November 2012 - A look at the Stats
It will come as no surprise that real estate is finally trending upward after a long decline since 2007. What may be a surprise is that commercial real estate in Northern Michigan was selling for the lowest sale prices for the first three quarters of 2013 in 10 years, except for the low hit in 2010. The good news is the trend seems to have reversed itself last month. There were six property sales in Grand Traverse County, and all of them sold for more than the average annual sale price since 2007.
Specifically, October sales in the county ranged from $435,000-$1,450,000. There is a detailed list of sales towards the bottom of the newsletter. These sales increased our average sales price for the year to $358,551 and brought the average up just over 1% higher than last year.
Following is a breakdown of trends for the office, retail and industrial sectors for Grand Traverse County and the state of Michigan based on charts provided by LoopNet (see office chart below). Overall, asking prices remain about 30% off of their highs, but prices have increased about 6% since the year early period. Properties are also selling closer to asking price than they have for the past 5 years.
Asking prices for office buildings remain flat across the state, but have increased about 6.5% since last year in Traverse City. The same trends hold true for asking rent on office space in the state, but the asking price has increased 9.6% since the year earlier period in our area.
While the number of transactions in Traverse City for Industrial properties is often too low to show accurate sales trends, the State trend has shown asking prices decline from 2007-2012 and just begin to increase in 2013. Sale prices have been rising since mid 2012 and asking prices for lease rates have been increasing since the beginning of 2012.
Retail has been the slowest to recover with asking prices for properties for sale, just barely increasing in the past two quarters. Asking price for retail for lease is still in a decline and is not expected to reverse its trend until we see more demand from retailers to absorb much of the excess space on the market.
Overall if the trends continue through the end of the year we should see increases in asking prices for all property types. With a strong fourth quarter, we may also see our average sales price in Northern Michigan increase to the highest level they have been since 2007.
Dan Stiebel, CCIM