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Subdivisions, Vacant Lot Sales on the Rebound

September 12, 2013
Subdivisions, Vacant Lot Sales on the Rebound

Remember the real estate heydays of five years ago, when new homes were being built in new subdivisions seemingly everywhere in and around Traverse City? It looks like the “dog days for dirt” are coming to an end; realtors say sales of vacant land in subdivisions are back, as buyers find themselves priced out of existing homes in downtown Traverse City.

“Recently there has been this upsurge in new construction as buyers are feeling more confident in the stability of the real estate market,” confirms Bob Brick of Re/Max Bayshore Properties.

The numbers tell the story of a turnaround underway. So far this year, 171 vacant lots have been sold in Grand Traverse County. In 2010, less than half that many had sold.

For years, subdivisions were developed and demand was there to fill them with new homes at low interest rates (think Cinnamon Ridge, South Creek, Lone Tree, Black Bear Farms, Morgan Farms, Stoneridge, Arbor Grove Verndale, and many more). But when the economic collapse of 2008 came quickly, sales stopped almost completely and many developers defaulted and lost their properties to banks.

Judy Porter of Coldwell Banker Schmidt, who has sold more than 400 vacant parcels in the past several years, says “nobody expected the collapse to be that bad,” and that it lasted longer due to a number of reasons.

“Banks got tight on lending and wanted to see 25-30 percent down, construction loans became difficult or impossible, and those who were used to moving into new homes every 2-5 years had to stay put because their values hadn’t come up to what they paid for their homes,” she says. “Now you’re seeing a lack of inventory of existing homes -- especially affordable ones in town -- so new construction is coming back.”

Both Brick and Porter say what’s hottest now are those subdivisions closest to the schools and amenities of downtown Traverse City. Downtown homes have witnessed an unprecedented surge in values in the past eighteen months; many are selling well above asking price. As a result, home buyers attempt to find value on the outskirts. Porter points out that Traverse City is unique – in most areas, home values in the city center are lower, with prices rising the farther away from town.

The demand and gradually shrinking supply will soon lead to something we haven’t seen for five years – new subdivisions being developed. Though they were cautious to tip their hands by being too specific prior to local planning commission approvals, several engineers and realtors did confirm that plans are underway to develop more than one subdivision close to town.

According to the Traverse Area Association of Realtors, 1264 vacant lots remain for sale in Grand Traverse County alone, prompting Brick to caution those moving too quickly.

“I know there are projects in the works, but the oversupply of existing lots makes this development [and the] new lot absorption rate very risky. We need to have a very stable, confident economy to take the risk of…being able to sell lots fast enough to stay ahead of the costs to hold.”


Most Recent Comments

 
Restless Native on September 17, 2013 4:04pm

Tom is not being racist, and I don't know that he's afraid of minorities, he's just sick of big brother prying into every aspect of our lives, including where we live. Enough is enough!

Jim on September 16, 2013 1:09am

@Tom,

Racist much? If you are afraid of minority moving to TC, please feel free to move to your choice of utopia. Please.

Sincerely,
Jim

Tom on September 13, 2013 4:00pm

Speaking of subdivisions, please be advised that central planners in Washington D.C.want to give HUD the power to determine where people can live, if they think a neighborhood is not diversified enough, maybe even saying people would be required to move. If this is true, God help us.

Restless Native on September 12, 2013 10:27pm

"...those who were used to moving into a new home every 2-5 years had to stay put..." What on earth is he talking about?! Most people don't even do that with a car! Sounds like Realtorspeak intended to make you think that's the norm in order to sell more houses.

Gloria on September 12, 2013 12:54pm

Welcome to the neighborhood, Diane Bolton! I've lived here for over 40 years. It's great to hear such enthusiasm!

Matt Therrien on September 12, 2013 12:03pm

“Those who cannot remember the past are condemned to repeat it.” Santayana, The Life of Reason, 1905
Be careful people!

Diane Bolton on September 12, 2013 10:35am

I agree with Gloria: Homes in the TC Heights area are wonderful, affordable, and just the right size as starter homes for young couples, singles, or those wishing to downsize for a variety of reasons. I'm living proof: I found just the right house in this area and love it. I mean really: Who wants to clean a multi-thousand square foot house at middle age? Mine is 1,056 sq. feet and is quickly cleaned, leaving more time to enjoy my huge, fenced backyard, and the TART trail directly behind my property. Oh, and my dog loves it, too.

Jim Carey - Custom Visions RE on September 12, 2013 9:07am

Just a great reminder of how special the Traverse City area really is! The rebound is certainly unique to our geographical area, as the majority of MI markets lag. As a real estate professional, it is no longer a surprise to have e-mail inquires for new construction from California to Maine in a 24 hour period. Cheers to Traverse City and Northern MI: Location - Location - Location!

Gloria on September 12, 2013 8:46am

When people say they can't afford homes in TC I wish they would consider Traverse Heights area. Most homes are humble but many have large lots with room for expansion. They are generally priced below $100,000. I'd love to see young families invest in starter homes. It's also nice for retirees. I wish the city would do more to promote the area. There are large trees, hills, almost a country setting. Close to shopping, Tart Trail, Library, Hull Park, and a 15 min walk to West Bay! I know it's "the other side of the tracks" but c'mon over! You might like it! Wish I had more room--I could go on!

Marie on September 12, 2013 7:13am

These are not "subdivisions" they are site condos.

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