TCBN: 2025 Real Estate Outlook, Philanthropy and MUCH more

The December issue of The ticker Sister publication, the Traverse City Business News, is now available online and at newsstands.

Among the many stories in this action-packed issue is one that focuses on the year ahead in the local real estate market. TCBN staff asked several real estate agents to share their expectations for the coming year.

Below is an excerpt from this story. If you’d like to learn much more (including various stories about nonprofits and philanthropy, as well as several columns from local experts), pick up a copy or subscribe today!

What trends or developments (in sales prices, volume, demand, etc.) do you expect in local real estate in 2025?

Jonathan Oltersdorf: The affordability challenges and rising cost of living in 2024 should have slowed the real estate market, but we simply haven’t seen that to any significant extent. Inventory remains historically low, with Leelanau County still at a third of pre-COVID levels. Since the beginning of the year, our average price has increased by 5-6% and the average price has increased by 6-8%. Looking ahead to 2025, volumes may decline slightly, but I expect prices to rise moderately, more slowly, and in line with inflation. Nationwide, the average age of home buyers has risen by seven years, a trend that I also see locally. Homes with master bedrooms on the ground floor are in high demand due to an aging buyer demographic. Notably, 47% of this year’s sales in Leelanau were cash purchases, compared to 35% in GT County. Our market has remained resilient and I expect the same in 2025, with moderate price growth and strong cash purchases providing continued stability.

HollyHack: Interest rates and demand will continue to play a crucial role in shaping the real estate market in 2025, both nationally and locally. Nationally, existing home sales are forecast to rise over 9% compared to last year, while new home sales are expected to rise 11%. Locally, I expect a similar trend as property prices continue to fall, particularly in cheaper price ranges. This shift is likely to create more opportunities for first-time homebuyers who have faced significant challenges in recent years, particularly those relying on government loans. Interest rates are expected to stabilize and are expected to settle in the low 6% range, which should further support affordability and demand. In Traverse City, we are seeing a noticeable slowdown in the Airbnb market, particularly downtown, where saturation appears to have been reached. This slowdown could refocus investment attention on long-term housing options, which would further positively impact local demand.

Kevin Endres: According to the development we observed in the third quarter of 2024 compared to the third quarter of 2023, the commercial market shows an upward trend across the board in terms of total area sold (up 144%) and total volume sold (up 95%) and average Transaction sale price (+35%). We expect there will continue to be activity and interest in the commercial market in the Grand Traverse region in 2025. We are seeing strong demand in our market from national companies looking to locate in our region, including small retailers, quick service suppliers and regional distributors such as Amazon. Although we only manage commercial and development properties, we see continued strength and demand for properties for future multifamily developments.

TJ Shimek: Sales prices have begun to stabilize in the last six months of 2024. Homes are sitting longer, and that’s okay since inventory levels are up significantly compared to last year. I expect inventory levels to continue to increase slightly in 2025, making the market even more balanced for buyers and sellers. The market we have been in for the last four years has not been sustainable and we are currently in a much “healthier” market. I expect prices to remain fairly stable in 2025, but we always see a price increase and a more competitive buying market in the spring as many buyers emerge from hibernation after the winter and are ready to get back to looking to make at home. This leads to higher demand, which is why there are usually more multiple offer situations in the spring. This happened in 2024 after the market stalled in October 2023, and then there was a huge rally in March this year.

Jon Zickert: Demand has declined in all segments compared to 2023, but historically demand still exceeds supply in all price ranges. The condo market appears to have been the most active segment in recent months, but there are still offers in most areas, although there are not as many offers. Sellers need to be aware that many homes will be overpriced for the current market due to slowing demand. Next year we expect the number of homes for sale to increase by 5-10%, the number of home sales to also increase by 3-5% and property values ​​to also increase by 3-5%.

Ann Porter: We are so fortunate to live in such a beautiful area full of natural resources, community amenities and local pride, and I expect our wonderful region will continue to be a popular destination for both out-of-towners and current residents alike. On this basis, there should be a stable real estate market in 2025, with waterfront locations always being the most sought-after property type. With interest rates expected to remain the same and sellers looking to leverage their equity, inventory and prices will increase to a healthy equilibrium. We are experiencing strong climate migration, with buyers leaving an area with more drastic climate fluctuations and effects than usual, which will further increase demand. This will continue the trend of a seller’s market, but in a much healthier definition than what we saw during Covid.