Market for North Woods vacation homes is rebounding
For generations in Wisconsin, families have taken summer vacations at their lakefront or wooded property "Up North" — pine-enveloped retreats away from the grind of the cities where they spend most of their time.
Year after year, as they water-skied, fished, canoed, sunbathed or swam, many property owners felt like they had an asset whose value was sure to grow over time.
But just like residential real estate almost everywhere during the housing slump and extended economic downturn, North Woods homes from cabins to luxurious lodge-like estates saw their prices fall as the extra income or wealth needed to support the market decreased.
Also like the rest of the real estate world, the housing market in Wisconsin's north region slowly is making a comeback as the economy recovers.
Sales last year topped the number of homes sold before the housing bubble burst in 2007. However, homes prices, while climbing again, still are off the 2007 median by 13 percent — and much more for many higher-end dwellings.
"We've seen some pretty consistent growth in that part of the state once you account for volatility that just comes from the weather," said David Clark, a Marquette University economics professor who analyzes state home sales and price data for the Wisconsin Realtors Association.
The median sale price of $120,000 in Wisconsin's north region in 2013 was up 4.3 percent from its low point of $115,000 in 2011, and sales generally have tracked with the state as a whole.
Legacy homes for sale
Some real estate brokers have noticed a couple of new wrinkles in their market, though, as it recovers. More young members of families that have vacationed at the same place on a northern Wisconsin lake for years aren't interested in taking over the property — and the expense and work that come along with it — from their aging parents or grandparents.
It's not a wholesale trend, but it's clearly evident, said Michael Mulleady, general manager of Coldwell Banker Mulleady Inc. Realtors in Minocqua.
"They are selling them off for the simple fact that nobody wants to pay the taxes or do the maintenance — putting the docks in, having the placed plowed," Mulleady said. "We're not seeing as many families continue the tradition of maintaining a family home or a family compound."
Erik Johnson, broker-owner of Re/Max First LLC in Minocqua and current president of the Northwoods Association of Realtors, has seen it, too.
"We are seeing lots of families actually selling after mom and dad have either passed away or can't take care of the place," Johnson said. "The kids loved it while the parents were paying the bill, and came up and had fun, left and the parents cleaned up. That group of parents loved doing it for their kids and grandkids."
He said that with children busy with sports commitments closer to home and other scheduled activities all summer, time is cut short for the journey north.
On the other hand, more of today's buyers are making their "Up North" home a year-round destination rather than just a summer vacation spot.
"We're seeing people buying properties up here and then winterizing them," Mulleady said. "I think a lot of it is due to the price that they're paying — that they want to get a full year's use out of them instead of just for the summer. The new buyers are tending to come up and want to cross-country ski, snowmobile, boat, canoe. They want to use their property year-round."
In the 17 years he's been working in the market, Johnson said, the buyer profile hasn't changed much — even if more longtime family legacy homes are going up for sale. He said baby boomers still look to the north for a second home or vacation home. Some see it as a place to retire, as well, he said.
Pricing 'sweet spot'
While the median price of $120,000 reflects the midpoint of all sales last year, there is a wide range of home prices and styles.
The March-April edition of Northwoods Home Showcase magazine lists, for example, a $25,000 two-bedroom mobile home away from water as well as a 10,000-square-foot luxurious, furnished lodge-like estate with 400 acres of hunting land for $3.2 million.
Mulleady said for his firm, which has offices in Rhinelander, Eagle River and Manitowish Waters as well as Minocqua, the "sweet spot" right now is homes on lakes of 100 acres or more that list for $350,000 or less. Not long ago, they sold for more than $400,000, he said.
"If they can find something $350,000 or less, you can't keep enough of those in inventory," Mulleady said. "Those are hard to come by."
But there is "heavy inventory" of homes in the range of $600,000 to $1 million, he said.
Johnson said buyers are looking for lake homes in Oneida and Vilas counties, where prices have been pared considerably from pre-recession levels, and last year had an average sale price of $307,000. He projects a rise in prices of 3 percent to 5 percent this year.
Johnson said some buyers look for years before they purchase a place up north.
"Buyers are looking, and back," Johnson said. "They are looking for good values and they are finding them."