Lake Michigan is king of lakeside real estate locations
West Michigan lake’s market is worth $1.3B, according to Lake Homes Realty’s summer market report
Lake Michigan continues to dominate lake home realty.
According to Lake Homes Realty’s summer 2019 market report, Lake Michigan is No. 1 in several factors, including the biggest market overall, biggest home market, biggest land market and most listings.
The Lake Michigan market is worth $1,311,332,454, which is significantly greater than the second-largest market overall, Lake Norman in North Carolina, which is worth $783,608,952.
Lake Michigan’s continued rule at the top of the list is even more impressive considering Lake Homes Realty expanded its data gathering to 25 states where the company is active, compared to only 13 when it conducted the same study in 2018.
Lake Michigan’s high real estate value comes with consequences, however, as the market ranked No. 1 in most homes available (1,178 units) and most land available (1,123 units).
Except for markets where the average lake home value is more than $800,000, lake homes priced at $750,000 or more are seeing very limited buyer interest in most markets. This will not change in the next year or longer for several specific reasons, Lake Homes Realty CEO Glenn Phillips said.
“Culturally, ‘The Age of Opulence’ has ended,” Phillips said. “It is no longer as popular to own high-end homes. This is impacted by older homeowners downsizing, thus adding to the inventory of high-end lake homes for sale.”
The home construction boom from 2003-07 in many lake markets often focused on high-end homes, Phillips added. These homes were purchased at the height of the real estate boom with prices at their peak. Buyers lost their money the moment they bought at a premium price, and many high-end homeowners still are not yet emotionally, or financially, ready to accept that loss.
Lastly, many of today’s lake home buyers believe the market is at or near price peak, Phillips said.
“They (buyers) show little appetite for paying what they believe is an unrecoverable premium as we approach an inevitable economic downturn, regardless of potential severity,” he added.
Lake Michigan’s market makes up over 40% of the entire lake home market in the state. Five Lake Michigan submarkets, the Manistique area, Glen Arbor area, Petoskey area, Saint Joseph area and New Buffalo area ranked Nos. 5, 6, 7, 8 and 10, respectively, in having the most expensive homes in the state.
There were 248 million-dollar-plus listings on Lake Michigan at the time of the report and 508 million-dollar-plus homes on water, or almost 49% overall.
As for who still is shopping for a slice of Lake Michigan real estate, 75% are over the age of 45. Most are in their mid-50s and -60s, and 39% of them come from out of state.
Chicago is the No. 1 metro area outside of Michigan from where people are searching for property along Lake Michigan. Other shoppers come from Nashville, Tennessee; Toledo, Ohio; South Bend, Indiana; and Indianapolis.
The summer 2019 market report is based on real estate property for sale based on listing data collected in May 2019, including value and volume of listings in the 25 states covered in this report.
When calculating the “most expensive” and “most affordable” rankings, any lake with fewer than 10 home listings, or 10 small land/lot listings or fewer than five large (10 acres or more) land/lot listings, currently available for sale were eliminated from the report to increase the reliability of the listings.
Lakes with less than 1 total acre were not included in acreage price averages. The several state graphics include only lakes with one or more or two or more million-dollar homes. ZIP codes with four or fewer listings were not included in ZIP code analyses.
Many states, Michigan especially, share at least one large lake with another state, and to best represent their market size, the inventory for the entire lake market is included in the market size rankings.