TC real estate: Alive and (relatively) well
Forget the doom and gloom national headlines, the real estate market in Traverse City is alive and holding its own, thank you very much.
OK, maybe an asterisk or two are required here. As the chart indicates, sales are down slightly within the region and they vary considerably by the county.
Even the variations are deceiving, as long-time Suttons Bay realtor Cory Beuerle of Century 21 McCoy Real Estate is quick to point out. "This is the worst real estate market I've seen in more than 20 years," notes Beuerle. "No one I work with has seen anything like it. I have friends calling me from other brokers and they talk about the empty cubicles in their offices, as more and more sales people are forced from the business."
The upturn in Leelanau County's sales this year reflect a few large sales in second homes earlier in the year, according to Beuerle. Generally, "nothing on the lake is selling right now," she says, "although we're hopeful for an active fall."
So, where does Beuerle see a healthy market? Around downtown Traverse City. "I've had friends and clients with beautiful homes on Old Mission and Leelanau peninsulas sell in the past few years, so they can be downtown, closer to the people and activities they enjoy."
Traverse Area Association of Realtors (TAAR) Executive Vice President Kim Pontius agrees that demand for in-town Traverse City homes has contributed greatly to the relative stability of the region's real estate market. "Compared to the rest of Michigan," notes Pontius, "we're in pretty good shape."
According to Pontius, a lot of this year's sales within the city are probably due to existing area homeowners taking advantage of lower prices to upgrade their current living arrangements.
Demographically, there are two groups driving the real estate market in Traverse City. "We've got baby boomers retiring up here from downstate, Chicago and other cities in the Midwest. Many have vacationed in the area and appreciate what it has to offer," notes Pontius. Although people have been retiring to northern Michigan for some time, the rising cost of gas and the growing attractions and activities within the city have focused the migration closer to downtown.
A second group interested in living within the city is the growing number of GenX and GenY workers recruited by some of the area's more progressive employers. These newer workers have different goals than past generations, notes Pontius, who, after leaving the tool and die industry worked at an Indiana community college and knows this market well. "This is a group looking for an urban landscape where they can be close to their friends and the things they want to do. They're willing to sacrifice a second car, ride a bike to work and pay higher city taxes to support this lifestyle."
Pontius is concerned that in the future there may not be the kind of housing alternatives, such as urban lofts, that have fueled downtown growth among younger workers in cities such as Grand Rapids. He also worries about the differential in taxes between Traverse City and its rural neighbors and how that may slow growth within the city.
Brad Nichols owner/broker of Remerica Real Estate, thinks affordability rather than style could be the largest problem for young buyers. "It's the lack of affordable raw land within 15-20 miles of downtown that's making it difficult for developers of lower cost housing," says Nichols.
For those who can find such lots, the demand is excellent even in Michigan's down market. Bob Rieck of Exit Realtors points to a new, moderately-priced, 18-unit condo development scheduled to be built on State Street. "Seven sold before any dirt was turned," Rieck reports.
What makes this demand even more remarkable is that financing requirements have tightened for both buyers and builders in recent months. "For those who qualify though, it's a buyers' market," says Nichols. Among existing homes, he sees the younger buyers gravitating toward good, upgraded detached homes built in the 1930s an '40s. "Something with charm and character."
Nichols is bullish on the local real estate market and notes that his business is expanding. Remerica Traverse City just dedicated a new office on Garfield in Traverse City on Sept. 24. "We have a strong spirit of community here. We have good schools, an area that's attractive to retirees and still have solid financial institutions interested in investing in the community." Jobs remain an issue, he said, but notes we're a lot better off than other areas in Michigan. Kim Pontius agrees. He sees no quick fixes in the national and state real estate crisis. But thanks to a vibrant Traverse City and diverse local economy, this area seems to be well poised to ride out the storm. BN