Oct 07, 2015 by DC
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Yesterday while you were working, the lake did what it does in October. It went quiet. Sure, the lake goes quiet during the days that came from the last ice out until the coming one, but it generally only goes quiet in the morning, for those first up to fish or ski. Or it goes quiet in the evening, when the last cruise boats push through the night, and the water falls flat. In January, the lake is flat rather often. Those freezing nights and those bright sky days, but those days are of no use to the boating faithful. Yesterday, that was a day we could use, but you were at work.
I have had a complicated boating relationship over the past several years. When I first bought my fishing boat in the winter of 2010, I found time to use it often. On stormy evenings when my kids didn't want to, we fished anyway. And on sunny afternoons when there were emails to send and calls to field, I would do both from the bow of that new toy. But as with most toys, the pleasure faded. It faded because of a smokey two-stroke that would be complimented if called temperamental. The instruments only worked once in a while, and if I trolled with large lures the carburetors would bog down and the boat would cause a smokey scene when I coerced it back to life. Even that wasn't a guarantee.
But it wasn't just the boats fault. It was mine. I switch hobbies like some change tires, and every few years or 30,000 miles I feel the need to indulge in another pursuit. This was the boating pursuit, and that the boat was and is actually a Pursuit is, I assure you, pure coincidence. The boating fueled my fishing, and my fishing fueled the transition to fly fishing. While I fly fish in Geneva as often as it seems reasonable, I prefer the small trickle of a valley stream, and so much of my free time has been spent in that pursuit. While I fished the buoyed Pursuit just collected dust, and spiders. And their webs. And yesterday, in the seaweedy fungus that filled the back of the boat where water is allowed to flow in and out through two small drain portholes, a small maple tree.
Yesterday the inland trout season was closed, and the sun was bright and the water still, and so I fired up the old boat and took it for a ride. It didn't really want to do that, but after some time of trying, the engine teased to life and choked out the smoke from a summer of neglect. I took the boat out and around, cruised some shorelines and sat in the middle of the lake with nothing to do but consider what a shame it was that I left that boat to the spiders and the maple trees.
There was little time to sulk and reminisce, because the water was just too flat and the sun too warm. The forecast called for cool, but the day was anything but. Late into the afternoon I sat there, wondering what could be better, answering the pensive question with an obvious answer: the boat. There were some other boaters out with me, the select few that found their way to their piers and onto their boats on that October afternoon. Fishermen quietly cast their lures and slung their baits. Some remnant Mastercrafts slowly pushed through the calm, throwing their massive breaking waves so the surfer could surf. Sailboats clung to their buoys, wishing for a breeze but finding none. A couple paddled by on their paddle boards, cutting right through the middle of the lake in a way that would signal sure death on a busy August Saturday. The lake was back to the way I prefer it.
While afloat, a text from a friend. He, too, was on his boat. He, too, should have been working. He, too, had some flexibility and he, too, found his way to this lake on that day. But after finding my way to his boat he had more sorrow than joy. His boat would need to be pulled from the lake this week, no later than the tenth of October, so sayeth his association. Then this morning, a call from my dad. He needed help. Had he fallen? No. He needed help pulling his boat from the water, on the most beautiful day of the year, on the stillest moment of the day, at the beginning of the best boat month on the calendar. Now at this computer, I'm distracted by trucks. Trucks towing trailers. Trailers with boats. Boats not heading to the lake but from it. From the lake and to dusty storage barns where they will be tucked in for the winter, on the most beautiful day of the year.
This is the fall rush. It happens because the old people are in charge of the boating world. They run the associations that tell us we must remove our boats. They live in fear of the first frost, of strong northerly winds, of changing seasons. I, on the other hand, live in fear of missing the opportunity to sit on a boat on a day like this one. Which is why I play chicken with winter each and every year, choosing only to remove my neglected boat from the water once I need to break some ice to clear a path to the launch.
Today, two words of advice. Call in sick. Get to the lake. Sure, Sunday is going to be warm, but Sunday is many days from now. Today is warm, you have a boat, your association or your pier guy is old and wishes you to remove your boat immediately so that he doesn't have to break ice to remove the pier. The second word of advice is even more simple. If you own an association home and you wish to no longer be forced into this sin of early boat removal, you have one very easy way to fix this. Buy a private lakefront house with a private pier. Then you can be like me, and we can remove our boats only when the snow flies. This way, we won't miss the days in October and surely some in November that will more than justify our irrational decision.
