It used to take months to sell a cottage before COVID-19 hit. Now, such homes are being sold within days, sometimes even hours, of being listed. Offer nights and multiple bids are the new norm, and they have delivered both unexpected riches to many cottage country sellers and loads of disappointment for outbid buyers.
Real estate professionals in the famed Muskoka region north of Toronto initially panicked when the lockdown in March 2020 shut things down. However, a once-in-a-lifetime turnaround in housing markets took place within weeks. Cottage country realtors have not been this busy in years and there are no signs of a sharp slowdown on the horizon.
The demand for cottage country dwellings has increased for two reasons. The first is the rise of working from home or teleworking, making it possible for knowledge economy professionals to live and work from spacious residences near nature and water. Even if they can only partially work from home, they can trade in their urban dwellings for a cottage and a pied-à-terre in the city for the days when they must visit work.
Second, it is not apparent when vacationers may board a plane for trips abroad. A holiday within commuting distance is the compromise, which has increased the demand for vacation properties near urban centres.
In remote towns where multiple bids were once unheard of, the new norm involves offer nights that turn housing markets into an auction of sorts, where the bidders are at a unique disadvantage since they do not know what others have already bid. The fear of missing out kicks in, and some end up bidding outrageous amounts that they would otherwise not have if the other bids were not kept secret.
Kevin Ali, the broker of record with Zolo Realty, is all too familiar with the hyperactive housing markets in Ontario’s cottage country. He noted that a recently listed house in Severn, some 165 kilometres north of downtown Toronto, received more than 70 offers. The two-bedroom dwelling sold within four days and for almost twice the list price.
But there is more driving the hype than just the pandemic-driven demand for recreation properties.