DULUTH – As home buyers spread across Minnesota looking for that perfect new spot to work from home or vacation, intense competition is causing some to look across the border.
Wisconsin's South Shore is drawing high interest from buyers — though as elsewhere, supply remains limited and demand remains strong, especially by winter standards.
"We're seeing more movement from the Duluth/Superior area, and as people look at the North Shore," said Jenna Galegher, president-elect of the Lake Superior Area Realtors board, who is based in Bayfield, Wis. "Winter is typically our slowest time, but it has stayed steady — we haven't slowed down since March."
Typically about 60% of buyers in the Bayfield area would be looking for a second home while the rest are looking for a full-time residence, but since the pandemic took hold that has reversed.
"For land sales, we're seeing people motivated to start building sooner, asking, 'How quickly can we build a cabin here?' " Galegher said. "It used to be more of the retirees and those who would use it seasonally and then retire, but we're seeing more of the younger telecommuters. That definitely has shifted things a bit."
Low interest rates continue to drive demand for both second homes and the chance to work remotely in a more rural environment, and many properties on the Bayfield Peninsula proudly tout fiber-optic internet connections.
But sellers have been hesitant to list — in part because of COVID-19 fears, but also because it has been so difficult to find a home to buy.
On the Minnesota side of the Duluth-area market, there were about half as many homes for sale in January as there were a year ago, according to Lake Superior Area Realtors (LSAR) data, and Duluth especially holds few options for potential buyers.
If the existing stock of homes kept selling at the current pace and no more were listed, it would take just over a month for inventory to completely run out in Duluth.
"It is competitive as ever, and that low inventory just makes it worse," said Shaina Nickila, president of the LSAR board. "If there are 10 offers and they can only take one, that means there are nine other folks still looking in the same neighborhood in the same price range."
The median sale price in the Duluth area — covering much of St. Louis County, the North Shore and Carlton County — was $190,000 last month, a 16% increase over January 2020 and a record high for the month. Closed sales jumped 36% even as the number of homes for sale dropped by 43%.
On the Wisconsin side of the market, the median home sale price rose 11% to $150,000 in January as the number of homes for sale dropped 35% year over year.
"We will at some point have more inventory," said Galegher, who urged buyers to be "flexible" and consider properties that need some work.
"The big draw to the area, whether it's Duluth, Superior, the North Shore, Bayfield County — it's all the lake," Galegher said. "If you can both work and play here, that's ideal. So why not live here?"
Brooks Johnson • 218-491-6496