Is There a Market for Million-Dollar Plus Homes on Madeline Island?
Like many second home and recreational markets around the country, we have our share of large, elegant, expensive homes on Madeline Island.
Most people never gave a second thought to resale when they built these homes. Some are elegant old mansions that were built for a lifestyle popular in the early to mid-twentieth century. Others are large, luxurious and built within the last decade or two.
Today, we're faced with sellers who want top dollar for these homes. And finding those buyers is a big challenge, for several reasons:
The luxury lakeshore home buyer for a Madeline Island home is typically buying a vacation home, rather than a year-round residence. Second homes are a luxury, not a necessity.
Jumbo mortgages are not easy to find in this market, and it's even more difficult to find appraisal comps that will support a jumbo loan. At present, we don't have any qualifying comparable sales over a million dollars in this area. That means a buyer in this bracket will likely need to pay cash.
Even the high-end buyer seems to be shopping for a bargain these days.
Some of the older mansions on Madeline Island were not built by today's energy standards, without manufactured doors or windows, lacking in proper insulation and so forth. Obtaining a mortgage for these problems is, at the very least, a challenge. More than likely, the buyer would not be able to obtain financing, even if there were comparable sales available to support a jumbo loan.
The buyer of a million-dollar summer home or second home on Madeline Island is facing a property tax bill in excess of fifteen or twenty thousand dollars per year. That's a hefty tax bill for a home that will likely be inhabited six months per year at most.
So before you price any home on Madeline Island over half a million dollars, there are questions that need to be answered.
- Is there a market for what you're selling?
- Is the home in move-in condition? Is it a year-round or seasonal dwelling?
- Would the buyer have any chance of obtaining a mortgage?
The answers to those questions may go a long way towards helping you to determine an appropriate list price.