Bayfield, Wisconsin Real Estate Market Report for November 2011 - November Average List Price Drops 1.3% During the Past Week

The inventory of Bayfield, Wisconsin area homes for sale remains high, while the average list price of homes for sale in the 54814 zip code has dropped steadily since the beginning of November, according to data obtained from Trulia.

At the beginning of November, the average list price for Bayfield homes was around $207,000.  As of November 23, 2011, that average list price had dropped to $201,295.

When compared to the Madeline Island real estate market, homes in Bayfield appear to be much more affordable.  The average price of a home in the 54850 zip code area (Madeline Island) is currently $385,305.  The higher figure for Madeline Island home price averages reflects two underlying factors, the first being a higher percentage of waterfront properties for sale and the second being higher construction costs involved in building a home on an island.

Ask us about Bayfield, Wisconsin properties for sale.  Contact Madeline Island Realty at 715.747.6500 or call Broker Eric Kodner at 612.670.2539.

Madeline Island Soil Geology and What it Means to a Home Buyer

Madeline Island buyers, particularly those looking at buying a lot and building a home, should be informed and aware about the Island's topography and soil geology.  This information will help a buyer make better, more informed decisions about where and what to build.

The geology of Lake Superior and the Apostle Islands dates back to the earth's early history.  All of the Apostle Islands are part of the Chequamegon Sandstone (or Brownstone) formation, part of the Bayfield group of Cambrian sandstones.  Chequamegon sandstone has a reddish-brown hue because of the presence of small amounts of iron ore.

On top of the ancient sandstone underlayment, much of Madeline Island is covered with impermeable red clay soil.  There are select areas of permeable soil near the surface in a few parts of the Island, but for the most part, Island soils won't pass a percolation test due to the predominant clay soil.  In connection with the building permit process, the issuance of a sanitary permit usually means either (1) installing a holding tank system which must be pumped out routinely by a licensed sanitary pumper, or (2) constructing a "mound system", which is essentially a surface drain field.

Madeline Island clay soil tends to trap water against a home's foundation, creating hydrostatic pressure which can contribute to the likelihood of a damp basement.  A properly-constructed drain tile system, with sump pump(s) if necessary will be essential to preventing a damp basement, along with proper grading around the dwelling and the use of gutters and downspouts.

The heavy clay soil, combined with an accumulated surface layer of decomposed vegetation in many spots, can make driveway construction difficult.  It's important to hire a competent road building contractor when installing a driveway or preparing a building site for construction.  We recommend that a buyer who is contemplating building an Island dwelling should contact Nelson Construction on Madeline Island (715-747-3300) for detailed information and advice about road construction.

How to Classify Madeline Island Lakeshore Property by Bank Height and Shoreline Features

I've never seen anyone blog about this before, but I believe prospective Madeline Island buyers would find it valuable to be able to classify and differentiate between waterfront lots based on factors like bank height and beach type.

The vast majority of our Madeline Island real estate buyers are looking for either Lake Superior frontage, lake access or a water view. Most folks want to see the lake, to be able to walk the beach and wiggle their toes in the sand.  They want an affinity to the water.  That's all part of the cache and the "sizzle" which goes along with buying island property.

Madeline Island's shoreline offers such a wide variety of beach shoreline types, as well as tremendous variations in bank height.  Motor around the Island's circumference in a boat and you'll notice also that vegetation types can vary greatly, as a result of "micro-climates" influenced by prevailing winds, bank and shoreline characteristics, variations in soil types and so forth.

Here are some general classifications and characteristics of Madeline Island shoreline zones:

Low Bank (usually with sand beach frontage)

Shoreline with a low bank height (by that I mean shoreline lots where the elevation of the dwelling site is less than ten or fifteen feet above the lake level) is found in a few places on Madeline Island, including the area along Main Street in downtown La Pointe. For example, our office (located next to the Beach Club at 809 Main Street) has virtually zero bank and a stretch of sand beach which extends from the Beach Club dock to the east.  There is also some low bank adjacent to Big Bay Town Park (mostly to the north) and a fine example of low bank with sand beach in the Amnicon Beach area, as well as the end of Chippewa Trail.  Nebraska Row has some frontage which could also be described as low bank.

Low to Medium Bank

Shoreline that is between ten and twenty-five feet above the lake elevation would fall into this category.  Some of this frontage has sand beach, but it can often be more like pebble beach or may even be rocky.  Shoreline of this type is found on the west and southwest side of Madeline Island, from the Griggs ice road approach and continuing along Sunset Bay.  There is also low to medium bank shoreline in many areas to the north of Big Bay which runs all the way up to the tip of Amnicon Point. Another zone of low to medium bank is found between Capser Road and Islewood Road on the southeast part of Madeline Island.

Medium to High Bank 

I'd classify this type of shoreline as being 25 to 40 feet above lake level.  Medium to high bank lots are prevalent along South Shore Road, from the Raymond Road area north to Chebomnicon Bay.  There is medium bank in spots along Big Bay Road to the north of the Town Park and also in a few places along Hagen Road (on the way to Big Bay State Park), as well as on the north side of the Island.

