Michigan’s vacation home market is warming up, with sales across northern Michigan higher than they’ve been in years, according to real estate agents.
More home buyers from downstate and beyond Michigan are purchasing vacation homes. Prices have dropped about 15-20 percent from where they were in 2005, real estate agents say.
But prices are now stable — and inching upward — and buyers are taking advantage and shopping with increased confidence in the economy.
And that’s good news for the communities that depend on summer residents.
Some of the same factors affecting the rest of the housing market — namely, high demand and low inventory — are impacting the second-home market, too.
Many of the transactions are cash sales, as homeowners try to avoid complicated second-home mortgages and steep down payments.
But interest rates remain favorable, and while the market has improved slowly over the past few years, analysts expect even bigger gains this year.
“We’ve seen a broad recovery in vacation home buying,” said Lawrence Yun, chief economist with the National Association of Realtors. “The Michigan market has been rising in both transaction activity and prices.”
The Great Lakes state is mirroring the national trend.
According to 2011 data from the National Association of Realtors — the most recent numbers available — the total number of vacation home sales nationwide increased by 7 percent from 2010 to 2011.
“Last year was a banner year and this year is launching the same way,” said Kim Pontius, executive vice president of the Traverse Area Association of Realtors. “There’s been a lot going on in this market.”
Starting to look and buy
Jeff Dykstra, a real estate agent with North West Realty in Lake County, is seeing the most activity since he joined the company in 2004.
Dykstra said he’s already sold nine vacation homes in what’s typically the slowest selling period of the year — well ahead of the typical two or three sales most agents see in the year’s first quarter.
“People are starting to come look more and they’re starting to buy,” he said. “They’ve been sitting back and waiting and we may have finally bottomed out.”
The average vacation home Dykstra sells in Lake County, about 80 miles north of Grand Rapids, is between $80,000 and $90,000, he said.
“Most of the properties are in the lower price range,” he said. “The economy seems to be turning around and all these offers are coming in $15,000 below the asking price.”
The National Association of Realtors said the median vacation home price decreased by 19.1 percent nationwide in 2011 to $121,300, compared with $150,000 in 2010.
Ken Maroney, 49, took advantage of Michigan’s low vacation home deals. Maroney, a Scottsdale, Ariz., resident, has purchased three lakefront vacation homes near Kalkaska in the past few years and leases them year-round.
He said he paid $650,000 for all three.
“I wanted to invest in property and I wanted to get in before things started picking up too much,” he said.
Lakefront interest stronger
A Coldwell Banker associate broker who handled Maroney’s most recent property — a 3,000-square-foot, four-bedroom, two-bathroom house on Manistee Lake that sold for $280,000 — said interest in lakefront vacation homes is “stronger than it has been in the last four years.”
Waterfront properties in Kalkaska County sold for an average of $143,182, Vowels said. She attributes an uptick in sales to consumer confidence.
“I think it’s a safer bet than the stock market or money in the bank,” she said.
Traverse City area hot spot
Kalkaska and other areas near Traverse City are hot spots for sales, according to Pontius, whose Traverse Area Association of Realtors covers Kalkaska, Grand Traverse, Leelanau, Antrim and Benzie counties.
“We have a lot of what people are looking for,” he said. There’s year-round activity: resorts, big cities and rural areas.”
Charlie Carpenter, 52, of Birmingham, bought a 1,800-square-foot beach house on Lake Michigan last year.
“Prices were down dramatically,” he said. “Finance rates were really attractive as well.”
Carpenter chose the area because of his family’s affinity for sports like hiking, biking and kayaking.
“The region has a lot of things happening,” Pontius said.
By Michael Martinez
The Detroit News
From The Detroit News: http://www.detroitnews.com/article/20130309/BIZ/303090363#ixzz2N48Q51Y4