Record Traverse City home sales are starting to slow, but recent data suggests that commercial real estate – lagging just two years ago – is now booming.

For the first six months of 2018, commercial sales are up 16.4 percent, while the number of leases has increased 34.9 percent, according to MLS data.

"It’s looking really good,” says Coldwell Banker Commercial realtor Dan Stiebel. “Anything within the Traverse City city limits is hot, while close to downtown is really popular. And Garfield Township has a lot of new construction with several apartments."

As of mid-July, there were 135 commercial properties for sale in Grand Traverse County. The average list price for these is $887,951, higher than last year’s all-time high of $676,630.

But that doesn’t mean the market is without problems for TC realtors: They don’t have enough to sell.

“Thirty-five years in the business and I’ve never seen such a shortage of inventory,” says Tom Krause of Krause Realty Solutions. “The market is strong, but inventory is down. We have more buyers than sellers and, consequently, the sellers have them priced high…as soon as we list it, we sell it.”

And the numbers bear out how quickly commercial buildings are selling. In 2014, commercial properties were on the market for an average of 445 days; this year that number is down to 264 days.

“When buyers see a good property with a fair asking price, they are moving much more quickly to make an offer and close on the property than they have in the past few years,” explains Stiebel, who has been in the business for 16 years and is having his best year ever.

“Activity has been high, but the inventory is slim pickings,” agrees Kevin Endres, principal at Three West. “We’ve had a very strong beginning of the year, but it’s getting more difficult to find exactly the right property to fit a client’s needs.”

Consequently, Three West has extended its focus outside the Grand Traverse region and is serving areas such as Rogers City, West Branch, Manistee, Grayling, and Gaylord, according to Endres (earlier this month Three West moved to a new home at 1131 East Eighth Street in Traverse City).

The highest reported sale so far this year was for an industrial/warehouse listing that houses Whittock Supply at 1610 South Airport Road, which went for $1.25 million.

Last year’s top commercial sale was the Old City Hall building on State Street downtown, which sold for $1.935 million.

Both figures would be surpassed if any of three of Traverse City’s best-known venues sells this year. Miller Investments is expected to close soon on the purchase of the historic Fifth Third Bank building at Front and Union Streets downtown; the most recent asking price was $3.9 million.

Streeters at 1669 Garfield Road was recently listed for sale by Stiebel for $2.29 million. The 3.27-acre parcel includes three separate venues – a concert/event space, a wedding reception/banquet area, and a restaurant.

And West Bay Beach, A Holiday Inn Resort has also been listed for sale; the asking price is “undisclosed,” and inquiries to the listing agent were not returned. But sources in the industry say the hotel is for sale for more than $20 million. The property includes the four-story, 179-room hotel and 600 feet of West Grand Traverse Bay frontage.