Oct 05, 2015 by DC
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I built a real estate office at 57 West Geneva Street. I did this because I needed a place to work. You'd be surprised to learn, or maybe you wouldn't, that Realtors often work from home. This work is equal parts appointments and office work, but the office work is just phone calling and typing, and if you own a home without small children clamoring about, you could easily do this from home. I have clamoring children, and so I have this office. I sit here and I type, I call, I sit on the couches and read. This is how I office.
The traditional real estate office is nothing like mine. I use my office to work, whereas other agents use their offices to generate leads. This is why there are offices in downtown spaces that lack convenient parking. Who cares about parking when you have so many people walking by and in, seeking condominium rentals on the north side of Elkhorn? One step further, this lead generation is why there are offices at the entrance to Geneva National and Abbey Springs. These are offices engineered, successfully so, to dominate the activity in those developments where they reside. This is a good plan, and it works.
But what it doesn't do is stop the effectiveness of outside firms within those gated boundaries. It is true, the broker that owns those two offices inside those two developments carries out the bulk of the business within those boundaries. Is this a good thing for the consumer? Is this the only way to find success within those gates? If property is owned in either GN or Abbey Springs is the only way to either buy and sell to employ the on site broker? Of course not.
This spring, I listed the home at 62 Saint Andrews Trail in Abbey Springs. It was a fine house, and I only represented the sale because I had previously worked with the owner on other endeavors. As those were successful undertakings, I was employed. Once employed, I struggled to find my bearings with that home. I struggled to understand the market, to understand how to incentivize other agents to bring me buyers. I struggled because I was an outsider. I struggled because I didn't have an office inside those gates.
Just kidding. I didn't struggle at all. I closed that sale last month for $746k, but only after fielding two offers one weekend and locking in the better bid. The same situation holds true for a property I recently listed in Geneva National. Outside agents, or so the story goes, can't have success in the associations without access to the prized walk-in traffic. But that new listing in Geneva National found a buyer rather quickly, just like the Abbey Springs listing.
Moral of the story; sometimes an outside approach works as well as the standard approach. Find a competent agent. Hire the competent agent. Make sure your agent incentivizes the agents to sell your house. Then, sell your house. This isn't really that hard.
Oct 02, 2015 by DC
I'm not going to say what I want to say. I'm not going to say that a house with a modest 110' worth of cliff frontage shouldn't sell for five million dollars. I'm not going to talk about the work required to take a basic parcel and turn it into an estate-type parcel; the landscaping, the tennis court, maybe a pool. I'm not going to talk about fit and finish, about what constitutes high end construction and what does not. I'm not going to do any of those things, because a sale is a sale, and the market tells me what it expects and doesn't really concern itself with what I expect.
The house sold last week for $5.1MM (I wasn't involved in the sale). That blue house, the one high on the hill just north of Gordy's. It sold. It was first listed in 2014 for $6.25MM. Was the home worth $6.25MM? No. And the market proved it, allowing the house to sit and stir on the market for the majority of that year and into this one. Throughout that time, buyers presumably came and went, opting for other things, or for nothing at all, over this house on the hill. But the house had some style, and it had some polish, and it was new and of a contractor pedigree that means something here, and so the house attracted interest but failed to achieve the only measure of interest that matters: A sale.
What happens next is some intrigue, some subterfuge, and disappointment. The listing expired and was removed from the market, but the market knew the home was still for sale. And so it went, a house off the market, an aged asking price that never fell below $6.25MM. If you were simply computer screen watching, as 90% of agents do, you might have been surprised to see this property print in the MLS this week with a $5.1MM closed price. We do not computer screen watch.
The sale now closed was handled by an agent other than the agent that brought the property to market at that lofty price in 2014. The agent who closed the transaction was not the agent who toiled at the high price. This was not the agent that knew the market would react differently to the property if it were listed in the middle to upper fives, rather than the low sixes. The agent who did the fine job of selling this home last week was not the agent who introduced the property to the market, who broadcast it to the agents, who made known the quality and the importance of the home (even if I didn't agree with the level of importance). The property sold via another agent, and the market, those uninitiated who follow from afar by watching Instagram screens and Facebook posts, will assume that some heroic event was made possible by the introduction of a new face.
