Northern Michigan Land Sales Fall

Northern Michigan Land Sales Fall
In response to a comment left by a reader to an earlier post, I decided to run some numbers on Emmet and Charlevoix County land sales. These sales include vacant land, lots, acreage, waterfront land and lots, and water access land and lots.

The number of land sales for the first three quarters of 2006 is down significantly from the same period last year. During the first three quarter of 2006, there were 222 sales with a total dollar volume of $28,586,258. The average sale price was $128,767 with a median price of $44,250.

For the first three quarters of 2005, there were 331 sales, with a total dollar volume of $48,904,506. The average sale price was $147,748, with a median price of $50,000.

So where do we stand compared to last year, in terms of sales of vacant land? Unit volume is down by almost 1/3, dollar volume is down over 41%, average sale price is down almost 13%, and the median sale price is down 11.5%.

These appear to be much larger drops than we have seen in the residential market this year. I'm not quite sure how to explain the large drop. Purchases of land may be more discretionary than purchases of homes. Certainly, residential building activity has fallen off considerably over the last year. Builders and developers are much less likely to be building homes on speculation. There are many brand new homes on the market just sitting, waiting for buyers, and an ample supply of available building sites. As a result, builder and developer demand for raw land and new home sites has probably decreased significantly.