We have seen some changes in the Muskoka real estate waterfront market since May/June of 2022. Muskoka cottage sales seem more familiar – aka “normal.” There are very few frantic bidding wars.
Days on Market are longer – averaging 14 for June versus 10 for May. It is still a seller’s market.
Overall there are fewer listings on the market, but just slightly. We had 604 new listings in June. May added 702 listings. Compare that to June 2021 with 645 new listings and May 2021 with 674 new listings.
The median price across the board for June 2022 was $715,000.00 compared to a median price of $650,000.00 in June of 2021. May median price was $744,590.00 in 2022 and 656,000.00 in 2021.
Interest rates are expected to rise 75 basis points on July 13. The government wants to control inflation as a priority. Curbing record 7.7% inflation is key to a healthy economy. As important as that is, fewer buyers could qualify for mortgages, thus slowing real estate sales.
Bank of Canada is expected to adjust the size of its hikes to 25 basis point increments or lower in October and December, taking the rate to 3.25% by year-end.
The BoC is expected to pause on rate increases throughout next year even as the Fed carries on raising rates. Bank of Canada predicted inflation would ease to 2.5% in late 2023, putting more money in buyer’s pockets and freeing up cash flow to accommodate cottage purchases, and the gas to get to them.
The housing market, meanwhile, has already shown signs of a rapid slowdown, albeit after eye-watering double-digit rises during the past two years during the pandemic.
“There has been some offset from the large pile of savings accumulated during the pandemic and that’s kind of cushioning the inflation pain,” said Sal Guatieri, director and senior economist at BMO.
“But eventually that will wear off and we will see high inflation curbing spending even more dramatically in the year ahead.”
We are cautiously optimistic that the rise in interest rates will not slow the cottage sales market. There is a very large buyer pool still waiting for their chance on a relatively small amount of inventory.
A recent survey showed a median 35% chance of recession within a year. It is predicted to rise to 40% over the next two years.
We have posted a file of the relevant stats for overall waterfront market activity and waterfront market activity by location below, for our more analytically minded friends.
If you’re looking for non-waterfront stats or anything else that we haven’t included please email us at email@example.com or firstname.lastname@example.org. We are able to provide statistics at any level of detail that you like. We’ll be happy to send them to you!
So that’s it – that’s what’s happening in the Muskoka real estate market July 2022.