When I took over the South Shore Club marketing in 2012, and promptly began selling both homes and lots with a regularity that the market there had never experienced, was it because of me? Was I so much better than the prior representation that I somehow convinced the public that this South Shore Club was worth their time and money? Was I a star who brought with my power of personality and made this development matter again? Or was I just the guy who came on the scene, with messy hair and pointy shoes, and convinced the sellers that the price structure was wrong, and that if they would oblige my suggestion they would find success? It's the latter, which is why I didn't take out full page ads telling you how tremendously effective I was. I was merely the person at the helm when the market heated to such a level that success was the only possible outcome.
The same likely applies to the blue house on the hill in Fontana. Was this some feat? Was this a sale that wouldn't have happened if not for a change in agent or broker? Of course not. This was a sale, like most sales, that had everything to do with price, and had the price of that $6.25MM home been dropped to $5.3MM (the ultimate list price when the property sold) I would suggest that anyone of a 100 different agents in this town could have played the star role. And all of that goes back to this. On television, red carpets and Burning Man parties sell houses. In Lake Geneva, just hack off your price a bit and make your agent a star.
As a market aside, this sale was high. There were multiple parties interested in it, but it was still high. The premium was paid because Fontana is a desirable locale, and new construction in the $5MM range generally doesn't exist. Buyers can convince themselves to spend $5 something much easier than they can convince themselves to spend $7+. No matter that $7+ gets you a product like 1014 South Lakeshore, a property so vastly superior to the blue house on the hill in every possible measure. Compression is the high end buyer's friend here, and if you can swing $5 something, better reach a bit and spend $7 something, because that two bucks you left in the market is now worth $1.6 bucks, and a house is so much more fun.
Sep 30, 2015 by David
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Without the weather, what would we talk about? When I meet someone new, what would I open the conversation with? If I couldn't say, what a day!
or, cold enough for you?
or, it's freezing out!
then what would I say? I'd have to recreate my entire game, based about something new. That's one heck of an outfit today. Who knew a green shirt and a green sweater could work?
But then they'd know I was being insincere, and they'd wonder if I was really the right agent for them. They'd ask me, who was the president when you last combed your hair?
Things would fall apart rapidly, and society would ultimately tear apart. The weather, and the way it makes our initial conversations so easy, this is what holds us together.
This summer featured two distinct seasons. First there was faux summer, that being June. The month of June is a month when every self respecting vacation home owner should be at their Lake Geneva home, but it is a month where the weekends are a gamble of epic proportions. Consider the weekends of June. This may be a title of my someday book, if I can ever figure out how to write more than 800 words at a time. The four Fridays of June were four difficult days. Fridays are of paramount importance to the vacation home set, as even though they are the shortest of the weekend days, by virtue of most arriving to the lake when the day is nearly over, it is important because the weather of that day usually sets the tone for the weekend. A sunny, warm Friday makes the transition from city to lake a celebrated event. A cold, dreary Friday makes the drive still important, but the celebration muted.
The four Fridays in June featured high temperatures that averaged 10 degrees below the historical norm. This included one particularly dastardly Friday where the temperature climbed to 62 degrees fahrenheit. The average for that day was 76 degrees. This is an epic fail, and June was both somewhat cold and oft rainy, and that's why June was terrible and should be forgotten. Also, only 11 of the 30 days that month reached temperates at or above the historical average.
Summer started, rather abruptly, over the Fourth Of July Weekend. Capitalized because. Once summer began, July was pretty nice, and so was August. There were a few cold bits here and there, but nothing lasted and mostly we had generous sunshine and average temperatures. It was a good summer, but it wasn't a hot summer. Lake Geneva recorded only 1 ninety degree day, though there were several high 80s days, and those are indistinguishable from 90 degree days, especially if I'm wearing a shirt of some sort. Really, looking back, July and August were about right, and days were warm and nights were cool, and all was right with the world so long as your world had you in Lake Geneva with frequency.
September ends today. It ends with a 64 degree sunny day, where the only clouds are puffy and white, littered here and there but certainly not everywhere. September began with this bright sky, and the month continued mostly uninterupted with this perfect weather. There was a wedding weekend in September that required fine September weather. Events were to be held outside, under the open air, without a tent in sight. Lake Geneva was up to the task and delivered a perfect early fall weekend, with sunshine and pleasant temps and a noticeable absence of humidity. The month continued and it continued warm and dry, sunny and full. Last Saturday I sat on a lakeside lawn for some time and thought that if a day could be any more perfect I'd rather not know.
