Housing Inventory Shrinks: Five-county market continues to rebound
REGION – The number of homes sold in the five-county Traverse City region rose for the fourth straight year in 2011.
According to data from the Traverse Area Association of Realtors, 2,145 residential units sold last year, compared to 2,045 in 2010, 2005 in 2009 and 1,811 in 2008.
"There's been very consistent, very steady, slow growth in the market," says Kim Pontius, executive vice president of TAAR. "I get the sense that the market is kind of where it should be."
Pontius is encouraged, in part, by the fact that 1,278 (about 60 percent) of the homes sold were priced at less than $160,000, making them affordable for many families. The median selling price was $134,000, down from $137,500 last year.
"That's a lot of homes that were sold for less than the national median price of $167,000," he notes. "That tells me there's lots of room for entry-level buyers. Sellers have finally understood that if they want to sell their property, they have to come down in prices. And buyers have realized that they just can't go in and knock down a price much any more."
The inventory of homes on the market in Antrim, Benzie, Grand Traverse, Kalkaska and Leelanau continues to shrink, according to Pontius, from over 5,000 to about 3,000.
The five-county market is continuing to rebound, according to realtor Michael Schmidt of Coldwell Banker Schmidt, whose sales rose about 10 percent compared to 2010. That put the firm over $1 billion in sales for the first time since 2007.
"We definitely had our best year ever selling upper-tier homes that are typically situated on the water and we expect a very good year in 2012 for that product type, as well as the broader market," says Schmidt. "We have officially called that the market has shifted to a positive manner and will likely to continue to do so for the next decade."
Dennis Pearsall, president & COO of Real Estate One's northwest Michigan division, says his seven offices in TAAR also had a strong year, with unit sales increasing 12.2 percent over last year.
"Our dollar volume sales increased 18.8 percent," he adds. "Why? We have a very strong group of agents, and our marketing products, services, support and internet presence have been highly effective."
Pearsall also sees some upticks:
"The unit sales for $100K-$150K, $250K-$299K and $300K-$399K have been on the upswing the last four straight years," he says. "The $400K-$600K have been on the rise for the last three years. The number of higher-end properties (over $600K) that have sold have been trending flat to down slightly, with the exception of 2010, which was up.
"As I look at our different offices/locations – Traverse City, Beulah & Frankfort, Empire, Bellaire and Elk Rapids (under our 45th Parallel brand) – we saw increased dollar production from 12 percent to 40 percent."
Realtor Andrea Galloup of Century 21 Northland saw her sales volume surpass $9 million in 2011. That included 38 residential transactions and represents a 40 percent increase over her 2010 sales volume.
"This increase is due to several factors," she explains. "On a personal level, over 82 percent of my business came from referrals last year, so the more volume I do, the more referrals I am receiving, and the more my business grows…Pricing homes to reflect the market conditions and helping my sellers stage their homes to present them in top showing condition are important factors in getting homes sold in this market. "
Galloup saw a 26 percent increase in sales in Benzie County compared with 2010 and a 14 percent increase in sales in Antrim County. Grand Traverse County continues to make up more than 50 percent of the sales in the region. Within GT County, two hot spots continue to be the base of Old Mission Peninsula and within the city limits of Traverse City.
Galloup's sale prices ranged from $89,000 to $590,000 and included homes with acreage, homes in typical subdivisions, waterfront homes, condos, in-town homes, and vacant land.
So, what's on the horizon?
According to Schmidt, 2011 was strong because inventories are down, demand continues to be strong and financing is at all-time lows. With inventories continuing to creep down, and above-average demand continuing, Schmidt foresees another uptick in prices.
Pearsall echoes that sentiment.
"With 2012 being an election year, you can be pretty sure things will show improvement," he says. "Historically, that's almost always the case, at least in real estate.
"With interest rates almost assured to remain low, i.e. no higher than plus or minus 4.5 percent, inventories remaining stable and maybe less foreclosures in our market (which has been lower than much of the state), we should continue to see improvement in unit and dollar sales in 2012."
Galloup is cautiously optimistic.
"I've lived in the Traverse City area for over 41 years, so I know first-hand what a wonderful place it is to live, work, and recreate," she says. "In the past 10 years, we've seen an incredible amount of positive national recognition and admiration for our area. I believe our popularity and desirability will continue to grow. "
And the real estate market will continue to improve as long as our job market continues to grow.
"Michigan leads the nation in terms of homeownership at 70 percent," she says. "It's the mindset of Michigan residents to be home buyers and home owners. With a predisposition to home ownership, a stronger job market, rising median sales prices, and continued low mortgage interest rates, I believe we have already hit the bottom of the real estate market and are making slow and steady improvements."
"I predict we will see a continued increase in the number of home sales in our area of at least 5 percent and that our median sales price will rise by 2-3 percent," she says. "I believe we'll see an increase in waterfront sales as consumers realize that median sales prices are starting to rise and that waterfront prices are as low as they're ever going to be. So much depends on consumer confidence, and with history suggesting that consumer confidence typically rises during an election year, I'm looking forward to another successful real estate year." BN