Melissa Johnson has lived in Bracebridge her whole life, but her family’s future in her hometown has never felt so out of reach.
For the past several years Johnson has closely monitored the housing market and is currently working with a mortgage agent to get a mortgage pre-approval — but what should feel like an exciting new chapter is turning into a stressful experience.
“Before the pandemic, housing was attainable,” Johnson said. “People with an individual income of $50,000 could buy a home themselves. Now you have to earn $100,000 to $150,000 just to purchase a home.”
Johnson recently separated from her husband, who bought their riverfront home on half an acre of land. Johnson moved out and now rents a three-bedroom duplex for $3,000 a month.
She’s working with a realtor to find a new home to move into with her little kids, but as each day marches on it’s not looking hopeful.
Home prices in Muskoka skyrocketed during the pandemic, as once interest rates hit historic lows city dwellers and investors wanted a slice of the cottage industry gem.
In 2020, the average non-waterfront property sales price was $409,000. In 2022, it shot up to $730,000, according to OnePoint Association of Realtors, which represents 3,000 real estate professionals across the regions of Huron, Perth, Grey, Bruce, Wellington, Georgian Bay, Simcoe, Parry Sound, Haliburton and Muskoka.
While prices have dropped since the pandemic peak — with some pandemic buyers seeing declines of as much as $365,000 when selling — on average, prices are still significantly higher than pre-pandemic, including in Muskoka where the average is now just under $700,000.
That’s hurting local residents who want to buy housing in their hometown.
Johnson remembers in 2018 you could buy a townhouse for around $300,000. Now, it’s more than $600,000. During the pandemic she saw dozens of buyers pile into the market either hoping to move to quieter pastures with ample green space or cash in on the cottage rental market.
Johnson said homes were getting snatched up, with many on the market for just one day — unheard of before 2020.
“When I lived on the Muskoka River I counted 422 short-term rentals in the area based on what I could find on Airbnb alone,” she said. “And then there are people in my community struggling to find a home.”
While home prices in Muskoka, as with many other regions in Canada, increased significantly, Muskoka incomes have lagged far behind, said John O’Rourke, broker, Royal LePage Lakes of Muskoka.
“The average price for a home last year was around $730,000 but the average household income in the area is $108,000,” he said. “To qualify you need an income of $145,000.”
The work in Muskoka is seasonal, dominated by service-oriented jobs that don’t pay as much as in urban centres.
“People who came and bought here (during the pandemic) had higher paying jobs, and had the benefit of that income,” he said. “Locals in smaller communities just couldn’t compete.”
For locals looking to buy, if a home goes on the market in the low $600,000 range, there will be a lot of activity, he said. People’s choices now are driven by price instead of the qualities and amenities of the home.
“Ten years ago you could get a really nice home for $200,000 and that doesn’t exist anymore,” O’Rourke said. “It’s not a good situation.”
Some locals are moving out of Huntsville and Bracebridge proper and commuting in for work, but it impacts the vibrancy of the local communities, he added.
As a small-business owner of a micro flower farm and private early education services, Johnson has thought of moving but her business, children, family, and lifelong friends are in Bracebridge.
She’s often in conversation with many local residents, and says that everyone is struggling — her friends in real estate tell her many people are leaving because they can’t afford to live in the town anymore.
“It’s just devastating, they have to leave their families, they have to leave everything.”
Johnson acknowledges that tourism helps support the local business, including her own.
“Part of my business is dependent on seasonal occupants and I love our tourism, there are pros and cons to everything,” she said.
“It’s just the imbalance in our community and real estate market. Not enough housing and affordable housing is being built and we’re paying the price.”
