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Time to snag a lakefront bargain home in Up North Michigan

TRAVERSE CITY -- Home sales and prices are on the rise in parts of northwestern Michigan as baby boomers scoop up second homes and cottages sometimes years before they plan to retire to get today's discounted prices on lakefront property.

Realtors in the area say they've seen heightened activity this year as more buyers are finding the low prices, low interest rates and the scenic area on Lake Michigan too good to pass up.

PHOTOS: Lakefront bargain home values

VIDEOS: Real estate agents on real estate bargains

"What we have is a market in the final stages of coming to reality," said Jack Lane, associate broker for Real Estate One in Traverse City. "There are bargains in every price range, and buyers understand that the bargain bin is almost empty."

After a gradual rise from the housing slump starting in 2010, sales are up 12% in the Traverse City area, for example, for the first four months of the year, and the average sales price is up nearly 22%, to $174,268, according to data from the Michigan Association of Realtors.

Sales of second homes nationwide rose last year to the highest level since 2005, according to the National Association of Realtors. The median vacation home price was $121,300, down 19% from $150,000 in 2010. The typical vacation home buyer was 50 years old.

The Free Press took a tour of some Up North areas to see how the cottage market was faring. Even with sales and prices heading up, there were still some good deals. For example, a seven-bedroom home in East Jordan on Lake Charlevoix listed for $469,000 sold in March for $390,000, a four-bedroom home in Petoskey listed for $325,000 sold for $210,000 in May, and a three-bedroom cottage on the Manistee River in Grayling sold for $160,000 in August and was originally listed for $199,900.

Get in for $200,000

So how much cottage in Michigan can you buy for under $200,000?

That all depends on the location, said Chad Brown, broker/owner of Home Waters Recreational Real Estate. He said lakefront sales in the first quarter were $35 million, nearly double last year.

Still, around-$200,000 buyers could find a nice lakefront cottage on Spider and Arbutus lakes. Also, no-wake lakes and smaller nice lakes properties can be had for less than $200,000, he said. The larger all-sports lakes such as Torch, Elk and Long are still pricier.

"If you could find a small cottage on Torch Lake for $450,000, you would be lucky. Glen Lake or north Lake Leelanau are typically the most expensive, as are Bay Harbor and Charlevoix," Brown said. "The cottages that need a lot of work or are well-maintained, but kind of ugly, those are the best buys."

Brad Rellinger, associate broker for Harbor Sotheby's International Realty in Bay Harbor, said prices are holding steady on tony Walloon Lake, which largely escaped the foreclosure and short-sale epidemic.

The popular lake might have 17 properties for sale in a normal market, but now there are 53 for sale, he said.

"We are seeing a turn in the market and things are starting to sell," Rellinger said. "The prices aren't going to go up a lot until we thin out the product."

The buzz Up North

In the Traverse City area, Lane, who also hosts a local real estate radio show, said it has been the best spring on record for the area that has been gaining national attention for its numerous attractions including freshwater lakes, cherry orchards, wineries, restaurants, festivals, water sports, winter sports, golfing and charming shopping districts.

"This is part move-up market and part high-end retirees coming to the area thanks to all the national press about how cool the area is," he said.

The Pure Michigan ad campaign, Traverse City ranking on National Geographic's list of 10 Best Summer Trips 2012 and "Good Morning America" viewers voting Sleeping Bear Dunes the most beautiful place in America last summer have all spurred home buyer interest.

The average sales price in the Traverse City area hit $182,582 in 2011, still off 15.7% from the 2005 peak of $216,663, according to Michigan Association of Realtors data.

And in the area of Antrim, Charlevoix and Kalkaska, the average sales price of $160,134 is down 40.5% from the 2003 peak of $269,347, but down just 10% from 2010 prices.

In Emmet County, the average home sold for $278,755 last year, up 24% from 2010.

Maureen Penfold, a Realtor with Re/Max Bayshore Properties in Traverse City said that $350,000 would buy a nice summer home on Duck or Green lakes where the minimum price used to be in the $450,000 range.

"On every lake, the prices are down. I just sold a cottage on Lake Leelanau for under $300,000 with 80 feet of frontage," she said. "There are still bargains and there should be for the rest of this season."

Boomers return

Mary Roesner, who grew up in Grand Blanc and spent her summers on Torch Lake, had moved to Texas nine years ago. She met her husband, Timothy Sciba, in Houston and they married two years ago on Torch Lake. She wondered if Sciba, who grew up in Houston and spent 20 years in Denver, would want to live in northern Michigan.

So Roesner let the area sell itself. She took him on the M-22 drive along Lake Michigan. "He just looked at me and said, 'You spoiled brat. You were so lucky to grow up here.' He just fell in love with it."

Roesner's family is in the area and her father lives 11 driveways down from her on the West Arm of the Grand Traverse Bay in Traverse City. She's planning to use the home for summers now with the idea of moving up from Houston in five years after they retire.

The home the couple purchased in April had been on the market for $695,000 when they first looked at it last year. Out of their price range then, they were able to buy it for $525,000 this spring.

The three-bedroom home has an Alden B. Dow style and has multi-layered decks with views of the water. It features 2,429 square feet, has a natural fireplace, hardwood floors, lower level walkout and a guest house with a bedroom, bathroom and sitting room overlooking the bay.

"We are living in our dream lakefront house, absolutely," she said.

Her Realtor, Dee Dee Burch, with Real Estate One in Traverse City, said some properties that have been on the market for two to three years are moving fast now.

"Sellers have gotten more realistic," she said. "There is a lot more demand now that careers have stabilized and a lot more people are moving in from out of state and plan to retire up here."

Barb and Dave Gluszewski left Michigan nine years ago and planned to retire down South. They lived in a golf community in South Carolina to get away from the Michigan winters. Barb, 62, was in automotive sales, and Dave, 69, had retired as a purchasing director for General Motors.

"It seemed like a good idea at the time," Barb said. "But this is home and where our family is."

The couple decided instead to retire closer to their four children. Three live in Michigan and one lives in Indiana. They also have six grandchildren.

"We were finding it was difficult for them to come down," Dave said. "We weren't getting to see them half as much as we wanted."

So they purchased a three-bedroom, 2 1/2 bathroom home in Suttons Bay with 1,906 square feet and an unfinished lower level of the same size. The house sits up on a bluff overlooking the Grand Traverse Bay and features hardwood floors, granite countertops, a large stone fireplace and a large deck with bay views. It was listed for $425,000; they paid $415,000.

Besides more frequent visits from their children, the Gluszewskis chose the area because there's so much to do. Their home is close to town, the wineries, Sleeping Bear Dunes, Interlochen and all the festivals.

"There is something to do all the time, and it is not a town where everyone leaves in the winter," Barb said.

Shawn Schmidt Smith, associate broker with Coldwell Banker Schmidt in Traverse City, said it's a familiar theme -- people who grew up in Michigan and moved away who now want to come back to retire.

She's working with a Target executive who wants vacant lakefront land with plans to hold it for 20 years. And some clients from St. Louis who aren't ready to retire yet but purchased a home in the area and plan to rent it out until then.

"People are starting to realize we are bottomed out and if they want something that is a limited commodity, they'd better start looking at it," Smith said.

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

All Grand Traverse Area Real Estate Listings at www.c21jb.com


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