First in a series.

The Coffey family of Chicago take a 320-mile drive whenever possible to spend time in their new Traverse City summer home, set amid pine forests and rolling hills filled with cherry trees and grapevines with a stunning view of the turquoise waters on the east arm of Grand Traverse Bay.

“Every time we go up, there’s a new restaurant, a new place to check out,” said Mike Coffey, 38, who has been visiting his wife’s family in the area for 15 years. It took two years to find the right house, but they closed in August on a five-bedroom home once listed at $450,000 — for $290,000.

The face of the Up North real estate buyer is changing as more out-of-state buyers are scooping up deals. The laid-back, water-sports-and-golfing lifestyle continues to attract a strong Michigan and Midwest contingent, Realtors say. And with ample supply and prices off by 30% to 50% from their peaks, they hope Memorial Day weekend starts a strong selling season from Traverse City to Harbor Springs.

Sharon Witucki, a Realtor with Coldwell Banker Schmidt Realtors in Charlevoix, has worked with buyers from Ohio, Chicago, Texas and California in the last year.

“Everyone wants a little slice of heaven up here,” she said.

Home bargains on the upswing Up North

For those who had been waiting for a deal on Up North real estate, prices are inching back up, but bargains can still be found on summer homes.

Todd Kistler, 40, an intensive care nurse at Sinai-Grace Hospital in Detroit, has Up North connections, having lived in the Traverse City area for 20 years. He got an amazing deal on a foreclosure in Thompsonville, near Traverse City, paying $219,000 for a house once listed for $450,000. The 1,932-square-foot home is on 24 acres, and there’s a 14,000-square-foot horse barn that may provide him with a second source of income — rentals for horseback riding lessons.

It has three bedrooms, 2 1/2 bathrooms, hardwood floors, premium cabinetry, a tin ceiling and a wooded lot. Kistler, a divorced father of two, has an apartment in metro Detroit while he’s working. He found the house through an online search in February and closed in April. It had been on the market for two years, and the price kept coming down.

The house also fit into his goals for a location — near Crystal Mountain, the Boardman River and close to where his kids attend school.

“They tried to sell it for two years. It sat, which surprised me,” Kistler said. “My good fortune took the misfortune of somebody else, which is unfortunate. But ultimately, these are the cards that are out there, and I played them and it worked out well for me.”

Up North buyers fired up

Although metro Detroit’s housing market started slumping five years ago, northwest Michigan has been buffered somewhat by its appeal to buyers from other states who summer there. Still, the area saw its share of plunging sales and falling average home sales prices.

Sales are brisker now from Traverse City to Charlevoix, and average sale prices are on the upswing, something unheard of two years ago. Most areas around Traverse City had more than a six-month supply of houses in the fourth quarter, meaning the buyer’s market persists. Prices in many areas of northwest Michigan are still a bargain from the low end to high end, and that’s fired up buyers.

Helping the market is a new crop of buyers from out West, local real estate agents say. Sharon Witucki, a real estate agent with Coldwell Banker Schmidt Realtors in Charlevoix, said that last year turned out to be a strong one for the area thanks to broader buyer interest from states such as Texas and California. The area continues to attract buyers from Ohio and Illinois.

“You can see that, because of the economy in Michigan, people are not buying second homes. We used to get people from middle management in the auto industry buying condos, and that has really stopped in the past two years,” she said.

Patrick Leavy, owner of Kidd Leavy Real Estate in Petoskey, said that during the peak years between 2005 and 2007, roughly 70% of his buyers were from Michigan. Then, as the housing market dipped in subsequent years, only 60% of the buyers were from Michigan.

“Anybody who has the desire to start a lifestyle in northern Michigan normally has Michigan connections, and the home can be reached by car,” Leavy said. “And it’s mainly because when Mom and Dad decide they are going to start memories with their kids, they often go back to where their parents took them. That’s why the Midwest is very strong for us.”

Mike and Tricia Coffey of Chicago decided to buy Up North after years of visiting her family on the Old Mission Peninsula in Traverse City. As they watched home prices fall, they spent two years looking for the right house for summer vacations with their three kids.

The Coffeys, both 38, bought a home last summer and have been visiting frequently since. They paid $290,000 for a five-bedroom home that once sold for $450,000. It features views of the turquoise waters of the east Grand Traverse Bay and has shared lakefront access.

The house needs some updating, and they already removed a fireplace in the main family room that had blocked the view of the lake. They replaced it with a lot of windows to enhance the view. They are also putting in a 1,000-square-foot addition upstairs.

“This was kind of a thing, unfortunately for the owner that the price kept dropping,” said Mike Coffey, managing director for the Nasdaq stock exchange in Chicago. “And honestly, when it did, we jumped on it because we didn’t think it would last that long.”

Investment properties

LeAnn and Pat Eustice bought a cottage to use as an investment property right across the street from their primary home near Lake Leelanau in Traverse City. They paid slightly more than the $99,000 asking price for the 1,400-square-foot cabin after another bidder got involved. But they ended up getting it furnished for $105,000.

It has three bedrooms, two bathrooms and a log post and beam interior with knotty pine paneling throughout. The cottage, which they use as a rental, also has a large covered patio, a two-car detached garage and a cozy, open floor plan.

Pat Eustice, 51, works as a district manager for Mohawk Carpet, and LeAnn Eustice is business manager for Suttons Bay Public Schools. They updated the lighting, electrical and flooring in the rental. Still, it was in far better condition than other homes for sale in that price range, he said. They had their first rental New Year’s weekend and have been going strong ever since.

“We thought we would buy it and it would pay for itself. Real estate is still a good investment,” Pat Eustice said. “It’s been fun working on it. Seeing people come in, generating revenue … that’s even more fun.”

The average sales price in the Traverse City area hit $185,697 in 2010, up 6.6% from 2009 but still off 14% from the 2005 peak of $216,663, according to Michigan Association of Realtors data. And in the area of Antrim, Charlevoix and Kalkaska counties, the average sales price of $179,944 is down 33% from the 2003 peak of $269,347. Yet average prices climbed back last year by nearly 25% from the 2009 low of $144,053.

Not immune from the crisis

Joe Vogelheim, owner of Re/Max in Charlevoix, said that people in the upscale community thought they were immune to the foreclosure crisis, but that isn’t the case. Of 46 waterfront homes now on the market, two are foreclosures. And some owners who have seen their incomes fall are just walking away. That is helping to keep prices depressed somewhat and real estate agents like Vogelheim busy.

“The second-home market and waterfront is probably what keeps Charlevoix so strong. I am busier now. We put eight purchase agreements together today,” he said earlier this month.

Catherine Barris of Real Estate One in Traverse City said she’s been busier, too. Barris primarily handles sales of foreclosed properties. She thinks it’s a good sign that agents are busier without any federal programs to spur home buying this spring.

She said that bank-owned inventory is down to about three months’ supply in Grand Traverse County. That’s in contrast to 28 months of inventory in the owner-occupied and new construction inventory.

“I’d like to say everything is getting better. For a long time there have been a lot of people sitting on the sidelines waiting to buy when we hit the bottom,” she said. “But they are starting to realize the bottom is something we only see in hindsight and with interest rates low, they are thinking now is the time.”

Contact Greta Guest: 313-223-4192 or gguest@freepress.com