View from the Top: Northern Michigan’s big realtors tell us what’s selling big
"We've hit bottom."
"I think we're due for a turnaround."
"I'm cautiously optimistic."
Different words, perhaps, but most of the professionals in the real estate business are suggesting something akin to former President Herbert Hoover's utterance nearly a century ago: "Prosperity is just around the corner."
Of course, what was around Hoover's corner was the Great Depression. But take heart: a depression after the recession seems unlikely these days. The indicators in the general economy and, specifically, in the housing market suggest that things are likely to get better, albeit very slowly.
That feeling is shared both locally and nationally. Kim Pontius, executive vice president of the Traverse Area Association of Realtors (TAAR), says the past five months of growth is a promising indicator, but that growth is slow. "We're in a recovery. A slow recovery," he says. "The consumer confidence index is not as active as we'd like it to be."
January through June, a total of 983 single family homes were sold in 2010, compared with 807 for the same period 2009. Volume for 2010 was $166,357,398, compared with $128,977,411 for 2009. Likewise the median home price increased to $127,000 this year from $120,000 in 2009.
For the month of June alone, the statistics are similar. June 2011 showed sales of 209 units, compared with 182 in June 2009. Volume jumped to $41,846,681 this year from $34,414,534 last year, and median price increased to $155,000 from $139,370 a year ago.
Matt Dakoske, current president of TAAR, says part of the reason for the increase is the tax credit, which ran through April 30.
"The sales are the best since 2006, but the federal money skewed the results," he says.
Jim Gillespie, national CEO of Coldwell Banker Corporation, says that some of his company's affiliates are doing very well in the current economy. "Our average sale price is 15 percent higher than the National Association of Realtors (NAR) average," he says. "In the northeast, things are better, but in Michigan right now it's tough."
Gillespie actually owns a cottage in southern Michigan, so he is perhaps even more tuned in to this state's economy than most in his position would be.
"The things I'm hoping will happen – and that the National Association of Realtors says will – is that things are off until the fourth quarter. Like the Cash for Clunkers program, sales fell of the table (when the program ended). Then there was a gradual recovery. Automobile sales are better now than they were the previous year. So I am hopeful that what NAR says is true, based on how car sales rebounded."
Beyond this year, Gillespie remains bullish on real estate. "A lot of studies, like the Brookings Institute, looked at 2030 and said we'll need 60 million new residential units. Right now the imbalance is in the wrong direction, but long term, the imbalance is inverted." BN