So here's to September. Here's to the summer bookend that performed perfectly. Here's to the month that makes me hate June even more. Now I must think of October, and while I push back against pumpkins and dried corn in September, I welcome them in October. September isn't the gateway to anything, it's just the most quiet and predictable month of summer. October is the true gateway, and I'm ready.
Sep 28, 2015 by David
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I watch the million dollar shows on television. I used to think I liked those shows, because they portrayed Realtors as being cool and hip, and Realtors have, since the advent of the Realtor, been sufficiently anything but cool or hip. I liked the new Realtor, and I liked that the industry found a way to reshape their image. I don't really feel that way anymore.
I like the fancy cars and pointy shoes as much as the next guy, and I appreciate snarky comments and faux conflicts, but there's some damage being done to the industry if you look beyond the pocket squares and excessively gelled hair. While we've become accustomed to watching these television agents dance through negotiations and coyly bluff each other over drinks at a fancy bar (the deals always come together), the bragging about setting new records and beating the market has convinced much of middle America that this new game isn't about facilitating market transactions efficiently and competently, but rather it's about the gimmickry that can, or in the case of the show, always, leads to beating the market.
My market beating experience this year just played out last week at the South Shore Club. I saw there the last two sellers, those owners of lot 8 (unbuilt), and lot 7 (built). When I took over the South Shore Club marketing in 2012, these two parcels were for sale. When 2014 faded to 2015, both of these parcels were still for sale. Both properties held the lofty expectations of their owners, and if both parcels had been in Beverly Hills I likely would have sold them both to foreign investors and then tap-danced my way to a champagne lunch. But this is Lake Geneva, which is, if you've been dawdling, a small resort town in Wisconsin that caters almost exclusively to the Chicago affluent. It is a beautiful area, but it is to Beverly Hills what I am to an olympic decathlete.
These two properties weren't catastrophically flawed. They were South Shore Club properties, owning all of the luxurious amenities that every other club property owns. They were on a dead end cul-de-sac, on a street that hosts a total of 8 parcels. In the time since these two properties were listed, nearly every other property on the street sold, and every buyer that bought on the street looked at these two parcels and said no thanks.
It wasn't that these owners weren't trying to sell. The vacant lot #8 switched representation a handful of times in an attempt to rouse a buyer through a different narrative, a different set of pictures, a different approach. That failed. The lot 7 owner, whom I was pleased to represent, chopped the price consistently. He re-painted. He removed the furniture. He had a pre-inspection performed (some agents love those now). He took the property off the market and then put it back on. He chopped the price some more. New pictures were taken. A new narrative written. After several years of efforting the properties had several serious looks, several seriously interested, and dozens upon dozens of showings, yet both sat unsold.
When both parcels sold last week, they sold for the reason that Lake Geneva properties ultimately sell. They sold because the prices were cut to a level that the market accepted. They didn't sell because of pointy shoes or gelled hair. They didn't sell because the Realtors drove shiny cars. They sold because the market had rendered judgement on them, and in order to find a buyer they both had to sell cheap. I sold lot 8 last week to a buyer of mine for $420k. I sold lot 7 for $1.45MM. These prices were discounted, tremendously, even as the remainder of the market appreciated. Importantly, these two parcels represented the last two available pieces of aged inventory in the South Shore Club. From here on out, any sale in the SSC will be something new to market, and that's exciting for everyone that has played a role in this development over the past 14 years.
Did these parcels fail to sell years ago because the Realtors were somehow bad? Is it because the Realtors couldn't manipulate the market to suit the individual needs of their clients? Well, no. Of course not. The properties didn't sell because beating the market isn't just something that supposes one side is extremely naive and gullible, it's also very difficult to do, unless of course we were in Beverly Hills right now.
Sep 25, 2015 by David
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Crain's Chicago Business has a fun little column that appears on Thursdays. It's called Ten Things To Do This Weekend. It is a nice list. And it's good for Chicago area events and businesses, because it supposes that everything there is to do on a weekend should happen in the city or the suburbs. The events are wildly varied but somehow all the same. Come visit a three piece cello band while they play you their greatest hits at some outdoor place in some suburb. That strangely sounds the same to me as a painting class at some university under some tutelage of some artist, who painted some piece that no one has heard of. See, the things are very different but somehow both the same.
