How Much Is That Lakeshore?

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When we last took a snapshot of the Lake Superior real estate market three years ago, buyer confidence was still shaken by the bursting of the housing bubble and the financial crisis that followed. The market was slow, prices dipped, and many would-be buyers deferred their Lake home dreams.

But that’s not the case anymore, say Big Lake real estate agents.

“Buyer confidence has definitely come back to Lake Superior,” says Kim Wolff of Timber Wolff Realty, based in Lutsen, Minnesota. “Homes that were listed several years ago and just kind of waited things out, those have now sold.”

All around Lake Superior, the market for waterfront homes – whether primary residences, seasonal homes or cabins – has returned, if not quite to pre-recession levels.

On the Lake’s northwestern shore, Wil Salo from Team 100 Realty in Thunder Bay says, “In 2008 we had a rollback of prices for a while. That has pretty well recovered now. The area around Thunder Bay is strong for Lake property, especially in the mid-price range.”

“Those second-home buyers are finally coming back,” adds Ginger Stroube from Re/Max Douglass Real Estate in Michigan’s Keweenaw Peninsula, where many snowbirds roost during the warmer months.

Good weather this summer helped. “The numbers seem to be definitely active these last two months,” says Maxx Anderson, an agent with Smith & Company in Sault Ste. Marie, Michigan. “We’ve had such a stellar summer that we tend to have people more motivated, I think, to look and buy waterfront properties in particular.”

Kathleen Russell runs Apostle Islands Realty in Bayfield, which has a long history as a seasonal destination for city-dwellers from the south.

“We can see a return and a rebound for properties with homes on them. If they’re in good condition, and they’ve been updated, there’s definitely more of a demand now than there has been two years ago, three years ago.”

The seasonal market is not the only one on the rise.

The Lake Life

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How Much Is That Lakeshore?

Re/Max Douglass Real Estate

How Much Is That Lakeshore?

Even just within Michigan’s Keweenaw Peninsula, the type of beach (and the corresponding asking price) can vary significantly. Buyers who enjoy lounging on the sand might like Cedar Bay west of Calumet.

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How Much Is That Lakeshore?

Re/Max Douglass Real Estate

How Much Is That Lakeshore?

Rock pickers might find their haven less than 15 miles away on Five Mile Point Road.

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How Much Is That Lakeshore?

Re/Max Douglass Real Estate

How Much Is That Lakeshore?

A pebble-covered beach off Five Mile Point Road.

For many recent buyers, Lake Superior is more than a destination. It’s their new home.

“Around Bayfield the last six to 10 months,” says Kathleen, “we have had more people buying who are going to treat the home – or land and future home – as their primary residence or a place they would spent nine to 10 months of the year.”

Other real estate agents around the Lake say they’re also selling more lakeshore properties these days as primary residences, not just as vacation homes. Some buyers are locals, moving close to the shore before prices climb too high; some are retirees, finally making a slice of the lakeshore their own.

Wil says the market for Lake Superior homes and vacant lots within commuting distance of Thunder Bay has picked up significantly, perhaps with a surprising twist. “The buyers we’re running into are primarily from our own region.”

Maxx in Sault Ste. Marie says, “The islands, like the Sugar Island and Drummond Island type of thing, they tend to be the seasonal homeowner, the second home. But most of our lakeshore area and river area are year-round homeowners.”

Moreover, the market has started to turn over in Sault Ste. Marie.

Older folks are selling their “Up North” summer homes and staying south, providing opportunities for boomers and younger generations to move onto the waterfront. Because many of the homes haven’t been updated in decades, they’re more affordable, too.

“We’re marketing lifestyle more than the home itself,” says Maxx. “Beautiful sunsets, sunrises, fires on the beach, that sort of stuff. (Homeowners) know they can fix ugly – they can do carpet, they can do paint – but how can we live there?”

On Minnesota’s North Shore, meanwhile, Lake Superior parcels have been selling like hotcakes to future retirees who want to make the Big Lake their year-round or most-of-the-year home.

“They may be three to five years away from retirement and they’re taking advantage of things before the prices go back up,” Kim says.

It’s a revival of the homesteader option: Buy a vacant Lake lot now, before prices climb higher, and build on the property as money and time permit.

Over on the Bayfield Peninsula, Kathleen has seen similar trends.

“Part of that is influenced by property values having declined enough. And then some retirees, or people who are moving even from within our own area from elsewhere, have seen enough appreciation in what they are selling that they can buy here with the lower prices.”

Jon and Gloria Gottschalk, retired cranberry farmers from Phillips, Wisconsin, are one such couple.

They got hooked on Lake Superior in 1993 during a day trip with friends to the Wisconsin shore.

Before selling their cranberry business in 2009, Jon says, “we had a 45-foot motor yacht that we’d spend weekends and as long as a week at a time on, while we still had the business. We’ve always been water people. Obviously, cranberry people are water people. Really the draws up here were the islands and the beauty of Lake Superior. We enjoy the sea caves, we enjoy the lighthouses.”

