How crazy is the Traverse City real estate market? The ticker asked eight local real estate professionals to share their craziest pandemic-era boom stories, as well as their predictions for what the market might look like three years from now.
Brendan Davis, Five Star Realty
Craziest story: I received a call from one of my buyers regarding a condo. It had been listed just minutes ago, but sessions were already booked for the day. I managed to squeeze us in the next day at noon. I woke up the next day ready to head there – and learned that within 12 hours the condo had sold, in cash, for $200,000 more than the asking price.
Prediction: The market will surely swing as interest rates rise and our buyer pools shrink. However, more and more people are beginning to realize that this huge “inevitable crash” will only be temporary, as real estate is something that will forever be crucial to a functioning society.
Matt Dakoske, RE/MAX Bayshore
Craziest story: The Dakoske team listed a home south of Northport, right on the water. We put the house on the market on a Thursday for an asking price of $825,000. Nine offers were presented on Monday, all exceeding the list price. the [accepted offer] was a buyer offering $100,000 more than asked, blind, no inspection, all cash and closing in 14 days.
Prediction: The housing market in the United States is short of about five million homes. Even with rising interest rates, there will be a shortage of homes. The demand will be there for the foreseeable future, with the sellers on the winning side. As a result, the lowest interest rate most of us have experienced in our lifetimes has been missed by many buyers, who seem to think the housing bubble will burst and prices will drop. Since 2008, lenders have implemented [to avoid] what we went through then: no lying loans, lots of money in the market and equity at an all-time high. The only thing that will change over the next three years is that buying a house will cost more.
Shawn Schmidt Smith, Coldwell Banker Schmidt
Craziest story: At the start of the pandemic, a few of my selling clients considered taking their homes off the market and letting the time pass. It didn’t take long to realize that the property could still sell during this stressful time.
Prediction: Real estate valuations continue to rise at a rapid pace. As the region continues to gain national recognition, this trend will continue. However, the trend should start to pick up speed as inflation and rising inventories will help regulate things.
Debra J. Hall, Real Estate One
Craziest story: One of my most frustrating stories involves a buyer who purchased a waterfront home in the summer of 2020 for just under $1.1 million. He put it on the market in the fall of 2021 for 60% more than he bought it for — and way more than he could possibly value. Surprisingly, he received a full price offer and the buyer agreed to fill a valuation gap knowing the house would never be appraised. Instead of accepting the offer – and earning $665,000 in just 18 months – the seller took the house off the market.
Prediction: Nothing stays the same. I’ve been a full-time realtor for 22 years, so I’ve also worked in strong buyer markets. I remember buyers were “beating” sellers on price and terms – homes were selling for 10-40% below quoted value – and now the pendulum has swung to sellers. Three years from now we will still have a good seller’s market, but it will stabilize. I believe we will have a more balanced inventory and the appreciation rate will stabilize.
Kimberly Bork, Risk Properties
Craziest story: Pulling into a driveway for a registration appointment and moments later hearing the neighbor knock on the door. He told us to name our price and that his best friend would buy the house for cash. He gave me his friend’s number and encouraged me to call him. The neighbor’s friend bought the house and the selling price was over $3 million.
Prediction: It’s hard to say with so many factors – Ukraine, rising interest rates, etc. – but I see a massive influx of buyers with cash in their pockets, looking for a beautiful, healthy and safe haven full of farmland and fresh water. The problem? No one wants to sell, because Northern Michigan is a pretty awesome place to live.
Bridget Carefoot, Century 21 Northland
Craziest story: I’m putting a client’s house on the market, at an attractive price, on a Friday night. We ended up with 28 showings over the weekend, and on Monday night my salespeople and I got together and looked at 12 offers, all above the asking price. Over the next week I had other agents who hadn’t shown the house calling me, wondering if they could bid as a first aid station.
Prediction: It’s a crystal ball question. We don’t know where things will go, given Russia and a few other world event variables. But I feel like there are so many buyers and demand is so pent up that I don’t see the market slowing down. Even with interest rates rising a little, there are so many buyers that it may not be a factor. And there is also the question of how much this rise in interest rates will affect a monthly mortgage payment.
Sam Flamont, expert
Craziest story: The last two years have been crazy. I have first-hand experience with homes that sell for $100,000 more than ask, people who pay ask cash and no inspection, and up to 30 bids on a home.
Prediction: Traverse City has gone nationally hip and ‘cool’, and when that happens it’s hard to predict the end [to a real estate boom]. Aspen and Jackson Hole have been racing for years now. I can not tell [the market] will continue at this rate, but I will not be surprised if it does.
Bob Brick, RE/MAX Bayshore
Craziest story: We listed three homes on a Wednesday, with all offers due by Monday 5pm. On Monday, we had 38 offers; 30 was cash and 20 was above full price with escalation clauses.
Prediction: This is the most intense real estate market I have seen in 49 years in real estate. In those 49 years, I’ve had seven real estate bubbles. Each of these bubbles burst, caused by a myriad of outside forces not always anticipated or predictable at the time. It’s all left some people upside down with little or no equity. This could easily happen again with the recent price spike – almost 28% in the past 28 months – creating an inflationary bubble. Keep in mind that there are still 30 million unemployed and we are already seeing a substantial increase in the number of overdue mortgage payments. My advice? Be careful and be careful before continuing.