Real estate sales dwindling, prices peaking

By Ross Boissoneau

Sun contributor

Over the past couple years the real estate industry has seen unprecedented ups and downs: Ups as prices have steadily increased, and downs in terms of the number of homes available for sale. That’s been particularly true in Leelanau County.

“Without question it’s been crazy,” said Judy Levin. The longtime Realtor with Coldwell Banker Schmidt Realtors in Suttons Bay said not only have prices gone through the roof, but there have been so many people desperate to buy they’ve eschewed typical procedures. “People were willing to buy without inspections. In 30 years I’ve never ever seen anything like it.”

When the pandemic stay-home orders took effect in March 2020, many sought refuge in their summer homes in the county. Others looked to move here. The continuing appeal of the area for vacationers also caught the eyes of well-heeled investors, who purchased homes to rent through VRBO or Airbnb.

What resulted was nothing less than a buying frenzy through the latter half of 2020 and into and through 2021. “Last year, a $300,000 home in Suttons Bay had 22 offers. No one saw that coming,” said Roger Schaub of Schaub Real Estate.

For those of means, perhaps especially those coming from large urban areas, the county is a godsend. “I had clients from Manhattan who sold their condo and I was able to sell them an estate in Leelanau County with ten acres,” Levin said. The result: They had more room to run around than they ever would have in the city, while their children still get a good education, and they can take advantage of the region’s beauty and cultural opportunities.

Now here we are in late 2022, and it’s still far easier to sell a home than buy one. “There’s still more buyers than sellers,” said Schaub.

That trend is reflected in the decreasing number of homes sold and continued increase in prices for those that are. Last month there were 43 homes sold in Leelanau County, the lowest number for the month since August 2013. The average last month was an all-time high of $776,488.

It’s not a one-month aberration either. Last year at this time, there were 359 residential sales. Year-to-date figures for 2022 show 230 home sales in the county, the lowest number since 2012. Again, however, the average sale price is the highest on record: $768,058. Last year’s average sale price of $565,833 YDT, which was the previous highm, is over $200,000 less. “These are prices we’ve never been to,” said Schaub.

So where are people looking to buy, and what exactly is selling? Basically everywhere and everything. John Martin, owner of the Martin Company in Glen Arbor, said the current climate isn’t making any distinctions. “Waterfront is always good. Suttons Bay, Leland, Glen Arbor, Empire — the coastal towns are always busy. Now … there’s activity in the middle of the county, the fruit belt. The rolling hills, the fruit trees are beautiful. People like a really nice view.”

“The entire county is hot,” agreed Schaub.

So what’s next? Some anticipate a slowing in the market as interest rates rise, though as most buyers are paying cash, increasing interest rates are less problematic. But as they signal a potential weakening of the economy, they may be a harbinger of leaner times.

“I don’t know where it’s going,” said Martin. He said the volatile situation with the stock market and current events may slow things further. “There’s a lot of apprehension. There’s a lot going on in Washington and across the globe.”

What seems likely is a continuation of higher prices and fewer sales, until more homes are built or a sudden urge to sell strikes. Part of the challenge dates back to the Great Recession. When the housing bubble burst and the industry took a sudden nosedive, so too did the construction industry. Thus there was a years-long gap during which few houses were built.

Further, many builders left the state, or left the industry altogether. As the economy recovered and the market again took off, that lack of sellable homes that were five to ten years old was exacerbated by the fact the construction industry couldn’t keep up with demand. Many of the skilled construction trades who left the state or the industry have not returned, due in part to the lack of housing in which to live. It’s a catch-22.

It all points to a long slog for the supply to catch up to demand. “There’s change ahead, but slowly,” said Levin. “We’re still not getting the (necessary) amount of inventory.” As proof, she points to a question she and others get from those who might like to get in the market while prices are at an all-time high. “They ask, ‘If I sell, where will I go?’”

It portends continued stress for those looking to purchase a home, while circumstances favor those who want to help assuage the shortage. “There’s opportunities for builders all over. They can’t keep up,” said Martin. “It’s a great time to be a builder, and it’s a great time to be a Realtor.”