I submitted a correction to The Traverse City Business News recently, as I noted an error in a story on the real estate market. Gayle Neu was quick to respond with apologies and a promise that they'd address it. Whether it's stories on new businesses, the real estate market, or being included in their annual 40 under 40 feature, I really enjoy working with Gayle and the crew at TCBN, and know that the error was innocent and not an attempt to spin the news to the negative.
At any rate, the information is worth sharing here.
To the Traverse City Business News,
I noticed the article titled "Traverse City real estate: alive and (relatively) well" by Bill Wheadon in your October 2008 issue. I wish to point out an error in the labeling of the data, as well as provide some additional information that may clarify the figures reported. While I will address my home market of Benzie County specifically, I believe the error to be the same for all areas, though how that changes the assumptions which were made will vary.
In the chart provided, sales information is reported as being thru July. The data is actually for the month of July alone, NOT year-to-date through July. Thus, this is a one month sample of what is occurring in the market. Small samples are inherently less accurate for deriving a mean (or average) than a large sample, a fact which I believe is illustrated in the % change indicated.
A search of YTD sold data for all property types (Residential, Vacant, Commercial and MultiFamily) in the Traverse Area Association of REALTORS MLS shows that through September 30th, the number of sales in Benzie County decreased by 33%, while the median price fell from $122,000 to $115,000, a drop of 5.7%.
As much of the focus is on what is happening in the Housing Market, I have been tracking Residential Sold data separately. Year to date in Benzie County through September 30th, I find that the number of residential sales has fallen from 179 to 134 (-25.1%) and median prices have fallen from $155,000 to $132,500 (-14.5%)
While our region is seeing a decline in home prices, we continue to outperform most if not all of the state. The availability of mortgages at low interest rates (yes, mortgages are still available, and with favorable terms,) increased affordability of homes, the forecast growth expected for our region, the desirability of the area including quality of life, and the impact of the baby boom generation will continue to make the Grand Traverse region one of the best areas in Michigan to purchase real estate. Buyers who act now are making exceptionally good deals, and we are seeing some owners choosing to take advantage of the market to move up into a larger home. Inventory is beginning to tighten, with less new inventory coming onto the market and the ratio of Listings Taken to Listings Sold for September at 3.06/1, a much healthier ratio, and vast improvement from its peak of 5.78/1 in January of 2007.
Attached is the data from which the statistics on sales were drawn. Please let me know if I can be of further assistance.
Associate Broker, Director of Support Services
Coldwell Banker Schmidt REALTORS
President, Traverse Area Association of REALTORS