Second to none

It’s not just the North Shore real estate market that remains strong. Demand for second homes from Lake Geneva, Wisconsin to Saugatuck, Michigan is tight as buyers face a shortage of listings. What drives the demand for second homes? While the desire for a “home away from home” in a bucolic, seaside location is nothing new, what has changed is how people use them. With more North Shore residents working in remote or hybrid settings, the “lake house” is no longer just for long summer weekends.

This week, brokers in the North Shore and resort communities along Lake Michigan told The North Shore Weekend that those looking for second homes in the area should do their homework and hire a real estate professional who knows neighborhoods in their communities of choice.

Margaret Labus, broker at The Starboard Group and @properties in Lake Geneva, Wisconsin, says a number of forces have driven and continue to drive demand in the Lake Geneva market, including Wisconsin’s less restrictive approach to manage COVID-19 and the lifting of regulations on ownership of Airbnb and other vacation rental services.

“We’re a summer resort for the Chicago market and before COVID-19 when you walked through the cheddar curtain, people thought, ‘We’re going to move to Wisconsin’ someday because of taxes or whatever. whatever else,” says Labus. “Since then it’s been like a tsunami of people.”

While three years ago buyers were looking for vacation homes, the mindset is different with work-from-home options.

“Before the pandemic, the buyer wanted something different,” she says. “But after the pandemic, they just want to be where they want to be. They don’t have to live in the suburbs; they can be anywhere and still do their job.

Labus says the early coronavirus uncertainty and the fact that Wisconsin remained fairly open everywhere also motivated many families to look for homes in the area.

“Our restaurants were open and the schools were face to face,” she says. “One of the things that surprised me was that people who had second homes here moved their primary homes here so their children could actually go to school face-to-face. We gained a lot families because of it.

Labus says the best advice she can give buyers is to work with an experienced local agent who knows the territory well. In a tight market where decisions need to be made quickly, this can make all the difference.

“People say ‘goodbye’ to Illinois and ‘hello’ to Wisconsin, but we just haven’t built, like everywhere else in the country,” she says. “We have such a limited stock.”

As a result, Labus says customers are looking for areas farther from the lake, including communities where there is new construction and prices are cheaper than being on the water. Across the lake in New Buffalo, Michigan, real estate broker Liz Roch says it’s more or less the same in Harbor Country as well. There has been a huge increase in demand from buyers, mainly second home buyers, but some are moving full time.

“Recently, buyers have been frustrated with dwindling inventory, multiple offers and rising prices, and active inventory has always been limited in our region, but the recent increase in demand has amplified the shortfall,” Roche says. “Higher prices have prompted some long-term owners to sign up and take advantage of favorable sales conditions. I expect this trend to continue through the spring, providing additional options for willing buyers, but at higher. “

Roch says those settling in the community are a mix of retirees and families with children. With the work-from-anywhere mindset, she sees a larger percentage of buyers in the segment of young families with children, and several new children have enrolled in local schools after moving from Chicago to over the past two years. She says the pace of life is appealing.

“There’s a desire to spend quality time with family and friends, away from the usual hectic pace of everyday life,” Roch says. “There’s more flexibility in working hours and the ability to work from home, and Airbnb and its competitors can help landlords offset the cost of ownership.”

Winnetka Engel & Völkers broker Karen Arenson says the company recognized the trend of more people working remotely a few years before the onset of COVID-19. The influx of clients seeking second homes has prompted since the opening of an Engel & Völkers office in Douglas/Saugatuck, Michigan.

“When we opened our Engel & Völkers North Shore store, we always intended to expand into Michigan and Wisconsin, but not for a few years,” says Arenson. “As a result of COVID, the movement to own a second home in a more remote or more spacious or rural area took off, and we responded. In January 2021, we kicked off the opening of our third Engel & Völkers store in Douglas/Saugatuck, Michigan. We accelerated our expansion because we didn’t want to miss the trend and the activity.

Arenson says the restrictions during COVID have made people realize the value of having a change of scenery, a place to escape, and a home-like retreat where memories can be made.

“We all had to put our holidays on hold; most of us have been forced to live, work and go to school at home,” she says. “People were encouraged to do their work in places where they could leave their homes when working to ski, swim, go to the beach, etc. COVID has literally opened the door to improving our lifestyles by blending space for work, study and play.”

Just south of New Buffalo in Long Beach, Indiana, @properties broker Jordan Gallas says the market there is stronger than ever.

“It really amplified at the start of the pandemic where sheltering-in-place and working from home started to be implemented,” says Gallas. “Current second home residents are here and using their vacation homes much more than in the past.”

Gallas says that with limited inventory and strong buyer demand, prices have steadily increased and buyers are now looking at the home concept differently. Space is at a premium, and the more the better.

“Buyers are looking for homes that have or can accommodate a home office, and consistent signal strength and internet speed is now a question people are asking,” he says. “As for the current owners of second homes, they would like to take advantage of their added value, but if they want to stay in the area, then they become buyers and it’s incredibly competitive.”

Chad Gradowski, a broker at Coldwell Banker’s New Buffalo office, says while the area is still primarily a second home market, the pandemic has caused a change.

“Before, the trend was that people wanted a weekend or a summer residence and that’s still the case about 70% of the time,” says Gradowski. “However, with the pandemic adding flexibility to many people’s workplaces, we are seeing people spending more time in these second homes and wanting more space and even offices at home.”

Even for North Shore residents, Gradowski says the community offers something new and different.

“While those who live on the North Shore have access to beautiful beaches, there is always a strong desire to have a second home to get away from it all,” he says. “New Buffalo, for example, has more of a beach town vibe with amazing restaurants and wineries. You really feel like you are in a world apart and you get out of your daily life just a few minutes drive from the North Shore.”

Glenview @properties agent Connie Dornan says for clients who still commute to the office once or twice a week, a second home within a manageable commute is attractive.

“For clients who still have to come into the office at least once or twice a week, they opt for second homes within a two to three hour commute,” says Dornan. “For clients who are no longer required to be in the office and who do not have special family ties to our area, they have mostly gone to the Carolinas or Florida.”

With Illinois losing more than 113,000 people in 2021, according to new US Census data, people leaving the state are a significant part of the picture that cannot be ignored.

“People are moving to states like Utah and Florida where taxes are low,” says Jena Radnay, @properties broker at Winnetka. “Of course, the Midwest is always an option for a second home, but I see people selling here on the North Shore leaving the state.”

“Our world has changed and people are realizing that vacations are more expensive and logistically harder to plan,” says Highland Park Engel & Völkers broker Jamie Roth. “There’s something easy and special about having your own home to go to and still feel like you’re on vacation. It’s a stress-free way to relax and recharge, and it also has the added benefit of be a good investment and you can rent the house when you are not using it.