The worst economic shock since the Great Depression didn't dampen demand for luxury homes in Michigan in 2020, despite the COVID-19 pandemic and business shutdowns that changed the way many would-be buyers picked a new house. (Can't see the full story? Sign in or subscribe)
Wayne, Oakland, Macomb, Washtenaw and Livingston counties together totaled 453 homes that sold for more than $1 million last year, according to data company Realcomp — a 15% increase over the year before.
“The 2020 market was tremendous across all price points, and we are seeing that trend continue into 2021,” said Meredith Colburn, an associate broker with Birmingham-based Hall & Hunter Realtors. “Luxury home buyers have continued their search for properties that provide a multitude of amenities allowing for total ease of day-to-day living.”
Home sales in Michigan in 2020 topped out at $9.5 million, according to the multiple listing service. Multi-million sales include a contemporary Lake Michigan estate in Montague, a newly constructed Grosse Pointe Shores estate and a contemporary-style home in Birmingham overlooking a lake and a waterfall.
There's the whitetail deer hunting preserve sitting on 2,280 acres, another with a state-of-the-art gym and movie theater, another featuring five barns, a treehouse and a boathouse — and that's just from the less expensive of the expensive homes sold in Michigan last year.
Another outside Grand Rapids is the buyer's own "Club Med," complete with two kitchens, a wine cellar and lots of bathrooms. And then there's a posh property overlooking Lake Michigan with separate two-bedroom cottages.
“For the luxury perspective, it was really a surprising market to me last year,” said John Apap, real estate agent with Signature Sotheby's in Birmingham. “When they shut us down, we thought it was going to be one of our slowest years ever. And then once the governor opened it up on May 7th, we haven’t stopped.”
A lack of inventory at many price points continues to weigh on home sales in Michigan, and that includes the luxury housing market. It’s a trend nationwide, according to Realtor.com, with the inventory for homes declining 39.6% over the last year.
Ask Rebecca Sokol, an agent with DOBI Real Estate. In the middle of the pandemic, she planned to show a client a home in the $1.5 million range, thinking there wouldn’t be much concern about the home being quickly snapped up. Not exactly.
“When we saw it the day that it hit the market, there were like 15 showings, and they had six offers,” she said. “I realized even the high-end stuff was going.”
One driver in the home sales boom: historically low mortgage rates. According to Mortgage buyer Freddie Mac, the average rate for a 30-year fixed-rate mortgage averaged 2.67% in December 2020. The previous year it was 3.74%.
"The lower mortgage rates are for a given price, the better affordability is," said Gus Faucher, chief economist for PNC Financial Services Group. "Those lower rates that we've seen for the past six, nine months or so have increased affordability at the high end. That's increased demand for them as well."
Others bought luxury homes with cash. A cash purchase generally makes offers more competitive, more attractive and speeds transactions to closing, with the owner sometimes choosing to later finance the home.
A full third, 33%, of the luxury homes purchased in Wayne, Oakland, Macomb, Washtenaw and Livingston counties in 2020 were bought with cash, according to Realcomp. One factor driving cash purchases of luxury homes: wealthy individuals, PNC's Faucher explained, also have benefited from record-high stock prices.
Amenities and additional space also prompted home purchasers in the luxury home market. Among the top homes sold in Michigan last year, many of the spaces boasted roomy interiors; others offered spacious grounds and waterfront views.
“If we’re looking at pandemic, I had buyers calling saying I knew before I didn’t need a home office. Now I do,” Sokol said. “I knew before I didn’t need a gym. Now I do. People need more space because everybody is at home. We don’t know how long it’s going to last. We don’t know the next time something like this is going to happen, and people want to be prepared for it."
Some buyers are relocating from other states, and some are returning home. Apap’s had about half a dozen clients return to Michigan from New York, California and Chicago in the last six months. Some realize they can now work anywhere, a trend only beginning to reshape how people live and where they work.
“A lot of these are people ... had grown up here," he said. "They left for college, got married, doing business in New York and Wall Street and are all of a sudden coming back."
Here’s a list of some of the top properties sold in 2020 in Michigan.
16096 Lake Ave., Union Pier
This 11,000-square-foot lakefront home sits along Lake Michigan and has a large beach with an outdoor space including a private infinity pool, outdoor shower and kitchen area. The home was built in 2007 and gutted in 2011 to accommodate an upper-level kitchen and living space, said Klaus Nyman, the listing agent with @properties.
