A seven-figure budget didn't give John Orsucci the buying power he expected while shopping recently for a getaway house on Lake Vermilion.

One of the first homes that appealed to him sold for twice what he expected — and quickly.

"It was definitely a seller's market," Orsucci said. "I've bought a number of homes, but I wasn't ready for this lakefront competitiveness."

For lake home buyers this summer, it's a battle for the beach. Fueled by a swell of buyers who are able to work remotely, lakeshore listings are hovering near all-time lows, and prices have been on the rise in much of the state.

At the end of May, there were just 718 waterfront homes for sale outside the metro in Minnesota — slightly more than last year but 60% fewer than in 2020, according to MLS listing data compiled by LakePlace.com.

The median price of those listings was $449,950 — 6% higher than last year. With more buyers than sellers, lake home listings aren't lingering. The median time on market for waterfront properties during May was just eight days compared with 14 days last year.

Orsucci upped his budget, adjusted his expectations and didn't dawdle when he decided to offer on a $1.38 million listing.

The seller spurned that offer, which was slightly less than the asking price. Then the seller said he planned to raise the price if another buyer who'd been considering it didn't pay the full asking price. That buyer did pay the asking price.

Orsucci kept looking and ended up paying $1.9 million for a three-bedroom home elsewhere on the lake.

"There's still pent-up demand from last year," said Dave McNulty, a broker with an office in Shell Lake, Wis. "I'm working with a lot of people who missed out on a lake home last year."

But across the country, mortgage-rate locks for second homes have been on the decline since peaking in March 2021, according to Redfin, an online brokerage.

"When rates and prices shoot up so much that a vacation home starts to look more like a burden than a good investment and a fun place to bring your family on the weekends, a lot of prospective buyers have second thoughts," said Taylor Marr, Redfin's deputy chief economist.

He says that as companies refine their return-to-work plans many workers are finding they don't have as much freedom to work remotely.

Last summer, McNulty said, upwards of 80% of his buyers were looking for a lake home they planned to use as their primary residence. This summer, only about half of his waterfront buyers are looking for a full-time lake place.

"Last summer, we were getting 12 offers, this year we might get only two," he said. "But there's still high demand from people who want to escape the Twin Cities."

At the end of April, McNulty listed a 940-square-foot cottage with two bedrooms and one bathroom on a half-acre lot on Big Ripley Lake near Shell Lake and Spooner, Wis. The cottage has only 88 feet of shoreline, but it's level and sandy.

McNulty listed the cottage for $279,000 and scheduled nearly 20 showings in just two days. Several buyers offered, all for more than the asking price. The sale closed at the end of May for $306,000.

"It was a nice cabin that didn't need any work, and it had a perfect sand beach," he said. "The No. 1 request I get is for a level, sandy beach."

This month, he listed a lake home on a small lake outside Shell Lake, which is only a couple hours from the Twin Cities, and he got 14 showings in just a couple days.

"We only had two offers," he said. "But that sold within two days."

While rising mortgage rates and record prices are taking a little froth out of the market, McNulty said there are still plenty of people who aren't affected because they don't need a mortgage. He said at least half of his buyers pay cash, whether they're buying a $200,000 seasonal cabin or a $2 million lake home.

This year's surge in gas prices may emerge as a negative influence on second-home sales in Minnesota.

But so far, median sale prices are up in all of the state's 12 regions tracked by the Minnesota Realtors. The biggest increase was in the Arrowhead region, where the median sale price of all closings was up nearly 20% during May.

That region includes the North Shore of Lake Superior, where listings have fallen to record lows in part because nearly 90% of the land in Cook County is public and can't be developed. Most listings along the lake have been fetching multiple offers. During the second half of 2021 there were four sales for well over $1 million, including three that sold for tens of thousands more than the sellers were asking.

"Rising gas prices are a concern of course," said John Willard, a sales agent in the region. "But airline tickets as our competition have really gone up in price, too. And in northern Minnesota, you can bring the whole family, including the dog."

For John Orsucci, the price of filling his tank isn't going to matter all that much. Shortly after the Twin Cities sales executive and his wife, Sherri, bought their three-bedroom house on Lake Vermilion, they decided to make it their full-time home.

The Orsuccis sold their house in Nowthen to their son and became full-time residents of Cook, Minn. They joined a church and are already making new friends.

"It was a heck of a lot of work to make it happen, but it's certainly what we dreamed about," he said. "Everyday I pinch myself. I can breathe deeply and listen to the birds and animals. This really is heaven."