Up North Revisited

Despite the past year’s hand-wringing and gloomy prognostications about real estate sales, lakefront and other high-end second home properties in Minnesota and Wisconsin are selling like proverbial hotcakes. Everyone seems to want a vacation home, and as lakeshore property gets crowded, savvy buyers are turning to innovative developers and brokers to help them get their piece of the up north dream. We talked to some of the developers and brokers in the business of selling northwoods paradises to find out the biggest trends in second home and vacation properties.

"Instead of buying a whole second home, you buy a quarter of it so you get one week a month. It becomes the size of a car-payment instead of a house payment."

Traditional Areas, New Dwellings

Not surprisingly, Bill Grunewald of UpNorth Properties in Crosslake sees steady development in the Brainerd lakes area, which includes Brainerd, Crosslake, Nisswa, Fifty Lakes, Pequot Lakes, Pine River, Emily,Outing, Pillager, and Mille Lacs lake. “There are new developments going into almost all of [these] areas,” he says. “These developments are usually plats of approximately 4 to 10 lots. The most sought after properties are on good-sized lakes with sandy swimming beaches, clear water, and good fishing.”

With more than 465 lakes and forests, historic resorts, and burgeoning golf courses, the Brainerd-area lakes have been attracting pleasure-seekers since the 1890s. “Gull Lake and Whitefish and Mille Lacs are heavily developed,” notes Mark Ronnei, broker at Grand View Vacation Propertiesin Nisswa.

Partly as a result of this development, Ronnei says he’sseeing two major trends in second homes. “We’re starting to see [development on] second and third-tier lakes, lakes that are not quite as big or as well known.”

He also mentions an increase is fractional ownership.“Instead of buying a whole second home, you buy a quarter of it so you get one week a month,” Ronnei explains, “It becomes the size of a car-payment instead of a house payment.” That would be a mighty nice car, but, as Ronnei points out, “it’s in a lot of people’s price range. For $145,000, you can own a quarter of a phenomenal place in a great location that you can use thirteen weeks a year.”

Fractional ownerships are especially attractive to younger buyers. “Lakeshore prices are extremely high,” Ronnei says. “There’s a lot of demand for it among these young buyers who can’t afford to get a $500,000 to$600,000 house. But for a $145,000 to $150,000 quarter share, they can get appreciation, they can get 13 weeks of use in the house, or put it in a rental program. They can afford a piece of up north, and then as they get more affluent they can sell this property and get another. It gets them into the game.”