The Time to Sell? Now.
Inventories of residential, commercial, and vacant property is low across the North.
By Ross Boissoneau | May 4, 2019
If you liked 2018, the sequel looks to be even better. Real estate sales will continue to be strong for the rest of this year, according to those in the know. “We’re seeing good activity,” said Michael Cnudde, broker with Coldwell Banker A.L.M. of Manistee. “People are looking — both homeowners looking to upgrade and [those looking for] second homes.”
Indeed, this year’s first quarter sales seem to be taking up where 2017 left off. While last year’s unit totals were down compared to 2017, the figures for 2019 seem to mirror those of two years ago, or even further back. “This year is … almost like 2016, our best year ever,” said Mark Hagan of Coldwell Banker Schmidt Realtors in Traverse City. “At this point in 2016, we did $15 million in sales. In 2017 it was $11 million, and in 2018 it was $8.5 million. This year it’s up to almost $15 million,” said Hagan, who is annually one of the top-selling Realtors in the region.
So what is selling? Almost everything. That includes vacant land and commercial properties. This year’s 232 sales of vacant land in the five-county area served by the Traverse Area Association of Realtors (Grand Traverse, Leelanau, Kalkaska, Benzie and Antrim) is the highest number in the last six years by a wide margin.
Commercial, too, is robust. The strength of the economy is one contributing factor, but another is something altogether new: the legalization of marijuana. Those looking to cash in on the market — and there are many — are leasing or purchasing buildings across the region.
“We have noted an increase in the commercial segment of the market. Some of this is due to the recent changes to the marijuana laws,” said Ethan Swiger, one of the broker/owners of Real Estate One in Petoskey.
On the residential side, the strong sales are driving inventories down. Longtime Realtor Nancy Jacob of Berkshire Hathaway Homeservices in Gaylord said the number of houses for sale is the smallest she’s ever seen.
“I think the secret’s out about Gaylord. Before the market tanked [the Great Recession of 2007 to 2009, which decimated the housing industry], Otsego County would have 360 to 450 active listings. That’s residential, commercial, and vacant. Now it’s 136,” she said. “It’s the lowest I’ve ever seen it.”
Swiger concurred, pointing to similar though less dramatic reductions in the Northern Michigan MLS. He said figures for 2017–2018 showed approximately a 10% drop in the inventory of properties for sale; so far this year, inventory is down about 17 percent.
A decreasing supply and an increasing (or at least steady) demand means property prices continue to escalate. The average residential price in the five-county area for the first quarter of this year, including waterfront and condos, stands at $276,776. That’s more than $23,000 higher than last year’s $253,269, the previous high.
But Realtors warn against pricing properties ridiculously high. “Some are willing to pay top dollar-plus, but people aren’t willing to be silly,” said Jacob. The prevalence of information online allows people to be more aware of pricing on comparable properties. “The internet reveals a lot.”
When it comes to standout segments, three areas seem to be particularly strong. Waterfront homes, whether on inland lakes or Lake Michigan, continue to be at a premium. “Water is always attractive,” said Swiger.
Jacob echoed that thought. “People are looking for lakefront. Those in their 50s edging toward retirement would like to be on water,” she said.
In Town Trumping Out of Town
Another is downtown homes. While small-town downtowns are attractive, that seems to especially be the case for the area’s larger cities. “Anything in town is still hot. I think that’s Traverse City more than outside towns,” said Hagan. “For us, it’s the city limits of Traverse City.”
“We have seen an increase in the downtown market of Petoskey. That seems to be a hot spot,” said Swiger.
Cnudde said he sees clients moving closer to downtown Manistee. “The majority want to be within five to ten miles of the school,” he said. “More seem to want to be in the city.”
The third segment of the market that’s particularly notable is the lower end of the residentialmarket. “Inventory is kind of weak for [homes priced up to] $150,000,” said Cnudde.
“Under $500,000, there are more buyers than sellers. As you go down [in price] the gap gets bigger,” said Hagan.
That all adds up to desirable properties selling quickly. Those looking to buy are best served by purchasing what they really want when they find it. “The good stuff is what’s selling fast,” said Swiger.
That’s true even in those segments where the inventory is strong. “High-end waterfront, you have some choices. But you’d better act quickly,” said Hagan.
And history has shown that as the weather heats up, so too will the market. The hope is that the number of homes for sale will increase as well. “The change of season and weather brings new inventory,” Swiger said.
Note: The above photo features a Walloon Lake Village home whose sale is pending. Listed at $625,000, the home features 4 bedrooms, 5 baths, cathedral ceilings, granite countertops, stainless steel appliances, hardwood floors, a heated garage, and numerous windows that flood the home with natural light.