Northern Michigan Real Estate
In the coming years. Northern Michigan's premiere communities are poised for continuing success in lifestyle enhancement and financial performance. Although one might argue that these sectors appear similar to the ups and downs of real estate, they are in actuality driven by completely different forces. To more clearly understand these distinctions, we offer the following commentary on world-class Northern Michigan property, which is rare and very limited in supply.
78 million baby boomers, representing one out of every four Americans, are increasingly demanding more travel, leisure, recreation, and vacation homeownership in their never-ending search for lifestyle enhancement and extended family-centered activities.
In a prior survey of 25,000 households with incomes over $200,000, American Demographics magazine listed a vacation home as the number one desired asset for the nation's most affluent households. As wealth continues to concentrate, these top 10% of families will drive demand for the "best of the best."
A study by the National Association of REALTORS® concluded that due to 'price elasticity characteristics,' world-class destinations had outpaced national average rates of appreciation by 2:1, with the only question being whether that trend will be reinstated now that the Great Recession is over. Affluent enthusiasts will always seek out sophisticated, diversified communities such as Northern Michigan, capable of meeting their recreational passions and quality of life criteria in a safe and politically stable environment.
Their long-running corporate strategy of stripping market share through capital expenditures on resort products, goods, and services is a proven success formula that will continue in the years ahead.
It is important to recognize that the economic engine driving most ski towns is ultimately the ski hills and the successes or failures of ski companies. Therefore, a vibrant, responsive operator who delivers quality and reliable experience will increase demand in the area and see the community prosper.
Since 1991, the compounded average growth rate (CAGR) for Northern Michigan's premiere neighborhoods has been just under five percent (4.88%). This appreciation trend line is bound to continue based on the premise of fixed supply and increasing demand. The US has 113 million households, with the richest 10% controlling nearly 70% of the wealth.
Imagine what would happen if that number were to double as a result of a larger worldwide customer base! The implications of this expanding international component are significant, and as with all multinational corporations, growing markets make for increasingly successful businesses and capital spending.
You can probably tell that I'm extremely bullish about the future of Northern Michigan real estate. As always, I invite your questions, comments, and interest in becoming part of this exciting transformation.
Now is the time to look at this unique and under-appreciated asset class while prices remain favorable and interest rates low. Don't hesitate to learn more about specific opportunities in our part of the world! I would be pleased to send additional information on this matter.