Real estate agent Treat Hull compares purchasing a property in Prince Edward County this spring to buying toilet paper last March — they are pandemic purchases that take commitment and patience.

He’s not alone. Across Ontario, but especially within a couple of hours’ drive of Toronto, agents say multiple offers and over-asking prices have become the norm in rural towns and lakeside resorts.

The white-hot property market is the result of city dwellers being freed up to telecommute, historically low interest rates and the pandemic search for space in places where work-life balance seems eminently more possible. Add to that the fact that people who have maintained their employment through the public health crisis suddenly have more savings to spend on a second home.

“County real estate prices have become disconnected from reality,” said Hull. “A few years ago $600,000 or $700,000 was a lot of money here. That’s kind of mid-market now.”

One of his clients, who bought a bungalow in the picturesque town of Picton, east of Toronto, last September for $400,000, received an unsolicited offer six months later for $600,000 – a 50 per cent increase.

“You don’t have to be an economist to know that something is out of kilter here,” said Hull.

COVID-19 has accelerated a trend that started around 2017, said John O’Rourke, broker at Royal LePage Lakes of Muskoka. That’s when people in their fifties started easing into retirement, buying up homes in the Muskokas and telecommuting to work.

“We’ve had 80 sales in January and February. Fifty-one sold over list price,” he said, citing a cottage south of Gravenhurst that drew 71 offers.

“It was listing for $399,000 but it went for well over that,” said O’Rourke. “Anything in the $400,000 to $500,000 range is immediate action, selling well above list.”

Royal LePage expects vacation property prices to rise 17 per cent this year in Ontario and Atlantic Canada, the company said in its 2021 Spring Recreational Property Price Forecast on Tuesday.

As hot as things were last year — and that market was tight — this year will push prices further north, said CEO Phil Soper.

“What it means is that over the course of a couple of years we’ll see the cost of a acquiring a cottage increase by a third,” he said.

The Royal LePage report shows that the price of waterfront property in the Muskokas and Gravenhurst climbed 28 per cent between 2019 and 2020 — from $765,000 to $979,000 – up almost a quarter of a million dollars in one year, said Soper.

Haliburton saw a similar gain of 27.3 per cent for waterfront homes and Kawartha prices climbed 26 per cent, according to the report.

If you’re buying on one of Muskoka’s “big three” lakes — Lake Muskoka, Lake Joseph or Rosseau — “the truth is” $2 million is an entry-level property on an island, said Soper. Many homes sell for $3 million to $5 million.

Chuck Murney, president of the Lakelands Association of Realtors, said the number of homes for sale is the lowest in more than 30 years.

In his district, covering Muskoka, Parry Sound, Haliburton and Orillia, year-to-date sales of non-waterfront property were up 13 per cent. But on the water, there were 180 sales in January and February — a 96 per cent year over year increase.

“It’s still possible to find vacation properties but there’s a shift in expectations of values and needs and wants,” he said. Waterfront properties are selling for more than twice the cost of non-lakeside homes.

About half the buyers he sees in his Re/MAX Parry Sound Muskoka practice come from the Greater Toronto Area. One of the reasons that inventory is so low is that many people who already own cottages aren’t listing them and moving up. Instead, if they’ve got road access, they’re renovating and turning them into four-season homes, he said.

As long as the demand continues, Murney expects prices will head north.

In the meantime, he says clients need to be ready to respond if a listing becomes available and they need to have their financing in order so they can go in with a clean offer. In multiple offer situations, it’s tough to win with conditions so Murney urges his buyers to bring a contractor or home inspector to visit a property with them and prepare for the possibility that, in a 15-minute viewing appointment, that inspector might miss something.

But Royal LePage CEO Soper said vacation properties are “streaky” — they go through hot spells and then they settle down and prices remain stable for a few years.

“This won’t continue. It’s a short-term phenomenon determined by a bunch of things. COVID is part of it,” he said. “We’re in one of those cyclical times when there’s more demand than we have supply.”