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Local Real Estate's Obituary Was Premature

Did the sun shine on the northwest Michigan real estate market this summer? There are some signs that the clouds are parting.

From June 1 to August 30, 2010, the Traverse Area Association of Realtors (TAAR) reports that LeelanauCounty boasted $31.5 million in total dollar volume sales of single-family homes. During that same period in 2009, the county tapped out at $19.8 million. (2008 brought in $28.8, and 2007, $27.4.)

Grand TraverseCounty didn’t make such a leap. Its single family homes during the 2010 summer months rang in with a total dollar volume of $54.3 million, as compared to 2009’s $53.1 million. (2008 was slightly better with $56.7 million, but 2007 was significantly better, with $70.1 million.)

Though Leelanau’s dollar volume boomed from last summer to this one, its total number of homes sold this summer increased only by three: from 68 (in 2009) to 71. The number sold in Grand Traverse actually dropped a smidge – from 302 in 2009 to 294 this summer.

Average home prices rebounded a bit in GrandTraverseCounty. After a steady drop from $211,996 in 2007 to $176,108 in 2009, 2010 reversed the fall with a slight uptick to $184,936.

Leelanau’s average home price, meanwhile, which had bottomed out at $292,563 in 2009, rebounded this summer to an average of $443,701 – just a few thousand less than it’s 2008 summer average, and $100,000+ more than in 2007.

And what about all that time homes are supposedly sitting for sale? The average was 184 days in Leelanau and 197 in Grand Traverse – both more than a month longer than 2007’s averages, when both counties saw homes sit for an average of 139 days or fewer.

A number of realtors say most of the numbers are good news – for buyers anyway. “My members are telling me that selection is at the best they’ve ever seen it, the prices are best they’ve ever seen. And there’s great interest rates right now,” says Kim Pontius, TAAR’s executive vice president.

What kind of buyers? Well, the truth may sting a little: “These are the times the rich get richer, ” says Brad Nichols, Associate Broker & Co-Owner of Remerica-TraverseCity. “Cash is king again. I’ve had, in the past year, probably half a dozen cash sales. It’s unusual, but we’re seeing those buyers, the folks who have the family money or whatever, come out of the woodwork because they know this is the time to take their cash out and make it work for them.”

Hence, a couple hot spots bubbling: waterfront homes –“We’re starting to see more and more activity there,” Pontius says – and the rental market.

“The rental market has come back into play,” says Nichols. “And all the foreclosure properties are boosting that along. Rental property isn’t just a tax write-off anymore. You can turn a profit because the rates and the prices are low.

“But,” he adds, “the key is finding the financing to make it happen. Those that are cash buyers – this is a real candy store right now.”

As for the rest of us? Time will tell. “We’ve had five months of pretty good activity up here, on par with 2006,” says Pontius. “We just have to watch the jobs, watch consumer confidence, and watch the 4th quarter. The housing market is still precarious right now. But if we see steady activity in 4th quarter, that’s promising. If we don’t, we might be seeing a double dip in the economy and the housing market.”

Traverse City & Leelanau area real estate listings

Posted: Tuesday, September 14, 2010 4:25 PM by Jon Becker

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