The list fails most, because anyone with any sort of sense knows that if you live in the city the weekends are for anything but the city. If you live in the suburbs, and you're not tethered to your child's soccer or baseball schedule, you also know that the suburbs are lame and that you should leave them whenever possible. This list is, at the very heart of it, what's wrong with the thinking of most city and suburban dwelling affluents. Tuesdays you have little choice where you'll be, but Saturdays? Well, Saturdays you could either make the hour drive from Naperville to Millennium park to witness the first ever Basketweaving While Blindfolded competition, or you could point your car north and drive as fast as possible. I choose North.
And why wouldn't you? This weekend, like all weekends, there are things to do at Lake Geneva. But this weekend, unlike all of the other weekends, there's a wood boat show. That's not really fair, to call this a wood boat show. Because it's not a show, it's the show, and if you're anyone who appreciates fine things, you'll be here. Note I didn't say you had to appreciate wood boats. That's the same reason I don't think you have to love golf to live on a golf course. It's nice to look at something that's beautifully maintained, no matter if it's a sprawling green golf course or a highly polished wooden watercraft. Nice is nice, and if it's at Lake Geneva it's usually nice made nicer.
The show takes place Friday, Saturday, and Sunday at the Abbey Harbor in Fontana. The forecast, as you may have noticed, calls for 75 and sunny on both Saturday and Sunday. The real highlight of the show is the boat tour that happens today, Friday. This tour is mostly missed by the casual boat show attendee, as those patrons visit on Saturday and Sunday, oblivious to the fact that they missed the most important event of the weekend. Then again, if you're reading this right now you've likely already missed the Friday portion and you're completely and utterly out of luck. But still, come Saturday or Sunday and you'll enjoy the finest wooden boats in the country as they ply the finest lake in the Midwest.
Sep 23, 2015 by David
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My oldest friend had a birthday yesterday. He's not old, he's my age, but it was his birthday and he is the person who has been my friend longer than any of my other friends, so he's my oldest friend. We will generally fish on our birthdays, either on the exact day or near the day, but yesterday was a day that neither of us could fish, and so I invited him to lunch. You pick the place, I said, in a generous birthday tone. When he said that we should meet at Manny's Snack Shack in Twin Lakes, it was too late for me to renege. I had already made it sound like I was available, and though I tried to get him to meet me in Lake Geneva, on this side of that county line, he refused. Manny's it was.
You'd probably be surprised at how many local agents, Experts, they'd say, have trouble finding their way around Lake Geneva. I've had agents who proclaim themselves to be Top, and other things, get lost en route from one place they should know to another place they should know. I don't get lost at Lake Geneva, because Lake Geneva is in my blood and how can one divorce himself from his own DNA? But as I mentioned on Monday, I am not an expert in all things, though if you saw me throw an axe into a chunk of wood you'd be forgiven for assuming that I was. Twin Lakes is an area near here, but so far away. So I relied on my GPS and set the location. I would drive to the Twin Lakes, which lake of the two I was uncertain.
The route from here to there is not that difficult. I drove East on Highway 50, and when my car told me to, I turned to the south. This was an unnatural turn, one that I only typically make in order to perform a U-turn. The road was unimportant, but it was something like 386000RTW50th Street. I paid little attention, because soon I was to turn on 99820th Avenue 4, before veering slight right onto EWP County Highway. I stayed on that Highway for a bit, then took a sharp right followed by a sharp left. I was leaving the corn fields and arriving into a town. I saw a lake ahead, and while I knew I was on 3860000RTW50th Avenue, the sign ahead beckoned me. Lake Avenue, it said.
Now, if I had just fallen off the turnip truck and I saw this Lake Avenue sign, I might have been convinced. But I am not so green that I can't see a 386000RTW50th Street when I see one, and while Lake street urged me to consider that it was indeed Lake Street, I knew better. This was a county road, with a hugely long and uninteresting name, masked under the guise of a more friendly vacation home street name. I sat and ate with my friend, and while everyone else thought they were dining near a lake on Lake Street, I sat and wondered how they could be so gullible. At one point I almost stood and asked the patrons to consider their mistake, to understand that they were not dining casually on Lake, but instead they were lined up on 386000RTW50th Street and no one could ever enjoy such a setting. I imagined the name wasn't Manny's but Lake Street Diner. How the people would love that name, and they'd eat there in their flip flops and they'd feel at one with the area, at one with the lake, at one with that street. But 386000RTW50th Diner would have gone bankrupt years ago.
