Fishing for vacation homes
In down market, second-home properties luring buyers
Saugatuck, Mich., has been a magnet for Chicagoans for years because of its beaches, trendy boutiques, art galleries and yacht harbor. (John Handley/ Photo for the Chicago Tribune / September 2, 2011)
About a third of buyers in Saugatuck, Mich., for instance, put their second homes in a rental pool, said to Laura Durham, owner of Mill Pond Realty in Saugatuck.
Up the road from Harbor Country, Saugatuck has been a powerful magnet for Chicagoans because of its trendy boutiques, art galleries, yacht harbor and beaches.
"Prices in Saugatuck are down 23 percent or more from their peak," said Durham. "Now there aren't many foreclosures left, and when they go on the market, they sell in a week. Prices range from $95,000 for a one-bedroom on the waterfront to $1.3 million for a house on the harbor, but the average is $375,000."
Six years ago, Northbrook residents Gerry and Suzanne Noonan bought a four-bedroom vacation home at Eagle Ridge Resort & Spa in Galena in northwest Illinois. The resort is nestled in the 6,800 rolling, wooded acres of Galena Territory, a planned residential and recreational community. Eagle Ridge has four golf courses, a lake and 2,205 dwellings, including 1,752 vacation residences.
"It's one of the most gorgeous parts of the state, more like North Carolina than Illinois," said Gerry Noonan.
The couple put their home in the rental pool the first year and broke even. But Noonan stressed the rental pool comes at a price:
"You are required to have a landline telephone and cable TV," he said. "Plus, there are the usual expenses of maintenance, association fees and taxes, all subject to increases."
The popular destination will have few, if any, foreclosures left by the end of the year, said Mike McCoy, managing broker of McCoy Real Estate Services in Galena. He noted that 80 percent of buyers are from the Chicago area.
"In the first half of this year, 142 houses on the market were listed at an average of $283,000 and sold at an average of $233,000," McCoy said.
Door County, Wis., often called the Cape Cod of the Midwest, is another hot vacation home spot for Chicagoans.
Connie and Bob Erickson, owners of Door County Realty, described the county as a blend of civilization and wilderness. "Those who buy vacation homes here have discretionary income and are looking for a family experience. We get 58 percent from the Chicago area," said Connie Erickson.
Some 220 waterfront and 650 inland properties are available in the northern part of the county, including Ephraim, Fish Creek, Sister Bay, Ellison Bay and Gills Rock, she said. Despite the high number of available properties, prices have declined only 5 percent to 10 percent in the last two years.
Dennis Starr, co-owner of ERA Starr Realty in Door County, affirmed the county has an oversupply of vacation homes, but he said prices have not fallen drastically like they have in Florida, Las Vegas, Arizona and California.
He noted that younger families tend to buy on the Green Bay side of the peninsula, while more affluent retirees favor the Lake Michigan side.