Housing market still scorching in the northwest region | News
TRAVERSE CITY – The scenic coastlines, serene forests, and numerous tourist attractions are just some of the reasons visitors flock to northwest Michigan each year.
Traverse City alone draws around 3.5 million visitors, which translates into around $ 1 billion in direct annual spending, according to the city’s tourism bureau.
However, during the pandemic, people’s vacations become vacation homes or places to change clothes. The regional real estate market is becoming increasingly dense. Many people buy real estate as quickly as real estate agents can sell it.
“People say, well, what’s the market like?” Said Pat O’Brien, a Boyne City real estate agent. “My answer is, it’s very quick. It’s very fast.”
O’Brien’s real estate business specializes in properties around Lake Charlevoix. For the past few months, he has said it is normal for homes to be sold the week they go on sale – if they even make it there.
As the demand for housing grows, property values continue to reach for the heavens. O’Brien said life was likely to be to blame for the pandemic.
“There have been many companies that have allowed their employees to work from home,” said O’Brien. I think that was a big part of the push. “Well, if we can do this, why don’t we go upstairs and do it somewhere we really love the area?” ie Northern Michigan. “
While imprisoned at home, you may have asked yourself, “Do I really want to live here? Do I feel good here? Maybe I could use a bigger bathroom? “
These are the questions the dodsons had to ask. They had always dreamed of living in Traverse City, but counterintuitively, the opportunity never presented itself – until they lost their job due to COVID shutdowns.
Andrew Dodson said he didn’t know how lucky they were.
He and his wife had a contract for a new townhouse north of Denver when they lost their jobs. Andrew said they took it as a sign to live more “consciously” in a place that makes them happy.
They managed to secure a home near downtown Traverse City before the housing bubble expanded after the New Year. Still, Andrew said her new home cost about $ 450,000.
Andrew said he won’t be moving anytime soon – and the market agrees. At the national level, home prices rose, in some cases dramatically.
“Since we closed, I’ve been following the houses in the neighborhood and I’m just amazed,” he said. “There’s a house down the street that sold for $ 1.2 million. I keep following the houses in town of similar size and they cost 50, 60, 70 more than what we paid for. “
According to the Zillow Home Value Index, home prices have risen 9.1 percent over the past year since the pandemic began.
Ginny Fey is a Traverse City broker at Real Estate One. According to data she received in July, the housing stock in northwest Michigan is tiny compared to the population. More than half the available homes were more expensive than Andrew Dodson paid for his new home.
“Crazy. That’s the first word that comes to mind,” said Fey. “The challenge is that there are so many buyers competing for these offers that they are usually gone within 10 days.”
To make matters worse, according to the National Association of Homebuilders, the average price to build a new single-family home has increased by nearly $ 30,000 due to rising wood prices. If there is a shortage of labor, this number can increase even further.
While Andrea Pagel was able to acquire property on the Old Mission Peninsula shortly before the pandemic closed, she said her home, which is currently under construction, is still rising in price.
She said she had to pay her builder 50% more out of pocket for lumber.
“It’s as if everything is affected. It affects us right now, ”said Pagel.
The current state of the housing industry poses problems – not for wealthy remote workers or well-heeled retirees – but for service professions, nurses, craftsmen and workers in the region.
Research by Networks Northwest, a data agency that spans 10 northwestern counties, shows the population has been rising steadily since 2010 – the pandemic just highlighted one problem the Grand Traverse region has been facing for some time.
As more and more people move to the bay, the area is losing affordable housing options for those who always have to show up for work in person.
“We have a lot of people who live comfortably,” said Traverse City Mayor Jim Carruthers. “But all of these people demand services, people who mow their lawns, people who clean their houses, people who serve them in restaurants. You need the service class to support all of that. “
Carruthers said the city government has made efforts to provide apartments in all price ranges. The state raised funds for rental units on West Front Street earlier this summer. The project is intended to generate investment and create jobs.
Carruthers said, however, that housing options will soon have to be expanded beyond the city limits. He said that by this point in time, the collaboration between the city and the surrounding counties will be the key to stabilizing housing in a very crowded part of the state that is only getting more expensive.