Depending on how the last month and a half of 2012 finishes up, we could be on track for a record year for real estate sales in Leelanau County. Unit sales are up 37% for the calendar year to date compared to the same period in 2011, and volumes are up 45% to over $95 million, with average sales prices inching up to just over $300,000 from about $287,000 during the same period last year. These results are just below the sales totals recorded in 2004 & 2005, the previous peak years. And with average sales prices below those of the peak market, the unit volumes have actually exceeded the peak year results (319 YTD'12 to 274 in 2005).
While the increase in average sales price is certainly good news, the improvement appears to stem more from a change in mix (slightly nicer, larger, newer homes), than a true improvement in prices on a like-for-like basis. Either way, this should be seen as an encouraging sign for buyers and sellers alike. For buyers, it's a clear signal that we've passed through the bottom of the market. And for sellers, particularly those with nicer homes to sell, it shows that there is broader interest from buyers - not just the bargain hunters. Even the high end has shown convincing improvement. For homes priced at $500,000 and above, there have been 46 sales in the county through mid-November, up from 32 in 2011, with prices up slightly.
The lone dark spot on an otherwise stellar year has been sales of vacant land, which have remained depressed. Closings in 2012 are at about 1/4 the level experienced during the peak years. Compared to 2011, performance has been flat - slightly more sales, yet slightly lower average prices. This is due to a variety of factors - competition from better values for existing homes, asking prices that are still too high, fewer "dreamer" type buyers, and perhaps many more.
So what's in stock for next year? With inventories broadly down from the past few years, and buyer confidence reemerging, we’ll likely see price appreciation once again, though one should expect it to be modest. It's also reasonable to anticipate a decline in unit sales, given the drop-off in inventory and the likelihood that the most eager of buyers have already acted. For the very top of the market, prices won't see any improvement, as it's the one area with historically-high inventory levels, all vying for a small number of true $1 million+ buyers. We'll also be on the lookout for a pick-up in vacant sales in 2013 – there’s simply not much room for them to decline - but asking prices on the whole may still need to fall a bit to really begin to attract buyers.
If you have any questions about buying or selling real estate in Leelanau County, please Contact Me.