Residential Real Estate
The real estate market in the greater Grand Traverse area continues to show strength overall, especially considering what the state of Michigan has gone through in the last six years. I'm fortunate enough to have a job that involves supporting full-time Realtors and their careers on a daily basis, which helps me provide insight on "what's really going on out there."
So, what is really going on? The full-time real estate agents in the five-county region that typically represent more than 80 percent of the transactions in any given year are busy! And I mean "having-a-hard-time-scheduling-a-day-off-this-month" kind of busy. Our buyer's pool is very strong, and well-priced listings under $200K do not last long before going under contract. Buyers typically need to "miss out" on a home they liked before realizing what's really going on within our market.
2011 did represent some stabilization in our market with quantifiable numbers to prove so: We saw an 18 percent increase in sales in the $300-$400K range; a 54 percent increase in the $400-500K range and a 50 percent increase in the luxury market (over $1 million). While this sounds exciting, keep in mind those sales represent a very small percentage of our closings.
One piece of our market we continually try and study is the second home market. Yes, we are still selling second homes and while it is difficult to generalize this subject, people do seem to be spending less on second homes than they did some 10 years ago. Right now, the destination seems to be as important as anything. People want a place to stay and use when in the Traverse City area; the emphasis seems to be more on the area instead of the house. Having said that, we are still seeing an influx of people from Texas (how couldn't you fall in love with our summers and availability of water?), California, Chicago, St. Louis and the international buyer.
One key piece regarding the future of our market is the changes we're seeing demographically. Five years ago it was all about the Baby Boomers, and this is still a very important piece of our real estate market. But what isn't being talked about is the young adult born between 1980 and the mid 1990s. These people are gravitating to the greater Grand Traverse area in droves. Think about it: their motivations are geared toward: "Where do I want to live and play?" Once that piece of the equation is figured out, employment comes into play: "Once I figure out where I want to live, it is time to find a job… or create one."
I think this multi-generational shift will not only provide an overall stimulant to our local economy, but also prove to be very relevant in the strengthening of our real estate market. Also, this demographic wants to live in more of an urban setting – downtown – providing more of a community feel. Don't underestimate the importance of this key demographic in the next 10 years.
Our market still faces challenges, and most Realtors would agree that every deal does face a hurdle or two before closing. Vacant land continues to be the slowest segment of our market and will probably continue to be this way at least for a few years. The indicator that has us excited is single-family homes; the number of homes sold in 2011 was almost the same as 2006.
So, let's see here… we have historically all-time low interest rates, median sales price increased last year 3.3 percent in the five-county area, sales volume was up 6.9 percent in the five-county area compared to 2009 and our listing inventory was DOWN 30 percent at the end of last year, compared to 24 months prior.
Will this be the time everyone talks about as, "I wish I would have bought in 2012 or 2013…back when pricing was down and money was cheap?" Do keep in mind: If mainstream media is beating that drum, it has already happened.
Brad Platt is the co-owner of Century 21 Northland and Century 21 Sleeping Bear and works as a full-time Realtor coach for his team. The company just celebrated its sixth year.By Brad Platt