UP NORTH REAL ESTATE: Cottages for the taking
With for sale signs everywhere, now could be a great time to buy
July 2, 2006
Email this Print this BY AMBER HUNT and RUBY L. BAILEY
FREE PRESS STAFF WRITERS
Owning a cottage Up North has been a dream of generations of Michiganders, but now the dream is in limbo for many and second homes aren't selling like they used to.
Properties in northern Michigan, where vacation homes are the bread and butter of dozens of real estate agencies, are going wanting.
"I've never seen anything like it," said John A. Rowling, who runs his own agency in Lexington. "I'm glad I'm 88, and I'm glad the show's about over."
For buyers, there's a big upside: People who've long wanted to buy their vacation or retirement dream homes only to watch prices climb every year finally have a buyer's market.
"It's not all doom and gloom," said Dennis Stanley, broker and co-owner of Coldwell Banker Pete Stanley & Associates in Au Gres, northeast of Standish.
On Friday, Stanley sold a home that had been on the market 510 days. The 700-square-foot cottage, along 50 feet of sandy Saginaw Bay beach, sold for $190,000 -- 17% less than the original asking price of $229,000.
"Properties are selling," he said. "Sure, not as fast as we'd like, but we have nice properties and our location is wonderful."
Some agents on Michigan's west side say properties are selling well thanks to buyers from out of state and western Michigan, where the economy is stronger. And in places like Hamtramck and Grosse Pointe Park, homes are selling at a faster pace than they were a year ago. There also have been reports of strong home sales in affordable locations like Detroit, Trenton and Wyandotte.
However, throughout metro Detroit, home sales are the worst they've been in three years. Fewer homes were sold between January and March of this year than during the first quarters of 2004 and 2005. In Oakland and Macomb counties, there was a 12.9% drop in home sales and Livingston County had a 24.1% decline. Agents -- especially those in the state's central and eastern areas -- paint a worrisome picture: Houses are on the market months longer than a year ago, and some desperate sellers are cutting prices.
Hank Clabuesch, broker and owner of Scenic Realty based in Caseville in the Thumb, said statistics from nearby Sand Point on Saginaw Bay say it all: Two years ago -- between August '03 and August '04 -- 18 homes sold. Last year, the number rose to 22. But between August 2005 and May -- a nine-month span -- just eight homes have sold.
Clabuesch estimates the 12-month total will be 12 sales.
It's a buyer's market, but agents say Michiganders are having to put their second-home dreams on hold because of downsizing at Delphi, layoffs and buyouts at the automakers and foreign companies choosing to build plants elsewhere.
And for those who can afford a second mortgage at interest rates higher than a year ago, there's another obstacle: the high price of gasoline, which makes a 400-mile round-trip north each weekend more expensive.
"The market in this area is just flooded," said Kay Gonzales, of Town and Country Realty, based in Sanilac County's Lexington.
"We have a lot of people who have purchased vacation homes and now, with the general economy in Michigan and the gas prices, they can't afford them."
Months on the market
As in most parts of Michigan, there is a staggering variety of homes for sale Up North. Some are quaint cottages with beach rights for less than $100,000; others are 4,600-square-foot waterfront monsters with asking prices of more than $1 million.
But many have something in common: They've been on the market for months longer than average.
Take the two-bedroom, 840-square-foot home on Dogwood in Worth Township, about 15 miles north of Port Huron. The house, on nine acres, has been on the market 325 days, said Wynne Achatz, a licensed Realtor since 1978 with Real Estate One Westrick.
The house hit the market last year for the appraised price -- $89,900. The seller recently dropped the price to $74,000, hoping to unload it this summer.
Stanley, of Au Gres' Coldwell Banker agency, said most of his properties, from homes to boat slips, are staying on the market an average of 305 days this year, up from 298 days last year.
Achatz said her homes stay on the market an average of 267 days.
But while most agents agree the numbers are worrisome, some remain optimistic.
Stanley said he sold four houses on Thursday and Friday.
"For a buyer's market, we're doing pretty good," he said.
