State of the Waterfront Property Market - Part 2

Part 2 of 2

Hello Ask the Realtors blog readers,

To quantify our discussion, look at the table below (click the chart to view it larger):

As you can see, much like the overall Grand Traverse area real estate market, and depending on which body of water we are discussing, there is still anywhere from three to seven yearsí worth of waterfront real estate inventory for sale. There have been more than 500 properties listed so far in 2007, just on these bodies of water ñ- only 94 have SOLD as of this writing.

There is also a wide variety of difference between asking prices and sale prices, with the average Torch Lake property selling for 94 percent of the asking price so far this year, while the average Glen Lake property sold for only 66 percent of the asking price. (Be careful how much you read into this data, which is not all-encompassing. Before you purchase waterfront property in Northern Michigan, be sure to contact the first two top Realtors that come to mind.)

But look at the average sale prices ñ- between $400,000 and $750,000! Twenty years ago, $250,000 would have purchased the biggest, best beachfront home anywhere in Northern Michigan. While there may be years of inventory currently available, the value of those properties has steadily increased for decades. We may be seeing a temporary cooling in equity gain, but there will not be any significant increase in supply forever. That will drive values ever upward over time.

There are really two separate lobes to the Grand Traverse area real estate market: high-end, primarily waterfront property, and all of the rest. There are important differences between them, but the Seven Significant Factors affecting local real estate apply to both lobes. The differences lay in degree.

Most of the people paying a half-million dollars or more for Michigan waterfront property are not using them as a primary residence. They are less affected by the vacillations of the local and state economies, and their purchases of real estate are relatively less affected by the state of the market. While prices have moderated in the last few years, there has been very little equity loss for property on the great and inland lakes in the Grand Traverse area.

Finally, we have seen very little adverse effect from the road-end docking legislation to date, but weíll keep you all posted (look for our ìReal Estate-related Case Lawî blog coming soon).

Susan from Wisconsin, we hope this answers your questions about waterfront property in the Grand Traverse area. For the rest of our readers, we hope you find this as interesting and intriguing as we do. If you are still reading this far down the blog, we can probably rest easy.

Donít forget to post your questions as a comment below or send them to TEAM MIKE at MikeGaines@C21Northland.com or Mike.Annelin@C21Northland.com, because we have not even scratched the surface yet!

Hope you are enjoying Autumnís Splendor,

TEAM MIKE



Last Updated: October 28, 2007