NW Michigan real estate: price reductions should spur market
As news of a rapidly-deteriorating national housing market continues to sweep across the country, northwest Michigan real estate agents remain hopeful and say our region is generally in better shape compared to others.
"Southeast Michigan is really suffering, but we've kind of got the best of what is going on in the state. We're holding our own," said Matt Case, a Benzie County-based Coldwell Banker Schmidt agent and president-elect of the Traverse Area Association of Realtors. "People still want to be here and still want to move here."
This is not to say, of course, that the region hasn't faced -and won't continue to face-its share of housing market challenges. The housing inventory, or number of single-family homes for sale, remains high.
In Grand Traverse County, mid-year single-family home statistics suggest that there were enough non-waterfront homes in the $200,000 to $249,900 range to satisfy market demand for two years, says Real Estate One Realtor Andrea Galloup. Enough homes were listed in the $300,000-plus range to satisfy market demand for three years, she added.
"It's going to take time to get rid of this inventory," agreed Mike Street, a Realtor with Coldwell Banker Schmidt in Traverse City.
Even the region's "bread and butter" homes – those listed in the $120,000 to $160,000 range – aren't selling as quickly as in past years. Realtor Sam Abood cited two of his properties – a $159,000 ranch near the Grand Traverse Mall and a similarly-priced home near Northwestern Michigan College -that remain on the market despite their attractive prices, locations and conditions.
"It's just a direct reflection on the marketplace," said Abood, of Coldwell Banker Schmidt in Traverse City. "I still think we have a ways to go before we really see a turnaround."
Even so, some realtors here say the market is set to make a turn for the better.
"I think we have hit rock bottom, but there's only one way to go-back up," said Andy Stireman, of Coldwell Banker Schmidt in Traverse City.
Some in the industry are encouraged by price reductions taking place, which they say should spur the market.
"I have seen since June an increase in activity that I think is more than just a seasonal increase," Abood said. "The market continues to adjust. Prices are going down or at the very best stabilizing."
Also encouraging is the average sale price of homes, which is up from $220,000 in 2006 to $229,000 mid-year 2007, Galloup said. In addition, the percentage of homes that ultimately will sell by year's end is expected to remain steady instead of following a recent trend of dropping significantly.
"I'm personally working with a lot of buyers," Galloup said. "The buyers that are out there, while they have been looking all throughout the year, I think are ready to make buying decisions now, especially going into the fall and winter and especially with the slight rise in the interest rates. There seems to be a little more sense of urgency."
"It isn't that buyers are offering low and sellers are taking it, because properties that are priced right-that are priced appropriately and reasonably-are selling," Case said. "It's just making sure you are priced right to start with that is important."
Indeed, Galloup, who specializes in "staging" homes to optimize the ability to attract buyers, said sellers must do more than price their home at a realistic price.
"It's also so very important to prepare your home for sale. It is so competitive out there for a seller," she said. "There are so many homes that are beautifully done and that doesn't mean necessarily they're expensive homes. It's where we see sellers unwilling to put that effort in to make their homes shine that they typically don't get sold." And getting to that closing table is proving to be much harder than it used to be, Case says.
"Every agent I've talked with is working harder to keep deals together. Getting the buyer from offer to acceptance," he said. "We're used to working hard for our money, (but) now it seems if there's a minor issue with inspection, it can throw the whole deal out the window. Little issues for whatever reason become bigger issues, so we're spending more time renegotiating transactions. It means we take better care of buyers, getting them what they need and serving them." BN