Said Sharon M. Houston, broker and owner of Re/Max New Horizons in Alpena: "We're holding our own. Really, we're just getting into our second-home market season," she said.
"It's too early to tell how it'll turn out."
Agents hope for boomers
Across the state in Traverse City, Petoskey and Harbor Springs, agents were more upbeat. Some said baby boomers and early retirees might fuel more sales in western Michigan.
According to the Northern Michigan Multiple Listing Service, they're right: Sales in the first quarter of 2006 totaled $102.5 million, compared with $95.6 million during the same span last year.
Also, first-quarter average sale prices this year were up 17% and the number of days properties stayed on the market dipped 16%.
"All these new second-home buyers are entering the market," said Richard Lobenherz, president and owner of Vacation Properties Network, which sells properties in Charlevoix, Harbor Springs and Petoskey.
Baby boomers also are credited with boosting the number of second home sales nationally to four of every 10 residential transactions in 2005, a record high, according to the National Association of Realtors.
Vacation home sales nationwide increased 27% last year to a record 1.2 million, up from 872,000 in 2004.
The median price of a vacation home last year was $204,100, up 7.4% from 2004, the association said.
The missing numbers
But some statistics are misleading. For example, Clabuesch said figures from the Rural Michigan Listing Service show that two years ago, houses in Sand Point stayed on the market for an average of 8.4 months. Last year, that dropped to 7.4 months, while from August '05 to the present the average is eight months.
Also, the average price for a home rose 14% from $240,000 last year to $279,000 this year.
But those figures take into account only the houses that have sold. Homes that stay on the market for months -- sometimes more than a year -- aren't reflected in the averages.
And agents statewide agreed that there are quite a few more homes for sale this year, many of them on the market for 180 days or longer. In the first five months of this year, according to the Northern Michigan Multiple Listing Service, which represents such counties as Charlevoix, Cheboygan, Antrim and Emmet, sales dropped 30% while the number of listings increased 15%.
"It seems like every other house is for sale right now," said Joe Baker, of ERA Houghton Higgins in Houghton Lake.
Broker Stefan Scholl, who sells homes in Petoskey, estimated that 2006 sales are down 20%, while listings have increased that much through May, thanks to the state's struggling economy.
Scholl owns Buyer's Broker of Northern Michigan, representing buyers in Boyne City, Charlevoix, Petoskey, Harbor Springs and Bay Harbor.
"Buyers are extremely scarce," he said. "Listing agents are begging me for offers, literally."
Lake Michigan shoreline a draw
Sellers and agents say there's a reason some chunks of western Michigan might be faring better: The Lake Michigan shoreline tends to draw more people from Illinois and Indiana, where economic news is better.
"We draw from all over the country," said agent Debra Hall of Century 21 in Traverse City. "People are starting to loosen up and feel they can buy that second property."
Janet and Dennis Holmes, who own a home on Tawas Point on Lake Huron, hope that'll translate further east. They've been trying to sell their two-bedroom house -- walking distance from Tawas Bay and Lake Huron -- since September.
They'd planned to retire there when Dennis Holmes accepted an early buyout from Ford Motor Co., but decided instead to buy a winter home in Florida and use a relative's summer house on Torch Lake.
"We have people stopping by, but they look at the price on the flyer and keep on walking," Janet Holmes said last week. The house is advertised for $219,900.
Lori Babcock of Port Austin's Babcock Realty said the numbers in the Thumb's Huron County are definitely down. She said the market is almost exclusively second homes.
From January to June 2005, 158 residences were sold in the county. Between January and June this year, 128 homes have sold.
But even agents in the hardest-hit areas say they're hopeful: Some are looking for early retirees to finally buy their northern Michigan dream home. Others are hoping out-of-staters will see Michigan's buyer's market and hop aboard.
"I just sold a half-million dollar home to a couple from Connecticut," said Clabuesch. The couple is moving there full time.
"Our volume is down, but it seems like we're starting to deal with some out-of-state buyers looking to get more bang for their buck.
"Anybody's who's been looking around here for property in the last five or 10 years, if they're still interested, now's the time to come up here."
