A victim of its popularity, Petoskey struggles as home prices hit $1 million

Petoskey home prices have tripled since 2020, with half of residences now used as seasonal second-homes
Housing for employees is the biggest issue facing employers in the area
New homes and apartments are beginning to ease the housing crunch

PETOSKEY — The calls come like clockwork to the one-story brick building in downtown Petoskey. On one end of the calls is Nikki Devitt, president of the Petoskey Chamber; on the other, a desperate employer.

“They say ‘We just hired a year-round salaried position’, or ‘We hired a nurse, we hired a doctor. We can’t find them housing, and they’ve been looking for three months and they’re going to turn down the job. Do you know of anything?’

“My answer is the same as it was the week before: I can’t help you.” Devitt told Bridge Michigan.

Petoskey is suffocating from its own popularity. Homes are scarce, with occupancy rates over 99%. The cost of available homes have more than tripled in cost since 2020, from $310,000 to $1.1 million.

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Over that same time, the median statewide home sale price rose from $250,000 in 2020 to $270,000 in 2025.

About half the homes in this city of 5,800 have been scooped up by out-of-towners who are typically here only to summer near Lake Michigan, creating a shortage for permanent residents.

A row of large Victorian-style homes with wraparound porches and steep gray roofs sits along a grassy hillside under an overcast sky. Bare trees partially frame the pastel green house in the foreground. — Stately homes overlook Little Traverse Bay and are part of the Bay View Association which was founded in 1875 by Michigan Methodists “for scientific and intellectual culture, and for the promotion of the Christian religion and morality.” The community or camp is made up of Victorian homes and 30 public buildings including a post office, chapel and auditorium and sits just north of downtown Petoskey. (Kathy Kieliszewski/Bridge Michigan)

That’s left businesses scrambling to find year-round employees, and workers to commute from an hour or more away or even live in campgrounds.

And while a burst of new homes and apartments have just opened or are under construction, leaders list the housing crunch as the city’s biggest problem.

“It’s killing opportunity for the everyday teacher and nurse, who without some miracle will not be able to buy a home in Petoskey in the future,” said Petoskey Mayor John Murphy.

It’s not just Petoskey. Access to housing is a top issue throughout northern Michigan and becoming a bigger problem statewide.

Bridge Michigan is conducting an nonscientific survey of residents’ top election issues through an initiative called Bridge Listens.

Vote on top issues in Michigan

Since late February, 1 in 10 of the 2,100 respondents have identified housing as a top concern — and a full third of them are from northern Michigan.

One study found the 10-county region surrounding Petoskey needs 30,000 more units by 2027 to meet demand.

‘Pure luxury’

Nestled on a hill overlooking Little Traverse Bay, Petoskey has historically been a more affordable destination than tourist meccas like Traverse City and Charlevoix. That’s changed since the pandemic, when interest — and housing prices — in this Emmet County community exploded.

“Everyone was looking to get away from cities and interest rates were low,” said David Shuman, of Bay North Realty.

“Demand was here,” raising one hand to his head, “and supply was here,” lowering his other hand to his stomach.

Prices have gone up so much that Realtor.Com recently listed Petoskey as one of 13 “pure luxury” communities in the nation, with over half of home listings surpassing $1 million. Petoskey is the only Michigan community on the list. It ranked 11^th, a few spots behind Kapaa, Hawaii, and ahead of Bozeman, Montana.

A woman walks down Lake Street in downtown Petoskey on Thurs., May 7, 2026. — Downtown Petoskey’s streets are lined with quaint shops, coffee shops and restaurants. (Kathy Kieliszewski/Bridge Michigan)

A tall red clock tower with a hanging bell stands at the end of a tree-lined walkway leading toward the waterfront. Two people walk along the path beneath overcast skies, with a lighthouse visible in the distance. — A couple walks through Bayfront Park’s central promenade near the clock tower on Little Traverse Bay in downtown Petoskey. (Kathy Kieliszewski/Bridge Michigan)

Two seagulls perch atop a weathered Michigan historic site marker for Little Traverse Bay near the waterfront under cloudy skies, with a streetlamp standing nearby. — Two seagulls sit atop a historical marker in Sunset Park on the bluff overlooking Little Traverse Bay just northwest of downtown Petoskey. The marker notes the Native American history of the region including that the town is named for Chief Petosega of the Bear River Band. (Kathy Kieliszewski/Bridge Michigan)

Petoskey is surrounded by year-round attractions, from the water views and hiking in the summer to three ski resorts within 25 minutes in the winter. The city has green spaces and upscale shops and restaurants, and those skyrocketing home prices have led to more tax revenue for Petoskey. Five public sculptures are being installed this year alone, according to Murphy, the mayor.

