Is There a Market for Upper Bracket Homes in Bayfield & LaPointe WI?
That's a good question, and the answer may surprise you.
About a month ago, one of my clients asked me point-blank, "Is there really a market for upper-bracket homes in this area?"
Without disclosing the details, I can say unequivocally that there have been showings and offers in the past two months on homes priced at over $500,000. Despite a lull in top-bracket home sales on both Madeline Island and in Bayfield (WI) since midsummer of 2015, we have continued to receive showing requests for homes priced between $500,000 and $750,000. An offer was recently written and submitted to a seller, and two other parties are contemplating an offer on a waterfront property in the area.
One offer that came in during the past two months (at approximately 94% of list price) was countered by the seller. Another prospective buyer contacted us at the end of December 2015 to request a showing of the same house.
Notice when I speak about the local market for upper-bracket homes, that I am referring to both Madeline Island and Bayfield, Wisconsin. I have overheard local agents on both sides of Chequamegon Bay grumbling about the "nonexistent" market in luxury properties over the past six months, but I recommend that the readers of this post not be fooled by that kind of talk.
Remember at the same time that it's still a razor-thin market for these LaPointe and Bayfield homes over half a million dollars. If we hear from two or three or maybe even four prospective buyers during a year's time about buying, that is good. We simply don't expect to see properties in that price range selling at a rapid clip. So I remind sellers to think twice (or thrice) before they tear up a less than full price offer for their home in a huff.
What will it take for a seller to succeed in this market climate?
Sellers of these luxury homes in Ashland and Bayfield counties need to understand that it takes patience, stamina and a willingness to negotiate if they hope to be successful. There are no shortcuts to achieving that result.
Our housing stock in the northwest Wisconsin vacation homes market is aging. New construction has slowed quite a lot in the past nine years. The result is that resale homes in this area make up the majority of our inventory and few of those come to the market in excellent condition. There's a tendency among vacation home owners to let things go over time, to hold off on repairs like re-roofing or replacing windows, or painting/sealing exteriors. This makes pricing at the top of the market a real challenge.
We meet many more existing homeowners who wish to sell than buyers who want to buy. The market supply of available vacation homes isn't a glut, not yet anyway. But in the next ten to fifteen years, is is easy to see why that might occur. Sellers need to compare their home for sale to those offered by neighbors before they put their home on the market. Success is about knowing what the competition is selling and then pricing accordingly.
So once again, is there a market for upper bracket homes in Bayfield & LaPointe WI? We would conclude that the silver lining in this partly cloudy situation is that buyers for upper bracket homes do exist and they are still willing to consider paying the price in order to acquire a prized Lake Superior waterfront home.