When asked how real estate sales were doing this summer,” Grand Marais realtor Terry Backlund of Backlund Realty summed it up with two words.
“Crazy, crazy,” he said. “The number one thing I’m hearing from buyer is, ‘If I can work from anywhere, I may as well live somewhere beautiful.’”
Low lending rates have prompted buyers to look for homes and cabins on the North Shore. Some are local residents seeking a new home. Others are folks from the Twin Cities and elsewhere who are contemplating moving to the North Shore, because they can work remotely. Some seek a weekend retreat. Others are looking to purchase properties that either are or can be converted into vacation rentals.
“Real estate in Cook County is booming,” said Kim Wolff of Timber Wolff Realty. Buyer confidence is very high.”
Wolff’s remark may seem counter-intuitive in the midst of a pandemic and record unemployment nationwide. However, not everyone is out of work. Travel, especially by air, is very limited due to the pandemic.
“People want a vacation place they can drive to rather than fly,” Wolff said. “Most of our buyers are from Minnesota, but we’ve been getting buyer leads from all over the country.”
As always, the strongest market is homes and cottages on Lake Superior, which are typically among the most expensive properties on the North Shore. One aspect of the market that has picked up this year are homes and cabins on inland lakes. So, too, have homes in Grand Marais. The flip side of booming activity is a reduced inventory of properties available for purchase.
“Residential housing is slim pickings,” said Virginia Detrick-Palmer of Coldwell Banker North Shore. “Prices are going up and we are seeing more multiple offers.”
She predicts Cook County may see a small uptick in permanent residents. She’s seeing younger people who are considering relocating to the North Shore, because they can bring their jobs with them.
“Thank God we have broadband,” she said. “It makes a difference for buyers who are considering working remotely.”
Vacant land still moves slowly on the North Shore, due to the high cost of construction.
“The expense of improving land and then building catches up with us,” said Mike Raymond of Red Pine Realty. The buyers who are looking at vacant land are price shopping.”
Commercial property is also sluggish. While downtown Grand Marais has a number of vacant lots, they are not attracting much interest, again likely due to the high cost of developing them.
“I’ve seen people look at land, then look at the cost of building and then purchase a home instead,” said Backlund.
However, one business that appears to be growing is vacation rentals. Realtors remarked that they are seeing buyers who are interested in income-producing properties. Properties that can become nightly rentals are “hot.”
The numbers show it’s been a busy summer for real estate sales. Steve Surbaugh of the Lutsen Real Estate Group also sits on the board of directors for Grand Marais State Bank.
“This July was the busiest in the last six years, based on the number of transactions,” he said. “Buyers are not just kicking tires. They’re serious.”
Surbaugh provided data based on MLS listing for recent years. At the time of this interview in mid-August, he said there were 35 pending sales.
All of the real estate action has slowed the time it takes to make a transaction. Appraisals, which typically take two weeks, are taking five or six weeks. This is due to real estate sales, but also the large number of folks who are refinancing mortgages to take advantage of low interest rates.