Just how crazy is the real estate market in Traverse City? The Ticker asked eight local real estate professionals to share their wildest stories from the pandemic-era boom, as well as their predictions for what the market might look like in three years.
Brendan Davis, Five Star Realty
Craziest story: I got a call from one of my buyers about a condo. It had been listed just a few minutes ago, but the showings were already booked up for the day. I managed to squeeze us in the next day at noon. I woke up the next day ready to head over there – and learned that, within 12 hours, the condo had been sold, cash, for $200,000 over asking price.
Prediction: The market will surely flip as interest rates rise and our buyer pools diminish. However, more people are beginning to learn that this huge ‘inevitable crash’ will only be temporary, as real estate is something that will be forever crucial to a functioning society.
Matt Dakoske, RE/MAX Bayshore
Craziest story: Team Dakoske listed a home south of Northport, directly on the water. We put the home 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 asking, sight-unseen, with no Inspection, all cash, and closing in 14 days.
Prediction: The housing market in the United States is short around five million homes. Even with interest rates increasing, there will be a shortage of houses. Demand will be there for the foreseeable future, with sellers being on the winning side. As a result, the lowest rate of interest most of us have seen in our lifetimes has been missed by many purchasers, who seemingly think the real estate bubble will burst and prices will drop. Since 2008, lenders have set things up [to avoid] what we went through then: no liar loans, lots of cash in the market, and equity at an all-time high. The only thing that will change in the next three years is that it will cost more to buy a home.
Shawn Schmidt Smith, Coldwell Banker Schmidt
Craziest story: On the front end of the pandemic, a few of my seller clients considered taking their homes off the market and letting time pass. It didn’t take long to realize that property could still sell during this stressful time.
Prediction: Property valuations continue to rise at a fast pace. As the area continues to get national recognition, this trend will continue. However, the trend should begin to top out, as inflation and more inventory will help regulate things.
Debra J. Hall, Real Estate One
Craziest story: One of my more frustrating stories involved 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 fall 2021 for 60 percent higher than he purchased it for – and much higher than it could possibly appraise for. Amazingly, he did receive a full-price offer, and the buyer agreed to make up an appraisal gap knowing the home would never appraise. Instead of accepting the offer – and gaining $665,000 in just 18 months – the seller took the home off the market.
Prediction: Nothing stays the same. I’ve been a full-time Realtor for 22 years, so I have worked through strong buyer’s markets as well. I remember the buyers ‘beating up’ the sellers on price and terms – homes selling 10-40 percent below listed value – and now the pendulum has swung to the sellers. In three years, we will still have a good seller’s market, but it will level out. I believe we will have a more balanced inventory and that the appreciation rate will level out.
Kimberly Bork, Venture Properties
Craziest story: Pulling into a driveway for a listing 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 home for cash. He gave me his friend’s number and encouraged me to call him. The neighbor’s friend did purchase the home, and the sale price was over $3 million.
Prediction: It’s hard to say with so many factors – the Ukraine, interest rate hikes, etc. – but I am seeing a huge influx of buyers with cash in their pockets, seeking a beautiful, healthy, safe haven full of farmland and fresh water. The problem? No one wants to sell, as northern Michigan is a pretty awesome place to live.
Bridget Carefoot, Century 21 Northland
Craziest story: I put a client’s home on the market, at an attractive price point, on a Friday evening. We ended up with 28 showings over the weekend, and on Monday evening, my sellers and I got together and reviewed 12 offers, all of them over asking price. Over the following week, I had other agents who had not shown the house calling me, wondering if they could put an offer in as a back-up position.
Prediction: That’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 there are so many buyers, and demand is so pent up, that I don’t see the market slowing down. Even with the interest rates popping up a little bit, there are so many buyers out there that it might not be a factor. And there’s also the question of how much that interest rate bump is going to affect a monthly mortgage payment
Sam Flamont, eXp
Craziest story: The past two years have been insane. I have firsthand experience with houses selling $100,000 over ask, people paying over ask with cash and no inspections, and as many as 30 offers on one house.
Prediction: Traverse City has become trendy and ‘cool’ on a national level, and when that happens, it’s hard to predict an end [to a real estate boom]. Aspen and Jackson Hole have been running for years now. I can’t say [the market] will continue at this pace, 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 having to be submitted by Monday at 5pm. By Monday, we had 38 offers; 30 were cash and 20 were over full price with escalation clauses.
Prediction: This is the most intense real estate market I have seen in my 49 years in real estate. Over those 49 years, I’ve experienced seven real estate bubbles. Every one of those bubbles burst, caused by a myriad of outside forces not always anticipated or predictable at the time. All left some folks upside down with little or no equity. That could easily happen again with the recent run-up in prices – almost 28 percent in the last 28 months – creating an inflationary bubble. Bear in mind there are still 30 million people unemployed, and we are already seeing a substantial increase in number of monthly mortgage payments that are late. My advice? Be cautious and be careful before proceeding.