Every year, we take the winter to break down statistics and conditions from the previous year in an effort to predict what may be coming up in the next year. We predicted that 2011 would see some leveling off of prices and even a slight increase in others. While we did see that occur in various markets we also saw some prices continue to decline which we did not expect. Here's a break down of what we believe to be the factors that will affect the 2012 Northern Michigan Recreational Real Estate Market.
Election Year PoliticsElection years have historically been down years for both the stock market and real estate market which tend to trend along the same lines.
The election cycle in 2008 lead to the largest decline in stock and property values in decades. The big factor then was the fact that real estate prices were still inflated and investing in property did not seem to be a strong alternative to having money invested in the stock market. With the drop in prices since that time, we're now in a much better position relative to the stock market. If the stock market begins to decline, we believe we'll see a lot of investors move their money into real estate and take advantage of those lower prices.
Baby Boomers
2011 marked the year that the first baby boomers hit 65 years of age. This generation continues to make up a larger and larger percentage of our buyers and it's the markets that they're keying on that are faring the best. Low maintenance homes with single story floor plans on or near the water in communities with amenities like shopping, dining, and health care are the prime targets. If you're in this category, don't expect to find rock bottom prices. It's becoming more competitive each year and will continue to become even more so as more Boomers retire. Our advice is to get your property now if you're looking for something with those features, especially in communities like Traverse City, Petoskey, Charlevoix, etc... We're at the leading edge of the next big boom in those communities we believe.
Vacation Properties
We did see a bit of an increase in the number of buyers looking for cabins and cottages to be used solely as weekend and vacation getaways. This was the segment that fell off so dramatically as the economy plunged downward. This is one of the reasons that properties in the more rural areas have fallen more than those closer to city centers. There simply weren't as many retirees looking in these areas due to the lack of amenities and there was so little confidence in the economy that there weren't many people willing to stick their neck out for a property they really didn't "need". Over the past few years, it appears many individuals have been much more fiscally responsible and now find themselves in a position to make a purchase of this sort. Pair that with some incredibly low prices and the ingredients are right for an upswing. We think the election year may hold things back a little bit for these buyers, but the pure vacation market should be at least as good as it was in 2011. We're looking to 2013 for the next real boost for this segment. If you're a buyer, 2012 could be your best opportunity to get in at "the bottom".
The Real Reason for Buying
After having said all that, we think it's essential for each buyer to look at their own situation and
determine the real reason they are considering buying in Northern Michigan. If it's solely a financial investment, then you may be more inclined to sit on the sidelines and see if these predictions come true. If they do, you'll likely have only missed "the bottom" by a little bit. If, however, you're considering buying in Northern Michigan so you and your family can spend time together away from the daily grind of school and work thenwhat are you waiting for? The kids aren't getting any younger and neither are you. Even if the market falls a little bit more over the next year or so, who cares? You'll be among the lucky individuals who gets to share the incredible lifestyle that comes along with Northern Michigan and that will mean more to you in the coming years than anything else you could have done in 2012.
We Service Most of Northern Michigan
Regardless of where you'd like to be, we have an agent who lives in the area you're considering and is anxious to share their knowledge about the market and their region. Here is a list of our agents and brokers and how to reach them.
Sonya Loose, Gladwin Area, sonya@homewaters.net
Jenna McKinnon, Clare Area, jenna@homewaters.net
Midge McGinnis, Houghton/Higgins Lake Area, midge@homewaters.net
Mark Bear, Grayling/Gaylord Area, bear@homewaters.net
Gina Render (soon to be licensed), Montmorency/Presque Isle/Cheboygan, gina@homewaters.net
Mary Janik, Kalkaska/Wexford, mary@homewaters.net
Steve Scheppe, Grand Traverse Bay and Peninsula, steve@homewaters.net
Matt Geib, Eastern Grand Traverse/Antrim County, matt@homewaters.net
Vince Edwards, Benzie County/West Grand Traverse, vince@homewaters.net
