing deals well off their original number,” says Bob. “On the flip side, you’re still seeing some sellers and their agents listing numbers that were seen at the height of the pandemic.”
Bob says their team offers realistic advice to their clients, and shows them that even listing at today’s numbers, they’re still doing very well in the market.
“We explain that in many, many cases from 2019 to the peak of Covid, property values went up by 60 percent,” he says. “In the last two years, the numbers have slid by 10 to 20 percent. That’s when some people say, ‘oh my, we’re down 20 percent.’ But that’s not really the case. In reality they’re up by 40 percent.”
Bob is also optimistic about seeing more inventory come onto the market this year, something that his brokerage has already seen this spring.
“The demand is still greater than the supply, but we’re expecting to see more deals being made this year.”
The outlook is bright for those wanting to purchase a piece of property in cottage country this year as more inventory is expected on the market: just don’t expect prices to drop, as there continues to be high demand for little supply.
TEXT CHRIS OCCHIUZZI
