Northeast Michigan buyers, sellers, renters, builders struggle in housing shortage
ALPENA — For Danielle Whitcomb, moving to Alpena in July meant settling for a second-choice school and giving up the family dog, because she had to jockey with a horde of other anxious home-shoppers for a too-small supply of available homes.
“It was quite a hassle to get up here,” Whitcomb said. “It would have been sooner, had I found a house.”
Potential homebuyers and renters in Northeast Michigan feel the pinch of a nationwide housing shortage spurred by a shifting economy and kicked into high gear by the COVID-19 pandemic.
With a whopping 84% of its unoccupied properties tied up in seasonal and recreational uses such as hunting cabins and lake cottages, Northeast Michigan lacks a big enough supply of available homes to meet a current robust demand, real estate and economic development officials say.
Meanwhile, steep construction prices make it difficult to expand that pool of available property, spelling frustration for many people considering relocating to or within the Alpena area.
Those inadequate housing options put the Alpena region at risk of stifled economic development as employers struggle to recruit workers who can’t find a place to live and businesses hesitate to invest when there aren’t enough homes to go around, The News learned through weeks of research and interviews with developers, real estate agents, landlords, and potential buyers and renters.
So high is the demand and so short the supply that Alpena landlord Duaine Galbraith said he hasn’t had an empty unit in six years. He could fill a vacancy the same day a rental empties, he said.
“Doesn’t matter what I show them,” Galbraith said. “They’ll take it on the spot.
An influx of downstaters and out-of-staters buying Up North properties — sometimes for part-time housing — explains how a region that’s lost 4% of its population in the past decade can still run out of homes, said Mike Mahler, economic development director at the Alpena Area Chamber of Commerce.
The coronavirus pandemic taught many employees how to work remotely from anywhere and filled their pockets with stimulus money. And that has prompted many to move from big cities to places like Alpena, where the cost of living is relatively low, Mahler said.
But Northeast Michigan doesn’t have enough available homes.
Nationally, 8% of homes without year-round residents were for sale in 2019, while only 4% of empty homes boasted For Sale signs in Northeast Michigan, according to U.S. Census Bureau data. Alpena-area property owners listed fewer than 2% of available homes for rent, compared to almost 17% nationally.
The rest were tied up in seasonal or recreational housing.
Affordable Up North housing attracts people looking for a second home, said Steve Schnell, Charlevoix County Housing Ready program director for Housing North, a Northwest Michigan advocacy group.
Each residence bought as a second home, however, is “not a house that can serve the local workforce and families that have kids in local schools,” Schnell said.
And that, researchers say, can choke off economic growth.
“The economy cannot grow unless population grows and the population cannot grow without new housing,” Harvard University researchers said in a May 2006 study examining Boston’s plans to restrict new housing.
When Wisconsin resident Stephanie Bender’s husband took a job in Alpena, she searched online real estate sites and found several promising homes.
“There were probably half a dozen houses I saw online that I thought, ‘Ooh, I’d like to see that, maybe,'” Bender said. “But, by the time we got here, they were gone.”
When Bender moved in the past, she was able to look at a dozen homes. During her Alpena search last fall, she saw only four, including one that would have required extensive repairs the family couldn’t afford and one that “was just, like, ‘No, absolutely not,'” Bender said.
The family finally found and purchased an unlisted home that wasn’t really what they wanted.
Most prospective buyers are vying for the same type of property: three-bedroom, ranch-style homes in the city, according to Lori Stephan, owner of Real Estate One in Alpena.
“If you don’t have all of your ducks in a row, a letter of preapproval on day one, you’re not getting these homes,” she said.
To add to the housing market’s current squeeze, many residents who might normally consider moving are staying put.
Nationally, record numbers of homeowners are choosing to not move, at least partially in response to rising home prices over the last two decades, according to real estate brokerage company Redfin.
In Alpena, the value of the average single-family home has almost doubled in the past decade, according to online real estate company Zillow. With such an increase, some who might consider selling stay put, worried about the price they’ll pay for a new home.
With fewer people moving, fewer houses are opening up for prospective buyers.
Those who want to move “need to have a plan B,” Stephan said.
‘A NIGHTMARE FROM START TO FINISH’
Alpena builder Kyle Leavesley knows Alpena needs more homes. Multiple hopeful residents asked to purchase a home he built in Alpena over the summer as it was under construction.
But the cost to build new homes shot through the roof after the price of materials skyrocketed and the labor pool drained during the coronavirus pandemic, Leavesley said.
With construction costs high, builders who sell their homes should expect to take a financial hit, even with today’s rising house prices. Leavesley is building a house now with materials purchased before prices jumped. The $70,000 in materials would cost $110,000 now, Leavesley said.
Anyone hoping to build should be prepared to wait. Contractors are booked solid and willing workers hard to find, Leavesley said.
“The whole thing is a nightmare from start to finish,” Leavesley said.
Price hikes and labor shortages are a nationwide challenge, but areas like Alpena are especially hurt by them, said Mahler, of the Alpena Chamber.
While it costs as much to build in Alpena as it does in a metropolitan area, buyers won’t pay the higher price here, where the overall lower cost of living is lower, Mahler said.
It can cost almost as much as building new to fix up an existing house, and high property costs keep landlords from adding more stock, according to Galbraith, the Alpena landlord whose rental properties are snapped up the day they empty.
Even if he can afford the purchase price of a property, the buildings on that property often need $20,000 to $30,000 in work — and he can’t find anyone willing to help him with renovations.
He’s in the process of fixing up a six-bedroom home in town. He could sell it tomorrow if he could finish it, Galbraith said.
“It’s going to be a nice place for someone,” Galbraith said. “It’s just getting it done.”