With for sale signs everywhere, now could be a great time to buy
July 2, 2006
Email this Print this BY AMBER HUNT and RUBY L. BAILEY
FREE PRESS STAFF WRITERS
Owning a cottage Up North has been a dream of generations of Michiganders, but now the dream is in limbo for many and second homes aren't selling like they used to.
Properties in northern Michigan, where vacation homes are the bread and butter of dozens of real estate agencies, are going wanting.
"I've never seen anything like it," said John A. Rowling, who runs his own agency in Lexington. "I'm glad I'm 88, and I'm glad the show's about over."
For buyers, there's a big upside: People who've long wanted to buy their vacation or retirement dream homes only to watch prices climb every year finally have a buyer's market.
"It's not all doom and gloom," said Dennis Stanley, broker and co-owner of Coldwell Banker Pete Stanley & Associates in Au Gres, northeast of Standish.
On Friday, Stanley sold a home that had been on the market 510 days. The 700-square-foot cottage, along 50 feet of sandy Saginaw Bay beach, sold for $190,000 -- 17% less than the original asking price of $229,000.
"Properties are selling," he said. "Sure, not as fast as we'd like, but we have nice properties and our location is wonderful."
Some agents on Michigan's west side say properties are selling well thanks to buyers from out of state and western Michigan, where the economy is stronger. And in places like Hamtramck and Grosse Pointe Park, homes are selling at a faster pace than they were a year ago. There also have been reports of strong home sales in affordable locations like Detroit, Trenton and Wyandotte.
However, throughout metro Detroit, home sales are the worst they've been in three years. Fewer homes were sold between January and March of this year than during the first quarters of 2004 and 2005. In Oakland and Macomb counties, there was a 12.9% drop in home sales and Livingston County had a 24.1% decline. Agents -- especially those in the state's central and eastern areas -- paint a worrisome picture: Houses are on the market months longer than a year ago, and some desperate sellers are cutting prices.
Hank Clabuesch, broker and owner of Scenic Realty based in Caseville in the Thumb, said statistics from nearby Sand Point on Saginaw Bay say it all: Two years ago -- between August '03 and August '04 -- 18 homes sold. Last year, the number rose to 22. But between August 2005 and May -- a nine-month span -- just eight homes have sold.
Clabuesch estimates the 12-month total will be 12 sales.
It's a buyer's market, but agents say Michiganders are having to put their second-home dreams on hold because of downsizing at Delphi, layoffs and buyouts at the automakers and foreign companies choosing to build plants elsewhere.
And for those who can afford a second mortgage at interest rates higher than a year ago, there's another obstacle: the high price of gasoline, which makes a 400-mile round-trip north each weekend more expensive.
"The market in this area is just flooded," said Kay Gonzales, of Town and Country Realty, based in Sanilac County's Lexington.
"We have a lot of people who have purchased vacation homes and now, with the general economy in Michigan and the gas prices, they can't afford them."
Months on the market
As in most parts of Michigan, there is a staggering variety of homes for sale Up North. Some are quaint cottages with beach rights for less than $100,000; others are 4,600-square-foot waterfront monsters with asking prices of more than $1 million.
But many have something in common: They've been on the market for months longer than average.
Take the two-bedroom, 840-square-foot home on Dogwood in Worth Township, about 15 miles north of Port Huron. The house, on nine acres, has been on the market 325 days, said Wynne Achatz, a licensed Realtor since 1978 with Real Estate One Westrick.
The house hit the market last year for the appraised price -- $89,900. The seller recently dropped the price to $74,000, hoping to unload it this summer.
Stanley, of Au Gres' Coldwell Banker agency, said most of his properties, from homes to boat slips, are staying on the market an average of 305 days this year, up from 298 days last year.
Achatz said her homes stay on the market an average of 267 days.
But while most agents agree the numbers are worrisome, some remain optimistic.
Stanley said he sold four houses on Thursday and Friday.
"For a buyer's market, we're doing pretty good," he said.
