2016-12-15 / Front Page

Home sales smash records

Inventory of homes squeezed
By Alan Campbell
Of The Enterprise staff

There are records and there are records.

And the housing market in Leelanau County is definitely setting records.

Some time about the third week in October the year-long marks for number of homes sold and monetary volume of sales in the county were surpassed.

And last month those records were shattered. Through November, the volume of home sales in 2016 in the county hit $162.8 million — about 13 percent higher than the previous annual mark of $144.6 million set in 2014.

Apparently there is no end to the housing boom in sight.

“I get the feeling that we have some good times ahead of us,” said John Martin, owner of The Martin Company in Glen Arbor. “A lot of these are second-home buyers.”

However, Martin can point to differences between what’s happening in home sales in 2016 and what occurred ten years ago, which led to a housing bubble and then a collapse.

“This has a little different feel. There are still some real inexpensive properties, for example around Sugar Loaf. There are some values there, more so than before 2008,” he said.

Home prices have been steadily rising in Leelanau County since falling off the map in 2008, according to statistics provided by the Traverse Area Association of Realtors (TAAR).

According to national media coverage, home prices in the USA in September surpassed their previous peak set in July 2006. But Leelanau County’s housing rebound has been well ahead of the national schedule. The median price for homes sold in the county so far in 2016 is $295,000; the figure was $283,750 for the first 11 months of 2015. The previous high water mark for the time period was $279,950 set back in 2005.

Kim Pontius, executive director of TAAR, expects a banner December to move the new home sales records much higher.

“My guess is that we have a lot of people trying to get things closed by the end of the year. We’ll really pass it by the time the final numbers come in,” Pontius said.

While several developments could hamper future home sales, Pontius said the biggest obstacle ahead is being caused by the level of success in the past.

“The lack of inventory is going to impact us,” he said. “We’ve seen the churn rate of existing properties pretty high for the last couple years. These are not like cars that they turn back in every few years when the lease is up.

“There is some concern on the part of my members who are asking, ‘What are we going to have to sell?’”

Dave Stahl’s most pressing problem after accepting the position of Suttons Bay branch manager for Traverse City State Bank earlier this year was finding a place to live. Young — especially by Leelanau County standards — and single, he was accustomed to home prices in Grand Rapids where he worked for Huntington Bank.

“When I was moving up and weighing my options, it was difficult. One, it’s hard to find a long-term rental. Two, it takes time to build a home. And three, the lack of inventory to buy an existing home,” he said.

Working with Realtor Denise Branch, he figures now that luck was on his side while buying a home in Northport Village.

“The day it came on the market, I was the first person to go through it, and I made a full-price offer on the same day. I don’t know what I would have done if I hadn’t done that.”

Stahl estimated that the 1,200 square foot home sold for “30 percent to 40 percent” more than an identical home in Grand Rapids, “which was a little bit of sticker shock. But it was late July, and it was going to sell.”

Now Stahl is working with customers who find themselves in the same predicament.

“It’s hard to be a homeowner in Leelanau County. I feel fortunate to have found my job in Suttons Bay and a home in Northport,” he said.

In normal times building a new home would be an option for people moving to Leelanau. But established contractors have been busy, with the schedules of many full into 2018 and beyond.

“A couple of folks have wanted to build new, and they quickly realized that they had to get in line for that builder as well,” Stahl said. “Maybe they landed that piece of land they wanted, but in reality they are a year or two or three years out, depending upon the builder they choose.”

Martin said some builders from downstate have started to migrate north and into the Leelanau County construction market.

“It’s an opportunity. They are responding to demand. A lot of quality builders are running out of steam. They’ve built a lot of beautiful homes in their career, and I don’t know how many of those a builder has in his lifetime ... I think that’s a good opportunity for young people to make a pretty good living,” he said.

Pontius expects even more change in the local construction market as property owners consider buying pre-constructed homes.

“I think we are going to see people look to alternatives to stick-built construction, particularly in Leelanau County ... the workmanship and quality is pretty amazing, and they can put a home like that up pretty quick,” he said.

Richard Baldwin of Baldwin Homes & Land has been on both sides of the housing equation — selling parcels in the Knorrwood Bluffs subdivision he and his father James split and improved in the 1980s, and as a contractor.

He’s noticed an uptick in both fields. He recently signed a contract to build a new home overlooking south Lake Leelanau in Cleveland Township and has been selling lots in Knorrwood Bluffs. Some 17 lots remain out of the 53 lots platted.

“Suttons Bay was a little, sleeping town when we started. We knew we wouldn’t sell them right away. So we put in the roads and just waited,” he said.

That wait is ending as more people turn to building new homes as opposed to trying to find an existing home from such a low inventory.

“They are coming back and saying, ‘Wow, I would have to remodel that home a lot.’ That’s why I’ve seen more interest in lots. I’m seeing quite a bit more inquiries on vacant land,” Baldwin said.

While his business is booming, he has one regret.

“My clientele is retirees. The problem I’m having is that I would like to build to a different price point on homes, so I could help more families. It costs more to build than to buy, and there isn’t much out there (in existing homes),” Baldwin said.

Added Mark Carlson, manager of the Leland branch for Coldwell Banker Schmidt Realtors, “We always short on inventory and certainly that determines how well we do. You have to have the product.”

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Its' "hard to be a

Its' "hard to be a homeowner", or to become a home owner in Leelanau County?