On a drive around town, Shuman parked in front of a stately old home on a hill overlooking the bay, two blocks from downtown.

In 2015, the home sold for $377,000, Shuman said. In 2023, it sold again for about $1.4 million. Three years later, it’s on the market at $1.95 million.

Shuman said it’s tough for Petoskey to build its way out of its housing crisis. Some nearby housing developments have stalled over who should pay to extend water and sewer lines.

The few subdivisions that have sprung up are custom-built homes averaging $500 per square foot to build. That’s $1 million for a 2,000 square foot home.

Discussing the problem, Shuman waved at a passing car.

It was the wife of a doctor Shuman helped find a home when he was hired at McLaren Northern Michigan hospital. For several months, the doctor lived in a camper because he couldn’t find a home.

Petoskey Public Schools Superintendent Jeffrey Leslie had similar trouble when he moved to the community four years ago.

“When we’re interviewing people for jobs, we always have to ask, ‘Do you have housing?’” Leslie said. “I’ve had a lot of people turn down jobs because they couldn’t find housing.”

In a survey by Northern Lakes Economic Alliance, which serves businesses in Antrim, Charlevoix, Cheboygan and Emmet counties, 81% of employers cited attainable housing as the top barrier .

While there are lower-income communities within a 30-minute drive of Petoskey, some workers travel farther each day.

One of the school district’s administrators lives an hour away in St. Ignace, and other employees live in Onaway, a 50-minute drive when the roads are clear. In winter, it takes a lot longer.

“There’s a huge lack of homes that normal people can afford,” Leslie said.

New housing coming

There are signs Petoskey is beginning to address its housing crunch.

There is the sound of power tools once again at the site of the former Michigan Maple Block Company in Petoskey, which produced butcher blocks and cutting tables at a plant near the Bear River until it closed in 2020. The factory has since been torn down, with apartment buildings now rising in its place.

That complex, along with Victories Square apartments, operated by the Little Traverse Bay Bands of Odawa Indians; and Lofts at Lumber Square will offer about 300 new rental units when fully built, the first new apartments in Petoskey in 20 years, according to Devitt of the Petoskey Chamber.

Construction workers in safety gear stand on a blue lift while installing exterior materials on a newly built multi-unit apartment building under an overcast sky. — Workers add lumber trim to a new unit at The Block at Petoskey, a new apartment community east of the downtown, on Thurs., May 7, 2026. (Kathy Kieliszewski/Bridge Michigan)

A man wearing sunglasses and a dark coat stands outside the Lofts at Lumber Square apartment complex, a modern multi-story residential building with brick and siding exterior walls. — David Shuman, principal broker at Bay North Realty, talks about a new development called the Lofts at Lumber Square east of downtown Petoskey. The new housing is meant to help the community’s shortage of affordable housing. (Kathy Kieliszewski/Bridge Michigan)

Some of the units are reserved at below-market price for lower-income tenants who work in the area. The Lofts at Lumber Square is managed by a nonprofit and are designed to “meet the needs of our … middle-income community members … who work here, but still can’t find an affordable place to live near their workplaces and schools,” according to its website.

Those apartments are a good start, said Devitt, who cited a study estimating that Emmet County has a shortfall of 3,300 housing units.

“Housing is economic development,” Devitt said.

Murphy, the mayor, and school superintendent Leslie are holding some preliminary conversations about the possibility of using some school district property for housing.

A local wood and construction company, Manthei, tired of learning that workers were sleeping in cars or campers, decided to build a comparatively low-cost housing complex

Pine Pond has sites for 130 manufactured homes, ranging in price from about $225,000 to about $375,000. The property remains owned by the management company, so homeowners don’t have to pay property tax.

About 30 units are built now, as part of an effort to provide homes for “the workforce population” that has been squeezed out of housing in and around Petoskey, said Abe Manthei.

And a nonprofit called InvestMitt Cooperative is attempting to raise money from the community to purchase and maintain homes.

The initial goal: to purchase a 24-unit apartment complex and rent the units for under-market value of about $1,000 a month.

“We don’t have to convince people there is a crisis,” said founding board member Derek Shiels.

“They all know it from their own families or friends.”

The Petoskey Chamber’s Devitt knows it’s odd to complain about her community being too popular. But it is a problem, and one that the community is going to have to figure out.

Meanwhile, her phone keeps ringing.

“If someone said, ‘Petoskey, here’s $10 million, go build whatever you want,’ it’s not that easy,” she said. “And it’s still not going to be enough.”

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