2018-02-10 / News

Real Estate Market Active, But Inventory Is Limited

By Jacob A. Ball

The demand for moderately priced homes is a primary factor contributing to the strength of the Mackinac Island’s real estate market, says broker Bill Borst, in addition to a robust market for timeshares and vacant lots. The inventory of homes priced from roughly $300,000 to $500,000, including condominiums, is not nearly enough to satisfy the demand. There is less demand for expensive luxury cottages, which might attract a buyer after two months or two years, he says. Among the diverse range of properties available on Mackinac Island, prices have remained constant during the last five years. For smaller homes and condominiums, prices have remained around half-a-million dollars, while luxury homes have consistently ranged from just under $1 million to upwards of $5 million.

As the owner of Mackinac Island Realty Company, Mr. Borst has witnessed more than three decades of trends on Mackinac Island. Many people are drawn to Mackinac Island by its ambiance. For Mr. Borst, being able to contribute to the Island community is what he has treasured most about his position.

“I love the closeness of the community and the fact that they will support each other in times of crisis or illness,” he said.

He has always enjoyed biking to show properties to potential buyers.

The appeal of Mackinac Island to potential buyers as a summer vacation spot is diverse and dependent on the individual. In real estate, the downtown area stretches from Mission Point to the schoolyard, and for some, the hustle and bustle of this area draws them here. Others prefer the peaceful neighborhoods in the interior and along the bluffs. Many enjoy the historic character and the reliance on bicycles and horses for transportation.

Since last fall, Mr. Borst has sold several homes and empty lots, including two Stonecliffe condominiums that closed in mid-January. The best months for home sales on Mackinac Island are from late summer into fall. It is common, he said, for people to return in the fall to finalize the purchase of a home they toured earlier in the summer. While few homes are sold in the wintertime, three homes have sold since November. Two of the houses were less than $400,000, while the third, an East Bluff cottage, sold for $1.25 million. Purchases that are completed with snow on the ground tend to be to people with a familiarity of the Island. Mr. Borst cautions those who are not already acquainted with Mackinac Island to carefully consider their purchase, especially during the winter.

Potential buyers not familiar with the Island ask many of the same questions about life here. They inquire about the lack of motor vehicles, how transporta- tion of goods is handled, about grocery shopping, hunting and fishing, and the school.

“A lot of them are amazed that there is a K-12 school system, and that, quite honestly, the students that go there get a great education,” he said.

He is surprised to see more people interested in moving their families to the Island, but he understands the appeal. The privacy and friendly nature of the community attracts people, he says, and this overcomes concerns about seclusion or the extra effort living on an island demands. In addition, he said most people who work off-island find they enjoy their daily ferry or airplane commute.

The most sought-after properties on Mackinac Island tend to be priced around $350,000. Currently, there are no homes available for less than $1 million, but there is one condominium for sale at $575,000. For those interested in vacationing on the Island for less, there are four fractional ownership properties available for around $100,000. These properties give each owner six weeks of use throughout the year.

In relation to moderately priced properties, Mr. Borst does not foresee a rise in inventory or a drop in demand soon. If multiple new condominium structures are built, he believes they could be filled rather quickly, and the same holds true for homes priced around $500,000. The feasibility of new construction, however, is limited by the availability of sewer and water access, and less expensive homes can be difficult to build because the logistics demand extra cost to do so here.

Mackinac Island Realty has six homes listed for more than $1 million, including Cairngorn Cottage on the West Bluff, listed at almost $6 million. Luxury homes sometimes will take several years to sell, but that does not mean there is no demand. Sometimes it just takes more effort to identify the right buyer.

“It will happen eventually,” he said.

Two homes priced around $1 million have been sold in the last year.

Homebuyers come predominantly from Michigan and other Midwestern states, especially Illinois, Indiana, and Ohio. Many properties have been sold to people from other regions, and he is seeing increased interest from Florida, and some from Texas. Mr. Borst said the weather attracts southern buyers here, where they can escape the heat. In 2016, he sold a cottage on the East Bluff to a couple from Texas. There has also been demand from buyers in California and along the eastern seaboard, and Mr. Borst has sold homes to buyers from Germany, Canada, and England over the years, as well.

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