Is real estate on the rebound?

Published 1:46 pm Thursday, April 29, 2010

Townhomes near the harbor in New Buffalo, listed at at more than $1 million, were among more than 150 homes featured during the Harbor Country Open House last Saturday. Photo by Katie Johnson


Hope is not lost for the real estate market on Lake Michigan. In fact, Realtors are seeing signs of an economic turnaround.

The “Harbor Country Open House” was held Saturday to lure possible homebuyers to the region for a season “kickoff” event.

Touting the area as a “Hamptons destination” for Chicago, Detroit, Indianpolis, South Bend, Grand Rapids and Toledo residents, the open house included more than 50 local Realtors and more than 150 homes. A welcoming reception followed at the Round Barn Winery and St. Julian Winery tasting rooms in Union Pier.

Open house organizer Tom Hemingway, of RE/Max Harbor Country in Union Pier, said the open house was similar to its first year, with 57 Realtors and 56 sponsors.

“All the real estate offices got together to put on this event … to really focus on Harbor Country,” he said.

About 400 people attended this year, comparable to 2009, which recorded eight documented sales totaling $5 million.

“This year has been up,” Hemingway said. “Sales are up. Prices are a little down, with the interest.”

Hemingway explained that the open house really caters to the second-home customer – about 95 percent of homebuyers in Harbor Country.

“We are a second home community – it’s across the board,” he said. “The second-home buyers are usually qualified. It’s a win-win.”

Hemingway said he saw the market finally begin to pick up at the end of 2009.

“People have this pent-up need to buy a second home,” he said.

Donna Iwamoto of Prudential Rubloff said Saturday morning that a couple people had toured her house at 439 South Whittaker St. in New Buffalo, but did not believe they would present offers on the home, designed by internationally acclaimed architect Stanley Tigerman. The secluded, 2.3-acre property, located on a bluff on the Galien River, includes two wings, a silo-like structure enclosing the staircase and a “treehouse-like” screened porch. According to Rubloff, the property, drastically reduced at $629,000, is the only brand-new construction by a renowned architect in Harbor Country.

Mario Zarantenello, a sales associate also with Prudential Rubloff, said several people had looked at his $1.15 million, four-bedroom, Cape Cod-style townhouse in New Buffalo, but he doubted any would make offers that day, explaining the open house was more to kick off the season rather than make sales.

Impact of tax credit
“In March we definitely experienced the rush of buyers closing on houses and taking advantage of the tax credit,” said Gary Walter, EVP of the Southwestern Michigan Association of Realtors Inc. “Almost all the numbers are up by double digits over where we were at the same time last year for the first quarter. Last year at the end of the first quarter we were discussing double-digit declines in year-to-date dollar volume and selling prices when comparing 2009 to 2008. The Stimulus Tax Credit had not fully kicked in. Now we are seeing the impact. Still March remains our kick-off month for the year and like last year we had a major jump in the number of houses sold with 56 percent improvement over February and 83 percent over January.”

At the end of the first quarter, the number of houses sold and closed locally was up 25 percent (485 versus 387) from 2009, year-to-date dollar volume was up 34 percent ($56,376,870 versus $42,131,402) and the year-to-date median selling price was up 32 percent ($81,500 versus $61,600). The median price is the price at which 50 percent of the homes sold were above that price and 50 percent were below. The year-to-date average selling price up just 6 percent ($116,241 versus $109,493) was the only factor that made only a modest increase.

The national median existing-home price for all housing types was $170,700 in March, up 0.4 percent from March 2009. Distressed homes, typically sold at a 15 percent discount, accounted for 35 percent of sales last month – unchanged from February.

Regionally, existing-home sales in the Midwest rose 7.2 percent in March to a pace of 1.19 million and are 15.5 percent above March 2009. The median price in the Midwest was $139,300, up 0.2 percent from a year ago.
In southwest Michigan, bank-owned or foreclosed homes spiked in February to 50 percent but in March returned to 40 percent. For most of 2009, the number of foreclosed transactions declined to roughly one-third of sales.

Interest rates slipped slightly from 5.16 percent in January and February to 5.13 in March in southwest Michigan. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage also slipped from 4.99 in February to 4.97 in March. A year ago the rate was 5.00 percent in March 2009.

The numbers reported for local sales include residential property in Berrien, and the western half of Van Buren and Cass counties.