Home prices hit 15-year low in Traverse City, Mich.
— -- Traverse City, Mich., which claims to be the Cherry Capital of the World, seems like a world away from Detroit.
Unlike the Motor City, which is home to the struggling auto industry, Traverse City is a pristine corner of northwest Michigan that stretches along the shores of Grand Traverse Bay. It is the largest city in the region, and employers range from wineries to a major medical center.
For years, first-time home buyers and vacation-home buyers have been drawn to Traverse City. Still, the housing market has been hit by the mortgage crisis and the crumbling economy: In February, home sales were down 17.4% compared with the same month in 2008. The median home price last month was 8.5% lower, pushing prices to their lowest in 15 years, says Mary Janik, president of the Traverse Area Association of Realtors.
Foreclosure has been one cause, though filings have slowed. The rate has dropped to one filing for every 468 housing units in the first two months of 2009 from one in 360 the last two months of 2008, according to RealtyTrac.
Many of the filings have been caused by job loss. The Traverse City area is known for its tourism and manufacturing base, but it also has a number of local automotive suppliers. They have been dragged down by the auto industry, says Tino Breithaupt, senior vice president of economic development at the Traverse City Area Chamber of Commerce.
Tower Automotive, for example, is shutting its plant, affecting 358 workers.
High-priced vacation homes have been affected because many auto company executives own them, says Rick Matley, a local real estate agent. "When they started losing their jobs, their second homes had to be sold, and so the prices have been lowered," Matley says.
Now waterfront properties are starting to attract buyers from Ohio to Illinois who want a vacation home. And first-time home buyers are finding great deals and low mortgage rates.
"The activity isn't what it was a couple of years ago," Janik says. "But we are seeing improvement — a nice and slow and steady progress."
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