When Bob Krause bought 10 acres in Manistee in 1999 for his northern Michigan getaway and a few years later built a three-bedroom, two-bathroom cabin on the property surrounded by the Manistee National Forest, he considered it an investment as well as a retirement. .
The Commerce Township resident said he never imagined what the vacation home market would be like 20 years later. His second home sold for $350,000 in less than two weeks on the market to the first person to see it.
“My brother and his wife live in the area and told me the real estate market was on fire so I knew I was sitting on a nest egg. I just couldn’t believe how big that nest egg was” , says Krause.
The meteoric rise of the real estate market is well documented, but the demand for second homes is just as strong. In the first half of 2021, the most recent statistics available, vacation home sales jumped more than 57% from the same period in 2020, according to the National Association of Realtors.
The market is even stronger in vacation country Michigan. Several northern Michigan counties are considered “vacation home counties,” defined by the NAR as having 20% or more of their housing stock listed as seasonal. Northern and Northwest Michigan has one of the highest concentrations of vacation homes in the country.
In Leelanau County, which includes the scenic and highly sought-after tip of the state that juts into Lake Michigan northwest of Traverse City, the average home price in the first quarter of this year jumped to 779,960. $494,649, up from $494,649 the same time last year, according to Kim Pontius, CEO of Aspire North Realtors, the association of realtors that includes Leelanau and Grand Traverse counties and the surrounding area. To put that into perspective, during the first quarter of 2012, the average home in Leelanau County sold for $274,831.
“A lot of members tell us that it’s now common for vacation homes to get $100,000 more than the asking price. The asking price is a starting point now. People are buying real estate here without seeing it. They see a property on the internet and they waive home inspections and septic inspections just so they don’t delay the transaction,” he said. “It’s always been a special market for vacation homes, but I don’t I’ve never seen anything like it.”
Tracey Krause (no relation to Bob Krause) was visiting the Baldwin area from her home in San Antonio, Texas and fell in love with Wolf Lake. She’s stayed on the lake several times for horseback riding vacations and was kayaking when she saw a “for sale” sign for a cabin near the water’s edge.
She called the real estate agent listing the house and although she hadn’t purchased that particular cottage, Krause stayed in touch with her. The agent sent Krause lists periodically and last year she found one she liked. “I emailed my agent the next day and was like, ‘I think that’s it,'” Tracey Krause said.
It was a Sunday and the Wolf Lake cabin was to be shown twice on Monday to two other potential buyers. Her agent walked her through the chalet remotely using her phone’s camera, though service was spotty and Krause couldn’t see everything.
Yet she saw enough of it to know she wanted him.
His agent suggested sending an offer to the estate, which was selling the chalet with a deadline of midnight Sunday. The offer was accepted. Krause owned a cottage in Michigan, having never set foot there.
“I grew up in Atlanta and my family had never been to Michigan,” she said. “I have absolutely no connection to the state. Just found it and it looked so soft and scenic. Love the clean water and dark skies.”
She rents the cabin most of the year on VRBO.com and uses it when she travels north for her horseback riding adventures.
It’s a typical story of how quickly those looking to buy have to move.