Some Home Sales Offering Surprises
LANSING — A quick scan of the news offers a bleak portrait of Michigan's housing market: menacing locks on the doors of foreclosed houses, plummeting home values, empty neighborhoods dotted with "for sale" signs.
But not every part of the state feels the crunch.
"We've been somewhat insulated up here," said Kim Pontius, executive vice president of the Traverse Area Association of Realtors.
"Real estate is a local phenomenon, not a national phenomenon," he said, and a comparison of housing markets in southeast and northwest Michigan is "like night and day."
Pontius said smart borrowing and lending practices, as well as the Traverse City area's aesthetic appeal, have kept the market there stable.
"The values of the homes are consistent with what people are borrowing," he said.
Pontius said his organization sold just less than 10 percent fewer homes in 2007 than in the previous year. But he added that 2005 and 2006 were "banner years," so the dip in sales wasn't surprising.
Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors, painted a similar picture. Walter said his organization, which covers all of Berrien and portions of Cass and Van Buren counties, had its best year ever in 2006. Sales figures dropped about 11 percent in 2007, he said, but it remained the association's fourth-best year.
When Benton Harbor-based Whirlpool Corp. bought Maytag in 2006, 250 to 400 families moved to the area, Walter said, which helped boost the local housing market.
Sales have been steady for homes valued at more than $1 million along the Lake Michigan coast, he said, and the vacation home market has spread inland.
Walter said the Niles and Edwardsburg area has also attracted homebuyers from northern Indiana seeking less-crowded schools and lower property taxes. Another source of growth is due to the return of former residents to the southwest corner of the state.
"People who used to live here are coming back," Walter said. "They're looking to retire here."
Despite strong sales in his region, Walter advises caution in assessing the market.
"We have to be careful when we talk with people about averages," he said. "Real estate has always been local. We do have variances within our area."
The Keweenaw Peninsula is a fine example of that variance.
Houghton-based Realtor Ginger Stroube said that while the market in neighboring Ontonagon County is depressed, the cities of Houghton and Hancock saw a 25-percent increase in the number of homes sold from 2006 to 2007.
"2007 was my very best year ever," Stroube said, although sales for her company as a whole peaked in 2005.
Stroube said that hiring by Michigan Tech University in Houghton has spurred the growth in home sales there.
"Here in Houghton, Tech completely drives our market," she said. "It's academia. And academia, thank God, moves people around."
Realtors in these relatively strong markets seem to agree about why their housing bubbles haven't burst: There wasn't much of a bubble to begin with.
And the Houghton area has "never, ever seen even 15-percent increases," according to Stroube.
The same is true in the Upper Peninsula's Iron Mountain, according to Bill Romps, a Realtor there. While his sales are down somewhat, "We're kind of immune to those major ups and downs," he said.
Like Pontius, Romps said that conservative lending and borrowing practices have kept the Iron Mountain market from becoming volatile.
"We don't have those people who overextended themselves," he said.
Romps also agreed that it's important to understand the local nature of real estate markets.
"We're affected by what happens nationally but only peripherally," he said. "We haven't had the issues they've had downstate with foreclosures. We've had some, but we always have some. Do I see figures up here like they have in the Detroit area? I wouldn't want to be in real estate if I did."
Romps said that news coverage neglects to view the mortgage crisis on a local scale: "I think we suffer here from the hype the media is putting out."
"It's just a different world from what other people think is available," she said. "The national media is scaring the heck out of people who can buy second homes."