Petoskey Real Estate Sales Collapse

The Petoskey real estate market appears to have collapsed in the first half of 2009, following a relatively strong first half the previous year. The latest sales numbers are abysmal. One can only wonder if these latest numbers signal a market capitulation or bottom, or whether things can actually get worse from here.

The number of Petoskey homes and condominiums sold during the first half of 2009 was down only 22%, from 120 units in 2008 to 94 units in 2009. I only have unit sales data from 2002 forward, and 94 units is the smallest number in the first half of any year in the last eight years. That is the good news.

However, the dollar volume of 1st half residential sales in the Petoskey School District tanked, from $47,001,605 in 2008 to $16,510,876 in 2009, a decrease of almost 65%! This dollar volume is the lowest number recorded since 2001, which is oldest dollar volume data I have available for a first half, when $24.6 million in residential sales was reported.

The average sale price for a Petoskey home during the first half of 2009 plummeted to $175,648 from $391,680 during the first half of 2008. Perhaps more importantly, the median sales price decreased significantly, from $180,500 in 2008 to $138,000 in 2009, a decline of 23.5% year over year, and a full 30% decline from what appears to have been the market peak median sales price of $197,090 for the full year 2005.

Of the 94 Petoskey homes and condominiums sold during the first half of 2009, it appears as though at least 41, or 43.6% of the sales, were bank owned foreclosures. I know that at least some of the remaining 53 sales were short sales, where the bank accepted less than what was owed on the mortgage to avoid foreclosure proceedings. I think that I am being conservative in my estimation that a majority of the sales during the first half of 2009, or over 50% of the sales, were either bank owned foreclosures or short sales. This is truly an astonishing number. Foreclosure sales are having a significant negative impact upon Petoskey property values and it is unclear at this time if the end to the foreclosure boom is in sight.

Note: Based upon sales information obtained from the Northern Michigan Multiple Listing Service for the period from January 1, 2009 through June 30, 2009.

Petoskey Schools Athletic Facilities Proposal Defeated

Voters in the Petoskey School District resoundingly defeated a $15 million bond proposal to construct a new school athletic complex by a margin of 2,457 - 1473.

I was actually quite surprised late last year when the school district released the results of a survey showing that the public would support funding such a proposal, given the current state of our state and local economies. Apparently my skepticism of the survey data was warranted.

The Traverse City Record Eagle ran a story on the defeat, pointing to the weak economy as a major contributing factor to the outcome. I would have to agree with their assessments. The fact that we have lost a number of local employers recently has people concerned. In trying times like these, people are hesitant to commit to spending money on anything which is not deemed to be absolutely essential. The voters apparently saw this proposal as a luxury which cannot be afforded at this time.

Petoskey Favors New Football Stadium?

According to an article in today's Petoskey News Review, Petoskey School District voters are supportive of a new millage to develop and operate $15 million worth of new school sports facilities. This according to Lansing-based polling firm EPIC-MRA, which surveyed 300 district residents from Nov. 11-14, and found that a majority of those surveyed (57%) supported the idea.

School officials are apparently considering new football, track and soccer facilities at the south end of the Petoskey High School/Petoskey Middle School complex. The proposed new taxes would cost the owner of a $200,000 home roughly $79/year.

I found these survey results to be quite surprising, given the current weakness in our local economy. So I thought it would be interesting to conduct my own survey. (I have been looking for an excuse to have a survey for a while now). So here's your big chance! Please click on the link below to complete the survey.

Petoskey Schools' Sports Facilities Improvement Proposal Survey