“You’re high enough up where you have a full view of the infinity pool, the fire pit area, the multi-level deck space, but also the beach and the lake view,” he said.
5181 Sargent Road, Gladwin
This privately owned whitetail deer hunting preserve with a 4,500 square-foot log cabin sits on 2,280 acres and includes a 1,200 square-foot guest house, two-story clubhouse and a 900-square-foot house.
Kyle O'Grady of Re/Max Bayshore Properties and listing agent for the home said the pandemic shed new light on the value of unique properties.
O'Grady said the property is one of a kind "in the state of Michigan in the Lower Peninsula in terms of size, the beautify of it, the wildlife of it, the natural features of it as well as the amenities and infrastructure that was in place on the property."
25764 Franklin Park Court, Franklin Village
This 9,749-square-foot home was built in 2004 and sits on a two-acre setting at the end of a long, private road. It has a state-of-the-art gym, full indoor basketball court and movie theater. The home also featured multiple spaces to work and attend school virtually.
"Franklin Park Court checked the box on every level," said Meredith Colburn, an associate broker with Hall & Hunter Realtors who listed the house.
2350 W. Keenan Hollow Drive, Niles Township
This 5,739-square-foot home sits on 200 acres at the St. Joseph River. This custom-built, six-bedroom home sits on grounds that include a treehouse, pergola, boathouse, farmhouse and five barns.
"The setting itself is something you don't find very often," said Dennis Bamber, listing agent with Dowagiac - Cressy & Everett Real Estate. Three local businessmen purchased the house to share as a secondary property for family vacations and business functions.
4400 Pontiac Trail, Orchard Lake Village
This two-story Tudor-style home has five bedrooms and a five-car garage. It also has 150 feet of lakefront on Orchard Lake. The level of customization was remarkable, said Renee Lossia Acho, who listed this home with Tushar Vakhariya, for Keller Williams Domain in Birmingham.
118 Waterfall Lane, Birmingham
This four-bedroom, 5,214-square-foot home built in 2015 has an infinity-edge pool and overlooks Quarton Lake and a waterfall.
The buyers had a second property up north and were looking for one property that would give them a similar feel, said Renee Lossia Acho of Keller Williams Domain Birmingham and the home's listing agent.
"The fact that this was on the lake, walkable and with a walkout lower level are features that you don't see combined," she said.
984 Lake Shore Road, Grosse Pointe Shores
This 8,184-square-foot, custom-built home on Lake St. Clair sits on more than 3 acres in Grosse Pointe Shores. The buyer liked the location and the view of the water, said Gib Enwyia of Gsa Elite Realty, the agent who represented the buyer.
As for the house, built in 2015, Enwyia said: "Most of the material that was used was imported. There's Israeli tile in there and other beautiful features I'm sure they paid a premium for. ... The architecture, integrity of the home and the beautiful design and layout speaks volume in terms of what you're getting for the price tag."
2727 Darby Ave., East Grand Rapids
This 10,749-square-foot home sits on four lots with 300 feet of private lake frontage. This house has six bedrooms, nine bathrooms, two kitchens and a wine cellar with a bar. There’s also an in-ground pool and pool house with bath and changing room.
"It's kind of like Club Med at your home," said John Postma, an associate broker with RE/MAX of Grand Rapids and listing broker for the home. "The pool, the views the boat out the backyard. It was certainly a beautiful family home."
The family who purchased the home was drawn to East Grand Rapids, he added, because it has been nationally recognized as a top city to live in the state.
20 Peppers Trail, Montague
This home features more than 8,000 square feet of living area. It sits atop a dune overlooking Lake Michigan and has more than 25 acres of private forests and lakeshore. The previous owner built two detached structures next to the main house, said Lisa Stelter with Reinhart Realtors - West Ann Arbor, the listing agent.
“One was for one daughter, one was for the other daughter," she said. "They both had two bedrooms, two and a half baths, spectacular views because it was built on a sand dune. It was pretty high up.”
11756 W. Pointe Road, Kewadin
The home is 9,600 square feet and sits on 2.95 acres overlooking Torch Lake. It features a chef’s kitchen and a first-floor master wing. One of the best features of the property is the lake frontage and views, said Rita McAvoy with Berkshire Hathaway Mi-Eastport and listing agent for the home.
“From every room, you felt like you were standing on the beach,” she said. “I think maybe only one room in the home didn’t have a water view, which is almost impossible to do.”