Depressed prices spur sales of getaway cottages - The Detroit News

But not all regions are seeing progress, most prices remain discounted, and more buyers are paying all cash. Realtors Sales have risen in many areas, ranging from the lower west side to the northwest tip of the Lower Peninsula to the eastern Thumb, Realtors said. But others, like the northeast counties atop Michigan's hand, are still reeling from foreclosures and dropping prices. It is seeing a burst of vacation home construction even as it grapples with a glut of properties for sale. The city of 3,111 has a whopping 351 properties for sale, according to Trulia. There are plans to build condominiums on the lake's edge and another marina and condominium development on the edge of the city. About 60 percent of the homes in Boyne are cottage residences — meaning they are not the owner's primary residence and are used mainly for vacation. There's people who lost jobs and so lost their homes. The median price dropped to $150,000 last year from a high point of $204,100 in 2005, the group said. Real Estate agents say Michigan's second-home market has picked up, even if homes aren't selling as well as they were before the recession. In 2009, the area had more than 5,000 listings compared with about 3,000 now. More houses were sold in 2010 than the prior two years combined, Pontius said. But vacation housing sales in some parts of the state appear more volatile than for primary residences. Across the nation, foreclosures accounted for 11 percent of vacation home sales in 2010, compared with 5 percent of primary housing purchases, according to the National Association of Realtors. Flooded inventoryBoyne City reflected the economic turbulence as Ross gave a recent tour of the area's real estate. Ross pointed out a condominium offered for as low as $35,000. And a small, empty bungalow is now priced at $75,000 — half of what the former owner still owes on it. Sales in Boyne City are consistent with last year's levels after two years of being flooded with inventory, Ross said. But one segment remains stagnant: the $200,000 to $400,000 range. Richard Moden, 58, bought a property 11 years ago with his two brothers just outside Boyne City. The problem is that young workers have difficulty getting loans to buy houses even at discounted prices, he said. But the higher-end homes are not out of reach for a growing number of out-of-state buyers, Ross said. Paying in cash prevalentAll-cash purchases have become more prevalent nationwide: 36 percent of vacation home buyers in 2010 paid this way, the National Association of Realtors said. The Traverse area has experienced a rise in all-cash purchases, Pontius said. Many buyers pay cash on houses up to about $1 million to avoid high or difficult bank mortgages, Chambers said. In 2009, nine of the 34 lakefront properties purchased were all-cash sales. Last year and so far this year, almost half of the lakefront homes have been cash sales, Chambers said. The second-home market is struggling because many people can't afford an approximately 30 percent down payment required for vacation homes, up from levels of 10 to 20 percent two years ago, said Beth Foley, president-elect of the Michigan Association of Realtors. Foley is based in the Holland area in the lower western part of the state on Lake Michigan, where she said more people are taking advantage of lower prices for waterfront properties and converting them into primary homes. Artrip used to sell vacation homes but now is in the foreclosure business because that's where the sales are. She said about 10 percent to 15 percent of vacation homes in her area are foreclosing. Metro Detroit customers, who comprised about 80 percent of Artrip's business, no longer can afford vacation homes, she said. The city has 351 properties for sale while at the same time it is seeing growth in home construction. Many buyers are finding deals on vacation homes as properties are foreclosed on or sold. This single-family home at the Homestead Resort is 2,800 square feet and has four levels.