Having eaten enough food to last for days, I drove back, following those confusing directions posted on my car's display. When I made it back to Lake Geneva, I noticed my surroundings, and the things that we've named our routes. Wrigley Drive. Basswood. Snake. Folly and Bonnie Brae. Constance and North Lakeshore. Linden and Glenwood. Ara Glen and Hollybush. These aren't masked highways at all, these are pure street names, vacation home names, and they provided me with great relief after the journey I had just endured.
I've thought often about buying some land in the country, far from here where I might fly fish once in a while. I look for this land somewhat often, and when something pops onto my MLS screen I judge it before clicking on the pictures. I see a street name "HIGHWAY NN", and I know I can't buy it. I see COUNTY LINE S and shake my head, that can't be for me. I can't buy on such a road when I know that roads like OAKSTAAD and LOVAAS RIDGE exist. How could I tell my friends to go to my house, the one at 39W50RT COUNTY HIGHWAY NN? I want to tell them to take that highway for a bit, when veer right onto HORNBY HOLLOW. I could live in a Hollow, just not on a highway.
Last week, a closing in Lake Como. The property was nice, the price fine, the market something other than what I know. But the street name was interesting, and it further makes my point. Street names matter. The latest Como sale was on URANUS Street. Maybe it's a road, I don't know. It doesn't matter. If you're ready for a lake house, I'll be over here, at 57 West Geneva Street, which sounds so much better than all of the alternatives.
Sep 21, 2015 by David
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When a real estate market is slow, the fundamentals matter. The price per front foot, price per square foot, of the land, not house- this isn't Beverly Hills- it matters. The prior sales price, the current list price, the expected discount to ask and the all time highs against the current cycle lows. This is the sort of research that matters in a down market. This sort of thing mattered in Lake Geneva, at one time, back in the good old days of 2010, 2011, 2012, 2013, back when market context and market forecasting was everything. RIP, days when things mattered.
Don't get me wrong, they still matter to me, to those among us who seek value in times good and bad. All of those things will always matter to me, which is why I'll likely spend the remainder of my working days loving tumultuous market times and tolerating times of hyper lift. It's easy for Realtors who lack a greater degree of curiosity to see a rising tide and throw everyone into the sea. Leave your fancy math behind and jump into the water! Quickly, we haven't much time!
This is what they say, and this behavior is an insult to my intelligence but mostly to yours.
Delavan Lake this year has performed remarkably well. There have been no fewer than 11 lakefront sales, which is nice, but most impressive is that six of those have closed at or over one million dollars. Nice job, Delavan. I hope that most of those sales occurred in the winter, early spring, or the coming fall. Those are the times when the water rests a bit, and if you weren't a student of water clarity (I have my PHD) you'd be forgiven for thinking the water is fine there. The sales mostly make sense, and even the outlier that closed last week makes some sense. But this is before you consider the prior sales activity- the peaks at the high and the supposed valleys at the low. Things look fine, until we dig a little.
If we throw out the highest lakefront sale at $1,599,000 and consider the other 10, the average lakefront sale this year printed at 84.4% of the ask. The top sale, the one mentioned prior, closed at full price. That's 100% for the math-hating-market-hypers. I was about to demonstrate the egregious price per foot difference between this top sale and the others, but Delavan Lake is an odd bird and doesn't really follow any rough price per foot outline that can be trusted. It's especially difficult on a lake like Delavan, where some spots you can walk on water due to weed growth, and other spots are more lake like.
That property had closed in the fall of 2008, at what was likely very near the top of the market, for $1.425MM. It sold again in 2012, at what would have been the bottom of the market, for $1.3MM. For perspective, the nearest priced sale to that one, a victorian style Delavan lakefront that sold for $1.44MM this year, had sold for $1.657MM in 2012. Some of the other sales on Delavan this year also sold prior in 2012, and some sold then for less than the recent 2015 sale, while others sold for less. It's this sort of research that should be done for these sorts of sales.
