Housing inventories in five counties in northwest Michigan have risen 68.5% in the past year and have nearly doubled over the past two years.
There was a 35-month supply of single-family homes on the market at the end of May in Benzie, Kalkaska, Grand Traverse, Antrim and Leelanau counties at the current sales pace, according to Real Estate One research. Normal inventory is considered a three- to six-month supply.
And the number of properties closing at the end of May compared with a year ago was down by 40%.
More revealing is that while the median price of homes listed on the market in the counties has risen by 1% to $199,900 in the past year, the median price of those closing fell by 8.3% to $154,900 since May 2007, indicating sellers are accepting price reductions to sell.
Slashing prices
Joel Ashton, 40, a Plymouth lawyer, has owned a home on Crystal Lake in Beulah for three years. He and his wife, Gail, decided to sell it this year as their children’s soccer practices and music lessons meant less time to go up to the cottage.
The Ashtons listed their three-bedroom, one-bath house at $569,000 in January and then slashed the price by $59,000 to $510,000 just before Memorial Day weekend to spur a sale.
“There have been people going through, but we haven’t had a whole lot of feedback,” Ashton said. “We were looking to adjust it around to what we saw other properties listing at. We wanted to be in a good spot.”
The house is a half-mile from Sleeping Bear Dunes and is a year-round home, Ashton said. The house has 1,633 square feet and 100 feet of lake frontage on private Crystal Lake. The boat hoist and dock are included.
Ken Schmidt, chief executive officer of Coldwell Banker Schmidt Realtors in Traverse City, said the area has seen its inventory start to level off this spring. And homes in the $1 million and up range are selling faster than they did two years ago.
The company sold 25 homes in 2005 that were priced at $1 million or more. This year, it has sold 22 so far and expects to sell up to 50 by the end of the year.
“People who have a substantial amount of money are still in the marketplace,” Schmidt said. “We are dealing with some people from out of state and they are not affected by the Michigan economy.”
Listings level off
Listings in the five-county area have leveled off since last August, Schmidt said. There were 5,451 houses on the market in August 2007. By the end of May, that fell to 5,059. In August 2005, 4,684 homes were on the market.
Schmidt estimates that prices on homes on the prime lakes of Glen, Torch, Mullet, Walloon and Elk have come down about 10% from their 2005 peak.
“Northwest Michigan from Leelanau and Grand Traverse up to Charlevoix is pretty consistent in keeping its value,” Schmidt said. “But it’s absolutely a buyer’s market through the area. I think we are in for another tough year, but it is improving.”
Charlotte Arnold, a Realtor with Re/Max of Charlevoix, said the buyer’s market means people can get on the water for less. But they can’t do it for 50 cents on the dollar.
“Some people are coming into the market expecting to find a $1-million home they can get for $500,000. That’s not going to happen,” Arnold said.
But they can still get a deal on homes in that range. Arnold has a listing with 160 feet of Lake Michigan frontage for sale in Kewadin. It was once listed at more than $1 million and now is priced at $849,000 after three years on the market.
“It has a sugar sand beach for miles, thick woods and every home in that neighborhood is worth $1 million plus,” she said. “We’ve really reduced it to a price to create some interest. The land alone is probably worth that.”
The property has a three-bedroom, three-bath home with 3,254 square feet that sits on 5 acres.
“The buzz going around is people are starting to think prices are looking interesting and this isn’t going to last,” Arnold said.
Contact GRETA GUEST at 313-223-4192 or gguest@freepress.com.