2017 Mid-year Recap
For the first half of 2017 we’ve seen a slight dip in sales for commercial properties in Grand Traverse County, but the marketing time has decreased significantly. Last year we had 37 sales by June 30th and this year we have had 33 sales, so far. It is likely that the decline in sales is due to fewer properties coming on the market and higher asking prices for properties that are on the market.
Currently there are 126 commercial properties for sale in Grand Traverse County. The average list price for these is $676,630, which may be an all-time high for asking prices. The average sold price of commercial properties in the county for the first half of the year was $392,088. Those sales represent a 12.8% discount to the property’s asking prices which averaged $449,543. In the first half of 2016 we had our highest reported sale of $13,000,000 for a mobile home park. This sale pushed the average sale price for the first half of 2016 up to $727,333, however if we exclude this outlier, the average sale price for the first half of last year was only $386,425 which indicates sale prices have increased 1.5% this year.
Perhaps one of the largest changes in the market has been the length of time it takes to sell a property. In 2014 the average days on the market for commercial property that sold in Grand Traverse County was 445 days. In 2015 that decreased to 376 days and 2016 saw a slight dip from there to 344 days. In the first half of 2017 the average time on the market for the properties that sold dropped to 241 days. Although this is longer than residential properties, the change is significant since properties in our area are selling almost twice as quickly as they were a few years ago. When buyers see a good property with a fair asking price, they are moving much more quickly to make an offer and close on the property than they have in the past few years.
Lease space has seen a similar decrease in time on the market with the average days dipping from 445 days in the first half of 2015, to 254 days in 2016 and 226 days the first half of this year. We’ve only had 39 leases signed this year versus 45 in the first half of last year. As with the decline in sales, this is probably due to the fact that there are fewer spaces available for tenants. 119 spaces were listed in the first half of last year, but only 106 so far this year. The lack of available spaces is keeping businesses and investors from expanding and signing new leases.
There are quite a few buildings currently being built and other development in the planning stages. New development will help the market grow, as properties become available and businesses are able to find space that works for their needs. Until then, if you need office, industrial, retail or restaurant space, be ready to move quickly when the right opportunity comes along.
Dan Stiebel, CCIM