I am not, as you have noticed, a Delavan Lake expert. I don't want to be such an expert, and I never will be. I'll leave that to the agents who are actual experts on that lake, of which there are several. I'll stick to Geneva, and I'll do that because this is the market that I know and understand, and this is the market where most pricing makes some level of sense. The two full price off-water sales near Geneva this year, one at $1.475MM and one at $2.2MM aren't included in that prior statement.
Today, there's a very serious admonition. Pay attention to the numbers. Pay attention to the market cycles. Pay attention to prior sales, prior failed marketing attempts, and future downside. Just pay attention. If you have an agent that's not from this market, one that wishes to be part of the market solely because our prices are nice and rich, then suggest to that agent that they keep your best interests in mind and refer you to me. That's a terrific way to pacify your city agent and gain exposure to some high caliber local knowledge. After all, we can't be experts in everything, which is why I've spent my life trying rather hard to be an expert in all things Lake Geneva and nothing else. Delavan Lake? Why I barely know where it is.
Sep 18, 2015 by David
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At first blush, it makes no sense. Why, after so many years of a predictable pattern, are homes in excess of $4MM selling so frequently and easily in 2015? The hedge funds had their huge year in 2011, making it reasonable to expect 2012 and 2013 to be high flying years. The same years, the stock market gained and gained, allowing those with large scale equity investments to cash a bit out and buy real estate, if they so properly desired. If this upper bracket buyer was sensitive to interest rates, they've had years and years of them. The catalysts have been in place for several years, so why 2015?
I think it's private equity. You have Midwestern businesses of varying sizes and industries selling at premium prices. The simple logic goes like this. Mr. and Mrs. Businesspeople own a lake house. Because they're successful in business and obviously intelligent, well rounded sorts, they own their lake house at Lake Geneva. Their lake house was bought when they ran that business, the one they spent so much time building. They bought that first house with revenue. Private equity found them, negotiated with them, and now our friendly business couple who already loves Lake Geneva just sold their business for many times earnings. They were rich before, revenue rich, but now they're lump sum rich. Would it be strange to expect them to flip out of a $2MM lakefront and into a $5MM lakefront? Of course not. The lakefront market on Geneva has had a tremendous run at our upper range, and I say we owe it all to private equity.
You've likely noticed that I haven't been writing market updates every day. I haven't been doing this because the market is hot, and I grow tired of saying that. It's hot! I say. Everyone else says it, too. They say it with fewer words, sometimes just breathless gestures, othertimes with pictures, but they're all saying it. The market is hot, it's active in all segments, and 2015 is shaping up to be a banner year. I think that would be boring to write about three days a week, so I sometimes choose to enlighten you with other meaningless tidbits.
The entry level lakefront has been offering up some tasty deals this year, and up until recently the market has mostly failed to take advantage of the ample inventory. This last week, two entry level homes have gone under contract. One near Abbey Springs, as in not sort of near, but right smack dab on top of it. Listed in the $1.1s, this home was cheap enough and a buyer finally looked past the oddly complicated approach. The other home was another that suffered through a slug of showings and a systematic chopping of the price. This Lake Geneva Highlands lakefront is now pending sale with an ask in the mid $1.3s. Think the market finally caught fire and gobbled these up because they feared they'd never find something quite so good? Think again. The prices came down, and buyers bit.
Other lakefronts under contract include a private listing in Geneva Bay Estates for $2.65MM, my listing on Bonnie Brae for $2.995MM, a lakefront lot in the Elgin Club ($1MM), a shingly thing in Cedar Point in the mid $2s, the bombed out cottage ($879k) shell near George Williams, an old house on the hill in Glenwood Springs in the high $1s, and the large Baywood Heights-ish ranch on Basswood just under $5MM. My listing in the South Shore Club is pending sale, as is the Pickell built home on the hill in Fontana. Expect sales of both within a few weeks. There is an offer on the large Fontana lakefront listed in the mid $4s, so let's expect that contract is put together. That's the sort of buyer that would have been better off looking seriously at 1014 South Lakeshore in the $7s, as the all in number for a land buyer in the $4s will likely far exceed $7.
