*According to proprietary research commissioned by HomeAway, Inc. for the National Association of Realtors’ 2012 Investment and Vacation Home Buyers Survey (realtor.org).
From 2010 to 2011, the National Association of Realtors (NAR) reported a 64 percent jump in investment real estate sales*, a figure tied to property bargains and low interest rates sparkling ashore in recession’s wake.
But the bottom line isn’t all that’s pulling buyers in to Michigan’s top vacation destinations and other resort properties.
With home prices slashed up to 60 percent in some markets over the past year, many second properties purchased across the U.S. in 2012 were picked up solely to be rented out for extra income. But real estate agents representing some of Michigan’s top vacation spots say their catapulting base of buyers is much less focused on building a nest egg than it is a second family nest.
“Michigan leads the nation in terms of homeownership at 70 percent. It’s the mindset of Michigan residents to be home buyers and home owners.”
— Andrea Galloup
“We find it interesting that we rarely have conversations with our prospects about investment value, potential cash flow or appreciation potential,” said R.C. Hermann, who developed Tamarack Lodge, a luxury condominium resort on East Grand Traverse Bay. “Our buyers are more interested in how ownership can enrich their lifestyle.”
More grandparents who want to leave the next generation with a legacy of family activities instead of a personal investment account are financing a vacation retreat, he illustrated. Younger couples than previously “who seem to have a more acute sense of immediate fulfillment than their parents’ generation” are also becoming owners of Tamarack Lodge’s one-, two- and three-bedroom furnished units.
“The lower market prices and bargain interest rates help to make a compelling case for ‘DO IT NOW,’” Hermann said. “But they aren’t the primary motivation.”
Much of the same is being seen at Crystal Mountain Resort in Thompsonville, where whole, quarter and eighth-ownership options are offered. Here, buyers ranging in age from 30 to 65 fueled 2011’s soaring property sales, which doubled those of 2010 and quadrupled in the first four months of 2012 from the same period last year.
Tech-savvy, eco-minded, health-conscious and family-oriented, “Our target market is defined more by lifestyle than by generation,” said Nancy Mullen Call, a GREEN associate broker for Crystal Mountain Realty. “Baby boomers and Gen-Xers are both motivated by usage — a place to enjoy quality time with family and friends.”
But today’s buyers are also cautious, Call said, about both initial and on-going carrying costs. Top-quality downsized residences and sustainability have replaced conspicuous consumption. Fractional ownership that allows people to just pay for what they’re going to use is a popular option — especially when owners can opt to trade some of that time nationally and internationally through vacation exchange programs available at some resorts, including RCI at Crystal Mountain and Interval International at Tamarack Lodge.
“Being able to offset expenses with rental revenue has also become an amplified benefit,” shared Brian Main, marketing manager for Boyne Realty. He noted that lower market prices boosted by benefits like rental management inspired record-setting sales at Boyne Resorts in 2011.
More than a few vacationers have discovered it’s not hard to leave hassles behind in Michigan, which is why so many leave their own states — and nations — to seek rejuvenation here.
Use of resort amenities and hospitality services make buying a slice of such vacation havens an even bigger plus. While optional memberships at destinations including Grand Traverse Resort & Spa and The Homestead allow owners access to on-site health clubs, golf, pools and full-service spas, it’s exceptional personal service that ensures a vacation is just that — from master-planned communities such as Harbor Shores in Benton Harbor, which offers four distinct districts that each cater to a particular lifestyle, to single resort retreats like LeBear Luxury Residential Club & Spa, which houses 14 upscale, three-bedroom residences.
“The professional staff here handles every minute detail, from making dinner reservations and grocery deliveries to dog-walking and boat launch assistance,” said Lisa Schmidt, a broker for Coldwell Banker Schmidt Realtors who represents LeBear. “Second home ownership can only truly be leisurely if someone else is handling the behind-the-scenes hassles.”
TIME TO ESCAPE
More than a few vacationers have discovered it’s not hard to leave hassles behind in Michigan, which is why so many leave their own states — and nations — to seek rejuvenation here.
“We take notice of where our buyers in northern Michigan are coming from, and statistics show 27 different states and five different countries,” said Traci Bacigalupi, principle associate broker for Harbor Sotheby’s International Realty, based in the resort Village of Bay Harbor between Petoskey and Charlevoix. “Some come to vacation during the summer, and others for the purpose of simplicity and the enjoyment of living here year-round.”
After experiencing a sales upswing of 58 percent in 2011, Sotheby’s responded by opening two additional offices this past spring in Harbor Springs and the Village at Walloon.
“Spending quality time with family has become the driver behind some fabulous vacation homes,” Bacigalupi noted. “(Right now) there’s tremendous opportunity in the market — some really beautiful building sites are available at a great price.”
It’s not going to last.
Real estate agents representing some of Michigan’s top vacation spots say their catapulting base of buyers is much less focused on building a nest egg than it is a second family nest.
As the market mends, the notable amount of positive national recognition northern Michigan has received over the past decade — including most recently Sleeping Bear Dunes National Lakeshore being voted “America’s Most Beautiful Place” on ABC’s Good Morning America — will only continue to grow the area’s popularity and desirability, believes Traverse City veteran Realtor Andrea Galloup.
She’s watching it happen at Cedar Valley Ridge near Traverse City, which she represents among other varied properties. The development offers 133 acres of common area including six miles of groomed trails that will be shared by just 35 homeowners.
“Buyers are taking advantage of this opportunity now to purchase retirement homes,” Galloup said, “even though they may be three to five years from retiring. They’ll use the next few years to fix up the home to their liking and spend their vacation time either remodeling or simply enjoying the house and area.”
Michigan, Galloup added, leads the nation in terms of home ownership at 70 percent. “It’s the mindset of Michigan residents to be home buyers and home owners,” she observed.
And to head home for vacation.
Lisa M. Jensen is editor of Michigan BLUE Magazine.
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