Said Sharon M. Houston, broker and owner of Re/Max New Horizons in Alpena: "We're holding our own. Really, we're just getting into our second-home market season," she said.
"It's too early to tell how it'll turn out."
Agents hope for boomers
Across the state in Traverse City, Petoskey and Harbor Springs, agents were more upbeat. Some said baby boomers and early retirees might fuel more sales in western Michigan.
According to the Northern Michigan Multiple Listing Service, they're right: Sales in the first quarter of 2006 totaled $102.5 million, compared with $95.6 million during the same span last year.
Also, first-quarter average sale prices this year were up 17% and the number of days properties stayed on the market dipped 16%.
"All these new second-home buyers are entering the market," said Richard Lobenherz, president and owner of Vacation Properties Network, which sells properties in Charlevoix, Harbor Springs and Petoskey.
Baby boomers also are credited with boosting the number of second home sales nationally to four of every 10 residential transactions in 2005, a record high, according to the National Association of Realtors.
Vacation home sales nationwide increased 27% last year to a record 1.2 million, up from 872,000 in 2004.
The median price of a vacation home last year was $204,100, up 7.4% from 2004, the association said.
The missing numbers
But some statistics are misleading. For example, Clabuesch said figures from the Rural Michigan Listing Service show that two years ago, houses in Sand Point stayed on the market for an average of 8.4 months. Last year, that dropped to 7.4 months, while from August '05 to the present the average is eight months.
Also, the average price for a home rose 14% from $240,000 last year to $279,000 this year.
But those figures take into account only the houses that have sold. Homes that stay on the market for months -- sometimes more than a year -- aren't reflected in the averages.
And agents statewide agreed that there are quite a few more homes for sale this year, many of them on the market for 180 days or longer. In the first five months of this year, according to the Northern Michigan Multiple Listing Service, which represents such counties as Charlevoix, Cheboygan, Antrim and Emmet, sales dropped 30% while the number of listings increased 15%.
"It seems like every other house is for sale right now," said Joe Baker, of ERA Houghton Higgins in Houghton Lake.
Broker Stefan Scholl, who sells homes in Petoskey, estimated that 2006 sales are down 20%, while listings have increased that much through May, thanks to the state's struggling economy.
Scholl owns Buyer's Broker of Northern Michigan, representing buyers in Boyne City, Charlevoix, Petoskey, Harbor Springs and Bay Harbor.
"Buyers are extremely scarce," he said. "Listing agents are begging me for offers, literally."
Lake Michigan shoreline a draw
Sellers and agents say there's a reason some chunks of western Michigan might be faring better: The Lake Michigan shoreline tends to draw more people from Illinois and Indiana, where economic news is better.
"We draw from all over the country," said agent Debra Hall of Century 21 in Traverse City. "People are starting to loosen up and feel they can buy that second property."
Janet and Dennis Holmes, who own a home on Tawas Point on Lake Huron, hope that'll translate further east. They've been trying to sell their two-bedroom house -- walking distance from Tawas Bay and Lake Huron -- since September.
They'd planned to retire there when Dennis Holmes accepted an early buyout from Ford Motor Co., but decided instead to buy a winter home in Florida and use a relative's summer house on Torch Lake.
"We have people stopping by, but they look at the price on the flyer and keep on walking," Janet Holmes said last week. The house is advertised for $219,900.
Lori Babcock of Port Austin's Babcock Realty said the numbers in the Thumb's Huron County are definitely down. She said the market is almost exclusively second homes.
From January to June 2005, 158 residences were sold in the county. Between January and June this year, 128 homes have sold.
But even agents in the hardest-hit areas say they're hopeful: Some are looking for early retirees to finally buy their northern Michigan dream home. Others are hoping out-of-staters will see Michigan's buyer's market and hop aboard.
"I just sold a half-million dollar home to a couple from Connecticut," said Clabuesch. The couple is moving there full time.
"Our volume is down, but it seems like we're starting to deal with some out-of-state buyers looking to get more bang for their buck.
"Anybody's who's been looking around here for property in the last five or 10 years, if they're still interested, now's the time to come up here."
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