Vacation homes eat up inventory, deepen income divide in this Michigan county

Running 36 miles along the Lake Huron shoreline Alcona County has prime real estate on the sun rise side of the state. But when temperatures drop and the sand toys are packed, half the homes go vacant.

The county was dubbed a hot vacation county in 2020 by the National Association of Realtors. The rural, northern county of roughly 10,000 people landed in the top ten of the national rankings list and in the top 1% for sales growth, price growth, change in days on market, and the number of seasonal homes.

Its popularity as a part-time destination, however, deepens income divides and creates housing woes in one of Michigan’s poorest counties.

Alcona stood out among vacation hot spots due to its concentration of vacation homes. The report estimated 49.8% of all homes are seasonally vacant. In 2020, median home prices more than doubled. At the start of 2023, the median listing price was $185,000, another 20% year-over-year increase, according to Realtor.com.

This starkly contrasts Alcona County’s demographics.

One in eight people live in poverty, according to the 2020 Census. And one in three people in the county are seniors, leaving little room for upward mobility.

You don’t have to look at numbers to see the divide, although they tell a clear story — list prices ranged from $4,500 to $1.2 million, according to Realtor.com data from January 2023.

Along the lakeshore, homes in the city of Harrisville, the county seat, are expansive, modern and tidy. There are 71 boat slips in the marina, half of which are occupied by seasonal boaters, and electric-vehicle chargers in the parking lot. The vacationers from downstate have brought their metro amenities with them.

But just one block inland and the cottages grow older and smaller.

There’s not much middle ground, said Matt Burt, builder, broker and developer in Harrisville. There are what he calls luxury homes, built in the last five years, and then there are homes that have been there since the 1930s.

Burt, 63, started vacationing in Harrisville in 1965. As a toddler he was amazed at how such a small town could seemingly double, or even triple, in population once summer started. He remembers packed streets on Fourth of July, full movie theatres and not a single vacancy on Main Street.

“It’s amazing to see, 50 years later, it turn into a ghost town,” Burt said.

While Harrisville’s presence faded, cities just 20 to 30 miles south like Oscoda and Tawas have seen major growth both in tourism and industry. Keeping Harrisville small was by design, not coincidence, Burt said.

“The powers that be didn’t want growth. They got their wish,” Burt said. “Now they do, but the train has gotten so far down the tracks it’s hard to get on.”

On a Tuesday morning in the middle of winter, Mike Briggs, 30, brought his grandmother Margaret Heffelfinger, 89, to the new diner in Harrisville.

Mill Creek Cafe, the only drive-through in the county, opened just after Labor Day along U.S. 23.

Catering to the commuters, the cafe’s hours are 5 a.m. to 8 p.m., but this morning Briggs and his grandmother were the first customers to sit down at 9:30 a.m.

Briggs spent most of his childhood summers fishing in Harrisville, but once the salmon dried up so did the town, he said.

It’s stark contrast to his own hometown, Hubbard Lake, 20 miles inland. Briggs said he built houses for Chicago clients with “no checkbook” in Traverse City. Now, they are moving onto his lake.

“Those kinds of houses are coming up here,” he said. “[The area] is on its way back.”

Much like the rest of the state, home values in Alcona County saw a boost amid the pandemic housing frenzy.

Comparing home values from August of 2019 to August of 2022, Alcona County’s median value increased by more than $42,000, according to Zillow data.

It’s not quite the jaw-dropping $129,000 increase in Leelanau County over the same period of time, but Burt takes it as a good sign home values are playing catch up.

The double-edged sword is that a rush of new money is pushing locals to the outskirts or even out of their homes.

“I’ve actually had people that had to sell because of their taxes,” Burt said. “When you’re on a fixed income, later in life, you don’t have that ability that you did when you were younger to dial up whatever you’re doing and make a little more money.”

Alcona County recently received a $12.5 million grant from the state for a senior center and housing project. However, personal and political disputes have held up the process.

Related: Conservative politics, alleged racism and $12.5M divide Northern Michigan county

There’s no question the pandemic shifted the clientele for realtor Chontrese Minnick. More remote workers and families looking for a getaway brought steep competition to what was a sleepy vacation town.

While the newcomers are great business, it puts Minnick, 30, in a personal pinch as she looks for a bigger home to raise her two kids.

“It’s kind of sad now I’m in the market to be buying a nicer property for my family [and] people are starting to notice that it’s awesome up here and wanting to be here,” she said. “It’s just driven prices up.”

It’s not just folks from down state checking out Alcona County, it’s newcomers from down south, Minnick said.

In the last few years she’s had homebuyers from Florida, Tennessee and Texas. Many of them are airplane mechanics looking for a home within commuting distance to Kalitta Air in Oscoda.

When the air cargo transportation company built a new hangar at the former Wurtsmith Air Force Base in 2008 it revived the employment base. Its recent expansion into an aircraft maintenance facility brought 600 employees to the area.

Now neighboring Alcona County could benefit from the overflow, Minnick said. The only problem is there’s hardly anything for sale.

The vacation hot spot status upped demand for short-term rentals like Airbnb and VRBO, too.

“People have been snatching up homes to do rentals,” Minnick said. “It definitely has increased the fight for what we have.”

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