High Bank (rocky or pebbly frontage, sometimes with either clay or brownstone cliffs)

High bank lots are fairly common along North Shore Road, but may also be found along South Shore Road south of Chebomnicon Bay.  These lots typically have steep clay banks and pebble beach in spots.  High bank is also found on the northeastern tip of Madeline Island at Steamboat Point and in the Devil's Cauldron area, as well as North Shore Road from Hidden Beach south much of the way towards Sunset Bay.  In particular, the high bank lots near Steamboat Point and to the north of Hidden Beach are typically brownstone boulders and cliffs, with no sand beach.  Some high bank lots on the Island may have building sites which are 40 to 50 feet above the lake level.  In some places around the Island, an expensive shoreline staircase or a shoreline "tram" powered by electricity or propane may be necessary in order to access the lake.  The brownstone frontage lots are generally not suitable for a crib dock or shoreline access, with very few exceptions.

More Information About Renting Your Madeline Island Home - What Kind of Dwelling Should You Buy if You Want to Maximize Rental Income?

Every so often, a buyer prospect will ask us "what kind of dwelling should I buy if I want to rent my home during the summer?"  Here are a few tips that will help you make an informed decision about getting into summer rentals:

• Waterfront homes (or homes with a water view) generally rent better than interior homes.  They usually receive more bookings per year and the nightly/weekly rate is higher.  An exception would be condo or townhome units in downtown La Pointe, or homes and cottages within half a mile of the Madeline Island Ferry dock.  These also rent very well during summer.
• If you're planning to rent in the "fringe" portion of the tourist season (when the weather is cooler), you'll likely do better with a house that has a proper heating system and ample insulation.  Thermionic in-floor heat can be a big plus and renters love it.  In-floor heat is quiet and efficient and there's nothing like having tile or wood floors that are "barefoot warm" on a chilly autumn morning!
• Amenities like fireplaces or woodstoves, a screen porch, a deck, perhaps even a hot tub, can add value and make your rental more appealing.  Consider offering renters the use of a pair of bicycles or a kayak (consult with your insurance agent before doing this) as a value-added feature of your rental.

You may even wish to consult with a property management expert before you buy and ask them which homes seem to rent best (and which homes produce the highest net income to the owner).  A good property manager keeps statistics on their top producing rentals, and they can provide you with ample information.

Regardless of what you buy, remember that your summer home, cabin or cottage probably won't appeal to every renter.  Some renters prefer a rustic cabin or cottage, while others look for a summer home that has all the comforts they enjoy back home in their primary residential community.  Surprisingly, some renters arrive at their rental, throw a purse or duffel bag on the sofa and grab a picnic basket, then head off for a day of sailing or sightseeing.  These particular renters don't spend much time at their rental unit, except to sleep, and they don't care much about amenities or decor.

Why You Should Consider Buying an Income Producing Property on Madeline Island

Our Madeline Island community is unique in many ways, but maybe one of the most significant features of our Island is the shortage of commercial lodging available in what is widely regarded as a resort and recreational community.

Back in 2006, when we sold the Madeline Island Motel on Colonel Woods Avenue, that facility was the largest motel operation on the Island.  And since 2006, there has been a conspicuous lack of large-scale hotel/motel construction on Madeline Island.

Visitors rely on other lodging resources if they wish to stay on Madeline Island.  Many visitors reserve campground space at either Big Bay State Park (requiring a Wisconsin State Park sticker) or at Big Bay Town Park.  Other visitors who wish to stay overnight will contact a local property management/home rental firm, such as is operated by The Inn on Madeline Island. 

The latter resource is significant, because a good number of Island homeowners rent out their homes during the summer months.  In the busiest part of summer, there is great demand for rental homes, particularly those with Lake Superior shoreline.

This past summer, despite the fact that real estate sales were slow, there was a shortage of available lodging during July and August.  We could have used more rental dwelling units on Madeline Island during those months.

You may not get rich by renting your Madeline Island home, but if you're methodical and are willing to manage the expenses involved, you can probably at least net enough to pay your property taxes.  And if you own a waterfront home, that could be a significant reason to rent.

You can rent on your own, but many owners use one of the local property management firms.  Some of these firms claim that their average property management expense is around 40% of gross rentals.  However, keeping your property management expense below 50% can be challenging.

Keeping property management expenses under control requires a few basic steps:

• Most property managers offer ala carte services (and pricing) such as lawn mowing, tree trimming, home maintenance and winterizing.  These are convenient services but they add up.  Generally, you can save money by hiring out many of these services yourself, instead of picking up your phone in Minneapolis or Chicago or Madison and telling the property manager "please take care of this for me and send me the bill".
• Review your monthly property management statement and call your property manager if you see expenses in the statement that are questionable.  Sometimes a property manager will notice that your $10 coffee maker or toaster isn't working, so they'll gladly run back to their office and pick up a new one for you (which they purchased at WalMart for $10 but bill you $40-50 for) which they'll put in your cabin or cottage.  Trouble is, you don't need to pay a four hundred or five hundred per cent markup for a new toaster or coffee maker!
• If you rent during the cooler months of the year, you can save money by considering off-peak electric heat (and domestic hot water) instead of propane.  Off-peak electric is clean and efficient, not to mention relatively cheap.  There are no tanks to fill and there's no need to read the tank meter to make sure it's not empty.
• Keep track of what you pay for lawn care, snow removal, leaf raking, firewood cutting and carpet or window cleaning.  If you're property is a desirable and busy rental that makes the property manager money, try negotiating a better rate for these services.  Or consider mowing your own lawn and performing other similar tasks.

Like any worthwhile enterprise, owning a home that rents while you are away and earns you money can be rewarding, but it requires some degree of effort.  Speak with one of our real estate professionals about Madeline Island properties that are best suited for vacation rentals.