Alongside continuing strong dollar volumes for home sales and a steady flow of prospective buyers, Realtors in Northern Michigan also found 2019 bringing some marketplace challenges associated with tight inventories.
Multiple Listing Service data showed year-to-year increases for 2019 in the median prices for residential sales handled by Realtors in Emmet, Charlevoix, Otsego and Cheboygan counties. The number of homes sold edged up from 2018 to 2019 in Emmet and Cheboygan counties, but transaction counts dropped a bit year-to-year in Charlevoix and Otsego counties.
Amid the easing pace of sales and the upward trend in prices, some area Realtors saw basic supply-and-demand principles at work — with plenty of clients interested in purchases but a limited supply of available properties.
“Signs of a strong economy are reflected on the real estate market and that’s all encouraging,” said Gill Whitman, an associate broker at Berkshire Hathaway HomeServices Michigan Real Estate’s Harbor Springs office.
At the same time, “I think the biggest problem in our market right now is lack of inventory,” he added.
In the Emmet County real estate market, Whitman said supply tightness is noticeable throughout the entry- and mid-level price tiers, and that selection is somewhat limited even in higher-end home categories.
“You advise your buyers to move quickly if they find something that they like, because these days it’s not uncommon to have multiple offers on a property,” he said.
At Blaker Realty in Gaylord, owner Bill Blaker saw a similar mix of trends at play in that area’s residential market.
In terms of business performance, “We had another fine year last year,” Blaker said of his agency.
From the standpoint of available home options, though, Blaker added that it has been “hard to find opportunities for my buyers.”
Blaker said tight availability is particularly challenging in the $200,000-and-lower segment of the market. As the real estate market has rebounded from the recession of the late 2000s, Blaker noted that area home pricing has seen noticeably sharper growth than the rate of inflation, and that market trends seem to be prompting some potential buyers to seek out more modestly priced areas in neighboring counties.
“Supply-and-demand has pushed people out of this market with nowhere to go,” he noted.
One Cheboygan-area Realtor, Exit Realty Premier broker-owner Roger Kopernik, said he also noticed signs of residential market strength alongside tight availability of properties during the past year.
“Inventory is down,” he said. “The demand is higher.”
Kopernik said his agency has received plenty of calls from home seekers, and noted that some local economic happenings — anticipation of Canadian-based Enbridge’s pipeline project in the Straits of Mackinac area, and some recent commercial real estate purchases around Cheboygan — have boded well for the residential market. At the same time, he said inventories seem to be constraining the level of activity somewhat.
“If something comes on the market and it’s priced right … it just disappears very quickly,” Kopernik said.
As Exit Realty Premier moved into 2020, Kopernik said the agency saw a bit of a year-to-year dip in both overall sales volume and transaction counts for January, and he sees the supply situation as one possible factor in this.
Realtors contacted by the News-Review tended to agree that the region’s sluggish pace of new home construction during the past decade has been one significant factor in limiting inventories. Blaker noted that new homes have tended to be a fairly costly proposition in recent years, with tightness in Northern Michigan’s supply of skilled construction labor contributing to the trend.
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