“Does this property have high-speed internet?”

This is one of the first questions almost every real estate agent along the North Shore has heard over the past year. People are taking advantage of their work-from-home opportunities by purchasing second homes in the less-populated parts of the Northland.

Chris Galler, chief executive officer of Minnesota Realtors, said in addition to high-speed internet, many buyers are looking for properties with extra bedrooms to be used as office spaces or home-school rooms for their children. The coronavirus pandemic has given many people the ability to work and learn remotely.

“With that flexibility, people are recognizing that they want to be located where they can enjoy their free time off more easily,” Galler said. “Instead of a weekend trip up north, it’ll be a weekday trip down to their job.”

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Small towns along the shore of Lake Superior in both Minnesota and Wisconsin saw increases of at least 20% in property sales in 2020 compared to 2019. Lutsen saw a 132% increase, while sales were up 39% in Grand Marais, 30% in Tofte, 24% in Two Harbors and 20% in Silver Bay. Duluth saw an increase of just 8.5%.

In Wisconsin, La Pointe saw a 110% increase in sales, plus increases of 63% in Port Wing, 57% in Cornucopia and 34% in Bayfield. Superior saw an increase in sales of only 1%.

Larry Dean, a real estate agent at Red Pine Realty in Grand Marais, said the Gunflint Trail also had a record summer. More homes were sold there than ever before, including some that had been on the market for a while. He said many people are looking for a safe, private place to ride out the pandemic.

“I do hear the word 'isolation' — ‘I just want to get away. If I’m going to be isolated, I’d rather be isolated in Cook County than Bloomington,’” Dean said of clients.

People buying second homes in the Northland are largely from the Twin Cities metro area, but real estate agents have had clients from Iowa, Chicago and several people from California who are seeking a place with fewer natural disasters. Some buyers are originally from northern Minnesota and are moving back home with their families or retiring after living in larger cities.

Alex Chapek at Odyssey Real Estate in Two Harbors said that although the real estate market along the North Shore was already doing fairly well, 2020 was a year like no other before it.

“It was wild,” Chapek said. “We sold more than we’ve ever sold before, really. Us and every other real estate office that we know around here set record-breaking numbers.”

Chapek said that resort properties — like the Larsmont Cottages and Breezy Point Cabins in Two Harbors and the Caribou Highlands Lodge in Lutsen — have waiting lists now, when there typically would be dozens of cabins available in March.

Julie Joynes Carlson at Coldwell Banker North Shore in Grand Marais said in addition to vacation homes, townhomes have become increasingly popular. There has also been increased interest in investment properties to be rented out to tourists and visitors.

And the buying boom hasn’t slowed through the winter. Dean said some clients are buying bare land in the winter, which doesn’t typically happen because it’s harder to see the property under snow cover.

“Last winter was pretty good, but not like this one,” Chapek said. “It just hasn’t slowed down. It’s, like, August-busy right now.”

The Minnesota Realtors February market update, released March 10, compared February 2021 to data from February 2020, right before the pandemic was declared.

In year-to-date data, closed sales in January and February increased by 3% in Lake County, 10% in St. Louis County and 228% in Cook County. This year, 324 properties have sold in the three counties compared to 282 in January and February 2020.

Prices are higher compared to last year, too. Median sale prices are $171,000 in St. Louis and Cook counties and $190,000 in Lake County. This is largely credited to the high demand for properties. Fewer properties are going up for sale to meet the higher demand, so nearly every sale ends with a bidding war and a sale price higher than asking price.

Cook County’s supply of inventory, which refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace, decreased more than 80% compared to last February — from 12 months to the current 2.3 months. St. Louis County’s supply decreased more than 55%, from 3.4 to 1.5 months, while Lake County decreased over 62%, from 8.5 to 3.2 months.

Despite demand for property along the rural North Shore, the population remains largely unchanged. Because most are purchasing vacation homes or rental properties, working-class people and young families can’t win in a bidding war with retirees or people buying second homes who work in other cities. This may cause a strain on the local service industry, Dean said.

However, unless more properties go on the market, it could be hard for anyone to get their hands on a new home along the North Shore or Gunflint Trail this year.

“I think that our area is so desirable with the COVID-19 pandemic because people are looking for a healthy, outdoor lifestyle, and that’s exactly what we offer on the North Shore. We’ve got plenty of fresh air and lots of room for outdoor activities,” Joynes Carlson said. “It’s a great place to social distance, that’s for sure.”