Land along Lake Michigan’s lakeshore is being referred to as a “monster market” by real estate professionals. Photo by Johnny Quirin
Michigan’s Lake Michigan shoreline boasts the biggest recorded market for lakefront homes in the U.S., according to a quarterly real estate report.
Lake Home Realty, a multistate lake real estate company, recently released its winter 2018 lake market report, highlighting the Michigan shoreline as the biggest recorded market, totaling almost $1 billion.
Lake Michigan’s overall market totals $908,675,688, which is 45.5 percent of the total lake real estate market in the state of Michigan (almost $2 billion). Lake Michigan also had the biggest home market in the state at $664,569,688 and the biggest land market at $244,106,000.
“Between our last two (quarterly) reports, we’ve seen … this is a monster market,” said Brian Cauble, Lake Homes Realty director of market engagement and author of the report.
Cauble added his firm hasn’t been licensed in the state of Michigan for longer than a year, but already the Lake Michigan shoreline has been the largest market they’ve encountered to date.
Lake Michigan had the most listings at 1,495 and the most homes available at 673. The region also had the most land available in the state and the second most land in the country with 822 parcels.
Home prices for Lake Michigan were spread relatively evenly: 17 percent were under $250,000; 25 percent were $250,000-$500,000; 20 percent were $500,000-$700,000; 12 percent were $750,000-$1 million; 16 percent were $1 million-$2 million; and 11 percent were priced at $2 million or higher.
Glenn Phillips, CEO of Lake Homes Realty, said although lake homes priced at $1 million or more are selling well, there still is not a high demand for them in most markets.
“First, many buyers who can afford such a high-end home learned during the past real estate bust that they may not be able to easily sell such a home in the future,” Phillips said. “Second, we’ve shifted culturally. The ‘Age of Opulence’ has passed, and it is no longer as popular to own these types of high-end homes.”
Phillips predicted lake homes priced between $175,000 and $750,000 would continue to sell well into 2018 and 2019 but emphasized sellers should price appropriately for age, location and physical condition.
Though Lake Michigan has relatively high home prices, Cauble said it’s not the most expensive on the list and not even in the top 10. Comparatively, the most expensive lake market in Michigan is Walloon Lake, with homes averaging over $2 million. The most affordable lake homes in the state are at Lake Lancer, averaging $66,507
Cauble added the percentage of in-state versus out-of-state buyers is split relatively evenly. Chicago is the No. 1 metro area outside of Michigan looking for Michigan lake property because of a combination of proximity and high median income.
The remaining metros in order of prominence are:
South Bend, Indiana
Tampa-St. Pete, Florida
Among the top 10 out-of-state buyers, Cauble said the biggest outlier is Tampa-St. Pete. He said buyers from Indiana and Ohio make sense considering most buyers want to live close to their vacation home, and buyers from bigger metros like New York and Los Angeles have more money to vacation far from home.
Across demographics, 72 percent of people shopping Michigan lake real estate are over the age of 45, 75 percent are married couples and median income is $120,600.
Although Lake Homes Realty doesn’t have enough data now to provide year-over-year analysis, Cauble predicted the market would continue to grow in the spring, based on the cyclical nature of the market.
“It’s winter, and this market is smaller than it will be in our spring report,” he said. “People go (to the lake), they take their friends and their friends start thinking, ‘Maybe we need a lake house.’”
Findings were based on listing data collected in February 2018. Thirteen states are covered in the report: Alabama, Arkansas, Georgia, Maryland, Michigan, North Carolina, New York, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas and Virginia.
When calculating the “most expensive” and “most affordable” rankings, any lake with fewer than 10 home listings or 10 land/lot listings currently available was eliminated from the report to maintain consistency. Lakes with less than one total acre were not included in acreage price averages.