Here’s the Scoop on the Second-Home Market Spike

The resort-home communities of Michigan, Indiana, and Wisconsin are known for being popular vacation destinations for Chicagoans. But their appeal isn’t limited to summer getaways, and that was never more apparent than when COVID-19 hit this spring. Many people with second homes in the area chose to shelter in place there. Others were inspired to find a retreat in the area once restrictions lifted and market activity picked up.

So what has been the impact of this renewed interest in Southwest Michigan, Northwest Indiana, and Southeast Wisconsin? We spoke with @properties vice presidents of brokerage services Don Shea (Wisconsin) and George Schultz (Michigan & Indiana) to get the scoop.

@home: What has the market been like in Southeast Wisconsin this summer?

Don Shea: As with most of Southeast Wisconsin, Walworth County is extremely active. In Lake Geneva, there has been a surge of home sales, with contract activity up 45.5% and sales up 48.1% year over year in July. Months’ supply of inventory in Lake Geneva was just 2.4 in July – a 56.7% decrease from last year. Meanwhile in Twin Lakes, it’s almost been exclusively second-home purchases, and many owners have been camped out there since March.  With inventory levels so low, multiple offer situations are commonplace, and buyers are more willing to accommodate seller requests (pricing, contingencies, etc.) in order to secure the property.

@home: And what about in Southwest Michigan and Northwest Indiana?

George Schultz: Given the pandemic and the stay-at-home order that restricted real estate activity in Michigan, there was a clear slowdown in Michigan home sales during the spring. As the state opened back up and real estate activities resumed, we began to see a significant increase in the number of homes under contract. In July, contract activity in Southwest Michigan increased 61.6% year over year, and sales were up 53%. It’s a similar trend in the resort-home towns of Northwest Indiana.

@home: Why are more buyers moving to these areas now compared to previous years?

DS: More and more people are working from home and have the ability to do so long-term. The idea of sheltering in place is much more appealing for a lot of people when you have outdoor space, natural surroundings, less people around, and room to set up work or online school.

GS: Home has taken on an entirely new meaning, and not having to go into the office everyday has been a huge factor. The “vacation” home can and most definitely has become a “forever” home for some, especially as buyers look for space that’s functional and comfortable.

@home: What has drawn buyers to these areas?

DS: Having a lake house or second home is something people dream about when they get to the point of having the means to purchase one. The pandemic really focused people on that goal and drove activity in these second-home markets.

GS: People have certainly moved up their timelines to have a home in the country, whether it be for the weekends, the summer, or, in some cases, permanently. One of the indicators that people are looking beyond just second-home use is that we’re seeing strong activity in towns that, traditionally, aren’t just resort towns, like Crown Point and Schererville, Indiana, and St. Joseph, Michigan. The lower taxes, space, and easy commute to the city are big draws.

@home: Do you expect this level of activity to continue in the long term?

GS: The pandemic is driving the current growth of these second-home markets, and it will have a lasting effect on those areas. We won’t see growth like we’ve seen indefinitely, but I do think the momentum from this year will carry into 2021.

DS: The real estate market in Southeast Wisconsin has been strong for a few years and pricing has increased due a shortage of second-home inventory. However, the activity within the last several months is a direct result of COVID-19 and people’s desire for more space. We expect there to be strong interest from second-home owners in the long-term as wants and needs change and people seek more space.

For more information on the Southeast Wisconsin, Northwest Indiana, and Southwest Michigan markets, contact an agent today.