Detroit Free Press
The coronavirus crisis and its related recession have yet to cool Michigan’s Up North vacation home market, which real estate agents say is seeing strong interest from prospective buyers and sale prices up as much as 10% from a year ago in some areas.
It’s become a red-hot market this summer, and not just despite COVID-19, but perhaps because of it.
A number of recent buyers had been thinking of purchasing a vacation or second home property, and while cooped up during this spring’s pandemic lockdowns, decided to go forward with it as soon as restrictions eased, agents say.
These buyers seem to be minimally affected by the virus-induced recession — at least so far.
“A lot of people I think just did soul searching, and decided to move their life plans up and make it work,” said Realtor Dee-Dee Burch with Real Estate One in Traverse City, where the market has been busier since mid-May than she can ever recall.
Other buyers realized during the pandemic that they could perform more remote work for their job, giving them more time to spend at a second home. Still others decided that they simply want to enjoy their retirement years Up North.
The high water levels this year on the Great Lakes and inland lakes haven’t had much of a negative effect on vacation home sales and pricing, agents say.
More:Record-high Michigan water levels are a nightmare for homeowners, state
“People are thinking, ‘Hey, if we can buy a place and work from home with our phone and computer, what the heck. It‘s a better lifestyle up here and we can worry less,’ ” said Pat O’Brien of Pat O’Brien and Associates, who specializes in Lake Charlevoix properties.
This resilience in demand and prices is a striking contrast to what happened during last decade’s recession, when properties in some Up North destinations lost roughly 30% of their value and sold at considerable discounts for years.
The current dynamics also apply to some vacation hot spots in southwest Michigan such a Saugatuck, as well as in the Thumb.
“There are more people who are looking to relocate and buy cottages than we’ve seen in a long time,” said Casey Bruce, associate broker/owner with Osentoski Realty Co. in the Thumb. “I have one gentleman who bought a place who had three vacations canceled this year, so he said ‘I want a cottage.’ ”
Prices up in Gaylord
In the Gaylord area, demand is very strong and supply is very tight, and sale prices for some lakefront houses are up 10% to as much as 15% from a year ago, according to Mike Perdue, a broker/owner with the Smith Realty Group.
A typical cottage or second home is now going for about $180,000 to $300,000.
“One thing we’re seeing go quick is any type of cottage or home that is modernized, or has a nice touch and updates to it,” he said. “Those are going very quickly, at or above asking price.”
Perdue said some recent buyers plan to start using their new house for vacations, and later treat it as more of a permanent residence once they retire.
Donna and Don Theisen were astonished by the competition they encountered this spring for lakefront houses in Gaylord.
The retired couple once owned a cottage in the area, but sold it several years ago to be closer to family in Ann Arbor. Yet they discovered they missed Up North and decided to return.
When hunting for properties, they had their eyes set on a house on Otsego Lake in Gaylord. The made a strong offer, but it wasn’t enough. The house sold to someone else for about $475,000.
“We offered over asking price — cash — and we were outbid,” Donna Theisen said. “It surprised me very much … and the price was hefty for that house, too.”
The Theisens, working with an agent from Berkshire Hathaway Home Services, eventually found a four-bedroom log home on nearby O’Rourke Lake that they liked, and the seller accepted their offer.
“When something comes up, at least this year, you’d better jump on it,” Donna Theisen said.
Prices strong in Charlevoix
In the Charlevoix area, demand is strong and prices are up 5% to 10% from a year ago, “and we may even move that needle a little more by the end of the year,” said Rik Lobenherz, a broker/owner of Berkshire Hathaway HomeServices in Charlevoix.
Several recent buyers said they had been considering getting a vacation home within the next three to five years or so, but the pandemic and the lockdowns moved up their timelines.
“The common phrase is ‘pull the trigger’ on what our plans have been,” Lobenherz said. “Some of them are still working, but they feel they can work from anywhere. And so we’re extremely busy in certain segments of the market and getting multiple offers on our properties.”
He added: “We haven’t seen that in a long time, frankly.”
Agents have observed the same trends in the Petoskey area, where prices also are up roughly 5% to 10% from last summer.
“If they were thinking of buying now and just using it as a vacation home, now they’re maybe moving that forward and using it as a permanent home sooner than they expected,” said David Shuman, principal broker with Bay North Realty in Petoskey.
The pandemic even prompted a few people to buy cottages or property on isolated Beaver Island in Lake Michigan, which is about 27 miles northwest of Charlevoix and accessible only by ferry or airplane. Prices for houses on the island generally start at about $140,000.
“What we’re seeing is people wanting to get out of the more populated areas and into more sparsely populated areas,” Lobenherz said. “We have an office on Beaver Island and we’re getting calls from people all over the country who’ve never been there before wanting information — ‘Tell us about this Beaver Island.’”