The Pandemic Market is Over
By: Susan Benson & Mark Benson
- Growing competition
- Increased time on market
- The first signs of a change from list price depreciation to actual, albeit modest, sales price depreciation. There are fewer competing offers and this strategy is increasingly risky for Sellers.
Led by waterfront properties, July brought the earliest signs of price depreciation in addition to the list price corrections that we have been watching unfold over recent months. This, in the face of accumulating inventory across all segments due primarily to a 34% July drop in unit sales.
While new listings across all market segments declined by 4% in July 2022 as compared with July of 2021 total active listings are up 33% and inventory is at 3.8 months as compared with 1.9 last year – this still contrasts sharply with the 6 to 9 months of inventory in pre-COVID years.
Waterfront drove overall price depreciation in July with a drop of 13% average price and a 7% median decline as compared with July a year ago. This contrasts with a median price increase of 11% to $741,000 across all combined market segments and an average 6% price decline month over month to $911,631. Average days on market grew from 13 days to 19 days which is still by any measure, short! The decline in sales activity over the summer is typical of a more normal cottage country market that softens through July and August with new listings coming on as part of the regular fall sales cycle.
Year to date market wide unit sales are down 35%, new listings are down 13% and months of inventory is at 2.2 months. While average price is up 16% at $1,017,381 much of this was driven by Q1, while year to date days on the market has increased ever so slightly year to date from 10 to 11.
What This Means for Buyers and Sellers
Buyers now have expanded opportunity for negotiation within what no longer remains a Seller’s market in Muskoka.
For those thinking about selling – prices remain at or close to historic highs, while interest rates, inventory and days on market are still very low by comparison to a normal, more balanced market.
Following years of significant appreciation, July numbers saw both an average price drop of 13.6% to $1,109,971 and a 7.3% median decline to $825,000 as compared with July of 2021.
While year to date inventory at 3.1 months has doubled as compared with a year ago, again, it remains well below pre-Covid levels of 6+ months. Even as we are observing list price corrections, correctly priced properties are selling and the average list to sell ratio remains at 102% as compared with 109% last year at this time.
There are currently 301 waterfront properties for sale in Muskoka. 165 are listed at or above $1,000,000 including 21 for over $5,000,000 and 7 for over $9,000,000. The highest listed waterfront property available in Muskoka is at 1532 Mortimer’s Point Road, for $14,495,000 down from the original list price of $16,995,000.
There have been 5 sales of property over $9,000,000 so far this year with the highest for $17,250,000 at 1041 Orgill’s Point Road on Lake Joseph.
737 residential properties have sold via the Lakelands North Real Estate Board year to date, down 23% as compared with last year. Active listings have increased by 6% and the list to sell ratio is at 108% up 2% over last year. Inventory remains very tight in this market segment with 1.6 months of inventory, up by .5 from a year ago and far short of the 4-9 months pre covid. Year to date average price has increased by 16% to $702,787 and the median has increased by 15% to $650,000.
There are 227 non-waterfront single-family properties for sale in Muskoka including 69 above $1,000,000. 2 months ago, there were 55 properties listed above $1,000,000.
The most expensive property listed is at 160 Rowanwood Lane in Huntsville at $2,595,000 down $300,000 from when was first introduced to the market 44 days ago, and more than twice the price paid for it in January 2022 at $1,240,000. This speaks to the issue of list price depreciation versus actual price decline.
*PLEASE NOTE: As at January - August 1st, 2022 unless otherwise noted. Ongoing updates to follow as information is verified. Our reports are prepared using a variety of resources, including Royal LePage Canada proprietary research, The Canadian Real Estate Association, The Lakelands Association of Realtors; *Lakelands North (Haliburton, Muskoka, Georgian Bay, Archipelago, Parry Sound, Severn).