In retirement, they bought a townhouse just south of Bayfield, where they lived for 6 years. This spring they moved into a custom-built Lake Superior home along the Brownstone Trail, with plenty of room for hosting guests. Their boat, at Pikes Bay Marina, is just a quarter-mile away.

Price Per Frontage Foot

When browsing listings for that perfect lakefront property of your own, the price per frontage foot can be a useful starting point.

It’s important to find out why a property carries a particular price tag, though. Buyers should look beyond the simple measurements, like amount of shoreline footage, and evaluate the property according to their own needs and desires.

“It depends on how spacious the parcel is, how much frontage, how deep it is from the road to the Lake, and then the type of shoreline,” says Kathleen. “And even the vegetation, and does it contain wetlands.”

On the rugged Minnesota North Shore, walkable ledgerock commands top dollar.

“So if it’s 200 feet of cliff shoreline – meaning it’s not accessible – with a nice cabin on it, it could sell for $300,000,” says Kim from Timber Wolff. “And then half a mile away, 200 feet of shoreline with nothing (built) on it, we just closed for $417,000 – but the shoreline was accessible, and it’s really nice.”

On the sandy south shore, inviting beaches are prized. Kathleen says that properties with steep banks or minimal beach are typically priced at the lower end for waterfront, though they still offer plenty of charm.

“You hear the shore, you sense the waves and the wind, and you know you have a great view, but it’s valued differently than the beautiful sand beaches that you can walk down and play in,” she says.

If easy access to the water isn’t a priority, you could save quite a bit.

What’s adjacent to a property matters a lot, too, says Kim. Access to trails and bike paths, like the North Shore’s Gitchi-Gami State Trail, boost the value.

That was a draw for the Gottschalks. “My wife really likes the Brownstone Trail and likes to walk for a couple miles on the trail,” says Jon.

All of those factors are hidden in the frontage-foot price, Kathleen explains.

“It’s not so much the price per front foot as it is what is someone willing to pay for the parcel.”

Lake Levels

Savvy visitors and residents of our region know that Lake Superior, despite its monolithic appearance, is no static thing. Its vast waters rise and fall over the years, submerging and revealing rocky features and sandy shore.

Lake Superior’s water level has been well above average for a few years now, which can alter the selling price of waterfront property. Properties that earlier in the decade had expansive (and valuable) beaches might currently only have strips of sand. The high water can also cause erosion, an additional knock on a property’s value.

“It’s definitely a factor this year,” Kathleen says. “The seller might tell you that there’s sand beach, but if it’s below water level … Your picture says it all, and it does not show the beach. And you can’t convince somebody.”

When the water level drops back down – and it has been trending that way – that attractive frontage will return.

Even the rocky North Shore changes according to the Lake’s whims, Kim says. “During a nor’easter, there might be a nice deposit of sand and rocks, and then next week it comes from the southwest and that beach is gone. So we talk to buyers about that. … Hey, this comes and goes, so just try to understand you’ll have the ledgerock, but sometimes you’ll have a sandy beach, too.”

Ontario Bargains

One area that may soon see an uptick in vacation home purchases is the Ontario shore. Thanks to the favorable exchange rate, U.S. buyers can scoop up Canadian property at effectively a 25 percent discount.

Prior to the 2008 crash, says Malcolm Clark of Thunder Bay-based Avista Realty, “we were selling all kinds of stuff to Americans.”

Lovely areas on the Ontario shore are just an hour away from popular hotspot Grand Marais, Minnesota. Over in Sault Ste. Marie, Michigan, Canada is just across the International Bridge.

“It’s becoming more attractive right now for American buyers to buy in Canada,” says Wil from Team 100. “But we haven’t seen much of that yet. It’s a little bit early.”

The buying process is the same for U.S. and local buyers. Americans will encounter additional hoops, though, when selling a Canadian property.

Some locales just outside popular destinations can be great values. Inventory in the Lutsen and Grand Marais area gets snapped up, but less than 30 minutes farther up the shore, “There are some beautiful homes with accessible shoreline,” says Kim. “A buyer can really get a huge bang for their buck in the Hovland area. They will be very pleasantly surprised by what they find there for the additional drive.”

Extra driving can’t be all that bad because, as we all know, any drive beside the Big Lake has its own priceless value.

MINNESOTA

On Minnesota’s North Shore, undeveloped waterfront land often sells for $1,500 to $2,000 per frontage foot.

MICHIGAN

Keweenaw Peninsula lakeshore undeveloped lots typically go for $400 to 800 per frontage foot. Wide sandy beach in the western U.P. sells for similar prices. In the area around Marquette, per-foot costs range from $800 to as high as $2,000. In Sault Ste. Marie and parts west, including Whitefish Bay, it’s $500 to $1,000.

WISCONSIN

Undeveloped lots in the Bayfield area go for $500 to $1,000 per frontage foot. The low end can dip down to $400 for some shoreline on the western half of the peninsula.

ONTARIO

In the area around Thunder Bay, the going price is $750 to $1,000 (CDN) per frontage foot. More isolated properties along the northern shore, including island lots, sell for less than $500 (sometimes well below). Lakeshore land around Sault Ste. Marie goes for $500 to $1,000 (CDN) per frontage foot.