Looking Forward to 2021: Real Estate Forecast
Spirits High As Muskoka’s Real Estate Market Zooms Into 2021
There’s good news on the horizon for 2021 beyond the promise of the pandemic’s end. Real estate markets are thriving now, and key experts remain optimistic for the coming year. “Despite the tragic impacts of the pandemic,” says Elton Ash, a RE/MAX vice-president, “our optimism in the strength of Canada’s housing market has always remained.”
The Good News
Spirits are high, especially among sellers in Ontario, where average sale prices are expected to rise by more than 10% in 2021 depending on the region you’re in. The residential market outlook for the Muskoka region has estimated average residential sales prices rising by 13% in 2021. Properties that sold for $466,154 in 2020, for example, are forecasted to sell for $526,754 in the coming year. The province’s luxury markets are also thriving. Demand for high-end homes and cottages is enjoying a healthy spike—a trend that of course impacts those lakefront properties here in Muskoka. Plus, the average number of days on the market are expected to decline, which means, in many cases, buyers and sellers can anticipate multiple offers.
A Strong Seller’s Market
Two main forces are driving Muskoka into a 2021 Seller’s Market:
- The influx of out-of-town home buyers
- Access to high-speed Internet
There is zero doubt COVID-19 has heavily influenced Canada’s real estate buying and selling habits. “We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, a RE/MAX vice-president. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021."
Buyers On The Move
It seems that buyers who are interested in the Muskoka region are in search of more space. RE/MAX surveys reveal that in the wake of the pandemic, homebuyers are seeking more square footage as well as more green space outside. Driving factors also include a rise in remote work (the ability to work from home), the implementation of better, stronger internet services in small towns, a desire for more space and less density, as well as lower housing prices offered outside major cities.
“Canadians are on the move,” states a recent company-wide study. “RE/MAX isn’t calling this an ‘exodus’, but the re-location trend across the Canadian housing market is real.” The report also predicts that the ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Spotlight: Muskoka
How does all of this play out in Muskoka? Here’s a summary of forces affecting our local real estate market:
- Muskoka saw an average waterfront price of $1.2M in 2020 - up 24% from 2019, while our non-waterfront average sales price increased by 20% to $475K.
- The housing supply across the district is currently a challenge.
- Top neighbourhoods continue to be Huntsville, Bracebridge and Gravenhurst—the largest towns in the district.
- Typical first-time buyers here are seeking single-detached homes within a price range of $300,000 - $400,000.
- New construction developments here are uncertain as they face delays due to cost increases in materials and shortages in labour.
- Luxury buyers that come from larger Ontario cities and will spend more than $2 million per property.
Optimism Continues
Overall, while the pandemic continues to unsettle Canadians, experts remain optimistic regarding its impact on the national real estate market. Many agree it comes down to a want and need for more space, especially among younger demographics who have the ability to work from home. “Younger Canadians under age 35,” says a recent report, “are significantly more likely to have realized that they need more space and are motivated to move out of their current neighbourhood.”
In short, good news for the 2021 Muskoka real estate market. If you are interested in knowing the current value of your home, contact us for a free home evaluation.
- Dolf and Anzie Witlox
Dolf - 705.787.6196
Anzie - 705.571.0587
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