The lake access market is active as well, with buyers reaching back towards off-water homes that lack slips in the $600k range. This isn't a range I love, unless the house is somehow special. A boring house on a boring lot that lacks a view or a slip in the $500s? I'll pass, thank you. For all the activity, I still see value in the sub $550k price range. There are some winning properties with slips that can be bought around $500k, and there are some reasonably nice lake access homes in the $300s that look interesting to me.
The lakefront condo market is just okay, with plenty of inventory and plenty of value offered. There's a pending deal on another Geneva Towers unit, as the developer who wished to transform the condo market there has mostly, by my math, maybe broken even on the effort. Maybe he's made a fortune, but it looks to this outside as an endeavor that maybe wasn't worth the effort. Abbey Springs housing is hot, with three single family homes pending sale there priced over $550k, including my listing on Saint Andrews for $765k. Geneva National is similarly active, with loads of interest in the condominiums and single family homes. I have a deal pending on one of my Terrace Court condos, and another contract pending on the GN Saint Andrews.
What to expect this fall? The same. The market is active, deals are plentiful, and buyers have largely pushed aside any concerns over the stock market tumult. If buyers wish to make 2016 a lakeside year, then they'd be wise to begin the process now. Not in January, not in March, but now. Start the hunt. Identify the target. And most importantly, avoid disastrous decisions by letting me be your guide.
Above, my newest listing. An Eastbank townhome with 3300 square feet of brand new luxury. Four bedrooms, four baths, canopied slip, two car garage, lake views, and so much fancy. $1.299MM
Sep 16, 2015 by David
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I took my car in to be fixed. The mechanic was nice enough, the dealership shiny and large. Emblems and logos, everywhere. I normally sit in the lounge, where they have a chef that makes sandwiches and soups, one of each per day, as well as some cookies and snacks. I like that lounge. I brought my car in because it made a rattle that I didn't like, and so I sat in the lounge while the mechanic determined the cause. I wondered if the noise came from the wheel. But it couldn't come from the wheel because I felt it in my seat when I went over a bump. Maybe it came from the chassis, though a rattly chassis would be much worse than a rattly wheel. I waited. What was taking so long?
The mechanic's name was Jeff. He had greasy hands and greasy nails, and I thought that there would be no way for him to clean those nails. I thought that some days he must have his hands perfectly clean, and when he does he probably looks at them and makes sure people notice. Like he's a hand model. But he was under the car, standing there with a flashlight, looking at the various parts and thinking. I know he was doing this because I left my seat in the lounge, threw away the paper plate that my chicken pesto panini was served on, and walked around the parts department to the shop. Then I stood under the car next to Jeff and turned the flashlight on my iPhone and stared at the underside of the car as if I had seen one before.
I had, after all, once almost changed a tire. I had a flat when I was driving to Minnesota, and before calling AAA I had considered changing the tire by myself. I even looked around for the spare tire, but when I realized it was in the trunk, under a bunch of things I had packed for my trip, I decided against the action. I suggested to Jeff that this metal rod might be the culprit, and I reached up and shook it violently. I told him that he needs to consider that the rod is the problem, and that we needed to sit down and have a meeting about it, because I, the person who nearly thought about chaining a tire once, have determined that this is our problem. The tie rod.
Jeff ignored me, even though I shook the tie rod again to remind him that it wiggled when I did so. Jeff said I should leave the shop now, because I "didn't know what I was talking about". I told him that this was no way to speak to a customer, and he told me that's why there are nicer men and women with name tags who work at the computers outside of the shop, the ones who don't have greasy nails. He said I should leave. I asked about the tie rod. He said it wasn't the tie rod. I shrugged my shoulders and said it was the tie rod. Then I fired him and took my rattly car down the road to another dealer, where I stood with a mechanic named Brian and shined my iPhone light under the hood with him.
I didn't really do any of these things. But I do speak with sellers every day, and I am as Jeff, or maybe Brian, and they are me. They tell me that they know better than I do. That the market isn't really a market, but rather the market behaves in the way that brokers tell it to behave. The suggestion is that if the brokerage community gets together and enforces a strict $5MM minimum list price on all lakefront homes that, in some time, this will be the norm. A 50' lakefront home will sell for $5MM, and a 200' lakefront home will sell for $5.5MM. Sellers of unique or otherwise overpriced properties have terrific ideas as to how to accomplish those market defying goals, except that all of their ideas are the equivalent of me, violently shaking that tie rod.