Lake Vermilion Real Estate

One of the more popular questions related to the value of an undeveloped lake shore parcel is “What’s the current price price per foot of this lakeshore?”.  I believe the best answer to that is a politician-style non-answer.

Why?  Because there is no absolute number that is an accurate response.  There is no place to look up the current price for a foot of Lake Vermilion lakeshore frontage.  Any firm number offered as an answer to that question is a fictitious statistic.

That’s my opinion.

The value of any individual undeveloped lakeshore parcel is influenced by the numerous physical facts of that parcel.  It’s much more involved than a “current price per foot”.

Typical factors that may influence value include: Location (on the lake and on the road), topography, size, shape, tree cover, privacy, seclusion, lakeshore quality, direction, ability to support improvements, access to utilities, and others.

It is verifiable that overall lakeshore property values are trending downward. (See the following graph.)  But just because the current average value per foot is X amount of dollars does not mean that every parcel has that approximate value.

For the 7 year time period illustrated in the graph the average variance from highest price per foot to lowest price per foot is $513 for water access lots and $1,265 for road access lots.  That makes it very hard to answer the “price per foot” question with a finite number.

The beauty and attraction of lakeshore property is the individual and subjective qualities of any given parcel.

Overall prices are down but individual value remains unique.

Here’s a snapshot of the Lake Vermilion real estate market as of this day… 9/14/2011.

There are currently 223 properties offered for sale.  That group includes all Lake Vermilion property types including land, homes, and cabins.  Those listings have a total asking price value of $80,006,339.  The lowest priced listing is $32,500 and the highest priced is $2,865,000.  The average listing price is $358,773.  The average days on market is 493 days.  The range of days on market is from 0 days to 3431 days.  8 listings have a Buyck, MN address, 78 have a Cook, Minnesota address, and 137 have a Tower, MN address.  Of the total group, the average current asking price has been discounted 11% from the original asking price.  The discount range for the total group is 0% to 51%.  44% of the group are currently offered at their original asking price.  Every letter of the alphabet is represented by the first letter of the Seller’s last name except the letters I, X, and Y.

Now you know.

Turning the corner!

Here’s the August graph that compares year to date completed sales activity for all transactions on Lake Vermilion (including homes, cabins, and lots) since 2005.

August 2011 was a historically typical month.  Comparatively, there were no significant changes from July.

I would describe August as a posturing month.  This race will be won or lost in the next two months.  I know this…  2005 had breakaway sales activity late in the selling season.  It’s tough to see any year, including 2011, keep pace with 2005.

I will offer this prediction.  2011 will pass 2010.  If so, I say it’s a good indication the local real estate market continues to steadily and very gradually improve to historically normal activity levels.

Please let me know if you have any questions about this information. Your comments are welcome, too.

Happy Labor Day!

Every year Summer’s last holiday brings it’s expected offering of cooler nights, shortened days, and pleasant colors.  There is the strong element of change and an increased sense of urgency.

Our real estate market, in recent years, has seen activity levels increase with the late Summer change of seasons.

For Buyers, I think this time of year increases the need for direction and decision.  There are several issues that might influence a late Summer buy or wait decision.   Among those issues are: 1) Are market prices favorable? 2) Will financing rates remain low? 3) Will inventories stay high?

At this time, on Labor Day 2011, I believe only one of those issues should concern hopeful Buyers. Buyers should know that issue number three, a strong inventory, is a temporary advantage, especially in a market like the Lake Vermilion area market.

I know there are numerous Buyers with similar mindsets.  They have searched.  They have selected.  They are watching.  They are waiting.   They are going to buy when the time is “right”.  The greatest risk for these Buyers is not higher prices or higher interest rates.   Their risk is that someone else will act first.  Someone else will buy that cabin, home, or land on their list.  The inventory will decrease by only one but it will be the one that was on their list.

A sense of urgency has been missing from the real estate market place for quite some time.   A balanced market requires some degree of urgency.  I know a touch of urgency would be a welcome addition for at least half of those in the market place.