Waterfront Dreams? Possible but still pricey
Summertime, and the lakefront living is easy. Well, if not easy, at least possible, as there are homes and cottages for sale on the water throughout the region. Whether you dream of a dock and a kayak on a small no-wake lake, zipping about on your jet ski on an all-sports lake, or just taking in the view across Lake Michigan, your slice of heaven awaits. But once again, it will likely cost you a pretty penny.
Waterfront home values were among the hardest hit by the recession. Pre-recession prices of a million dollars in the early 2000s were lucky to command two-thirds of that by 2010. Those at half a million or under saw a loss in value of $100,000 to $200,000. Lots simply stood vacant: The cost of the property plus that of building a new home was more than the market could bear.
That was then, and this is now: Sales are up, and so are prices. Homes are even popping up on those formerly empty waterfront parcels. No, it’s not what it was a decade and a half ago, but some segments are particularly strong.
One always hears that real estate hinges on location, location, location. The most desirable location will often trump the so-called law of supply and demand. For example, while Torch Lake boasts 42 properties for sale, Arbutus Lake, located in East Bay Township in central Grand Traverse County, has only three. But while prices for the latter range from $129,900 to $425,000 on Torch Lake, only one home is priced below half a million dollars, and just barely at $494,900. Top price is $4,699,000. The median price is actually $785,000. (Note: For our purposes, only properties with homes already built on them were considered.)
The same holds true elsewhere. The next-largest number of waterfront homes for sale are on the waters of Grand Traverse Bay. Among the 27 homes listed on the TAAR website as of press time, the lowest price was $309,000; top price was $2,500,000, with a median of $685,000.
Compare that with Crystal Lake in Benzie County. Long considered one of the area’s best all-sports lakes, it only has four properties listed, ranging from $299,900 to a property with two cottages on it listed for sale at $425,000. Glen Lake had 11 homes listed for sale, from $374,900 to $995,000, with a median of $850,000. Lake Leelanau prices ranged from $349,000 to $1,750,000 for its 14 properties, the bulk of which were listed for $500,000-$600,000.
George Watkins is a Realtor with Berkshire Hathaway in Eastport. He is familiar with area waterfront property and represents several properties on Lake Michigan and Torch Lake. “The best values now are on the bay,” he said. One caveat: Watkins noted he and his office deal mostly with the section of East Grand Traverse Bay from Elk Rapids north. “The inland lakes have rebounded at a much faster pace. Torch, for instance, is 80 to 85 percent back to its (pre-recession) levels. We believe the bay has not come back. In the last year it is actually down.”
Watkins said he believes one reason for prices on inland lakes coming back more quickly than for properties on Grand Traverse Bay has to do with the latter’s water level. During the early 2000s, as the waters receded on the bay, plants moved in, leaving former beaches looking more like soggy meadows. While the water level has largely rebounded, he isn’t sure that message has resounded in buyers’ minds.
Some may simply put a per-foot value on the amount of lake frontage and then add the value of the home to that. Mark Fisher, the sales manager at Coldwell Banker Schmidt Realtors in Glen Arbor, believes that approach is short-sighted.
“The width (of the property) is important. So is depth. Tree cover, the lake bottom, the soil.” All those factors along with the size, style and quality of the home impact the price and the desirability, which may not always match.
Fisher said he believes the recession’s long-term impact is still having a negative effect on the market. “There are two different markets,” Fisher continued. “A second home is discretionary. We lost a lot of middle-class buyers.” By that, he means that second-home lakeshore properties that are on the lower end, between $250,00 and $500,000 or thereabouts.
On the other hand, high-end buyers are still engaged and thus high-end properties are once again selling at a rate similar to the early 2000s. “On Glen Lake, Sleeping Bear Bay, if it’s grade A they sell,” he said.