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Lake Geneva Price Reductions

Lake Geneva Price Reductions

Tis the season for one of two things. Ambivalence is the most popular option for mid November. Why pay attention to the market when it’s just so easy to eat pie and pretend your weekends aren’t awful and boring? Sellers find and embrace ambivalence today as well, accepting that the market will slow to some degree from now through the earliest part of 2018. In spite of this holiday pause, there’s reason to doubt that several deals will come together over the next six weeks, as the market never actually sleeps. It just rests its eyes once in a while. Because of this, some sellers will remove their property from market (mistake), and others will just continue on as though everything is fine (it likely will be). But some sellers are November price cutters, and those are the sellers we’re looking for.

Last week I dropped the price of my large Basswood estate from $9.75MM to $8.995MM. This is a meaningful price drop, and it wasn’t easy to achieve. Buyers in this strata should take another look at this property, as it offers too much to be ignored. Large frontage, deep property, perfect location. The house itself is large, easy to understand, and ready to host an easy surface renovation.  There are many estates on Geneva Lake. Many amazing estates. But there are very few that are complete. What do I mean by complete?  I mean a property that’s large enough to feel important. A house that matches. A swimming pool. A guest house. A large pier.  Combine all of those elements and you’ve got an estate. Basswood? It’s an estate, and I just put it on sale.

Another listing of mine that’s been struggling to attract a buyer is my modern home on South Lakeshore Drive now listed at $1,095,000. I don’t feel as though I’ve done a very good job explaining this property to the market. It seems as though, after so much market time, the property should make sense for someone. I know it makes sense in the market. I know it’s a screaming value. The house sold during the prior peak for $1.5MM and change. The house sold at that level because of what it offers. Immense and rare privacy. Loads of square footage over four finished levels of living space. Transferable boat slip. Situated on the lake between massive estates, with lake views and nothing but a few trees between the house and the water. This is a lakefront house without private frontage, and it’s downright cheap. If I’m a buyer around the million dollar mark, this is a house I’m looking at. A tiny smear of lipstick and it’ll be a fantastic lake house.

My new listing on Outing in Williams Bay ($1.699MM) is offered today at a reduced price after initially coming to market just under $2MM. These are the sorts of sellers you want to find. The motivated ones. It’s too convenient today for sellers to sit back and wait for the market to come to them. After all, there are several 2017 examples of this happening for aged lakefront inventory. But I’m writing today to buyers. I’m writing today to those you don’t want to throw caution to the wind. If you’re throwing caution to the wind,  other agents specialize in that, not me.  I’m assuming there are still buyers who want to find value, and if that’s you, then let’s chat. We can aggressively look for new inventory and pounce if it’s right, but I’d rather comb over aged inventory and see if we can find a seller who’s ready to play ball. The myth of this market is that every seller is overly confident and every seller is holding out. The reality of November at the lake (and December for that matter) is that there are still sellers who are ready to sell. They just need a value minded buyer (and that buyer’s dashing agent)  to convince them that the time is right.

 

Above, the pier at Basswood. $8,995,000
Affordable Lake Geneva Vacation Homes

Affordable Lake Geneva Vacation Homes

Some would say that title is impossible. After all, load into a tour boat and take a trip around these shores and there’s very little that looks particularly affordable. Even the homes that look affordable come with seven figure asking prices, albeit low seven figures. Lake Geneva has historically been home to significant wealth, and the trend in recent years has only accelerated that status.  Several years ago a $10,000,000 home on this lake was viewed as a fortunate albatross.  It was neat, and lavish, but it didn’t make any particular sense, even for the wealthy. Today, a $10,000,000 home would be met with immediate buyer interest, as the liquidity that traditionally dried up around $5,000,000 now meets little resistance up to and through double that amount. Yes, Lake Geneva is for the wealthy, everyone knows that.

But that’s not where the story ends. Because Lake Geneva isn’t just for hedge fund managers and successful entrepreneurs. It’s for anyone who desires something different. It’s for everyone who wakes up on a Saturday morning in the summer and wonders what they’re going to do that day. It’s for those who are stuck in traffic on a Friday night, but not in the northbound lanes. It’s for those with the means to change their weekends and change their motivations, even if that doesn’t allow for a lakefront home or a lavish off-water spread.

Yes, you could buy a cottage in one of our area towns for $80k and use that for your summer house. That’s perfectly acceptable, and encouraged. But let’s assume you’re not looking to buy squalor. Let’s assume you want something easy, something low effort, something large enough to contain your family and/or friends in some form of luxury. If you’re thinking I’m going to suggest a tiny home, please read this bit on the folly of the tiny home. No, I’m suggesting a condo. A simple, easy, two or three bedroom condo. Something affordable. Something in the scene. Something that allows a weekend to be entirely and completely different from the 9-5. If you’re looking at Lake Geneva, as you should be, these condos have names and well defined price brackets. If you can spend $180-250k, you’re in luck. Lake Geneva has sensible, stylish options for you, too.

I’ve written about this particular segment often, because it deserves inclusion in any vacation home discussion. The condominiums that I find appealing in this segment include Abbey Hill, Abbey Villas, and Willabay. There are others, for sure, but these are the three that fit into this lower price point while still offering some meaningful value. When times were bad, these small condo associations were chock full of inventory. Too much inventory, some slight foreclosure activity, and overall malaise. Today, these complexes have recovered completely, and they offer some of the easiest value in our broad market. Let’s take a look at each one to see what’s happening.

Abbey Hill is perhaps my favorite. The complex isn’t right in town, like the Villas, but I appreciate the privacy. There’s a basic swimming pool and some nice topography here, all less than a mile from downtown Fontana. Today three units are available, priced from $199k to $255k. One of those three units is pending sale.  The condo fees at Abbey Hill are around $350 monthly, and taxes run around $3k annually. Factor in a 70% mortgage and you’re looking at a delightful vacation home for the cost of one long weekend rental at the Abbey Resort. Best of all, the units are all a bit tired, so a basic surface renovation can make a dramatic impact.

The Abbey Villas are adjacent the Abbey Resort on the harbor. That harbor is being renovated this off-season, so look forward to a beautiful new harbor (if there is such a thing) by next summer. The villas have a series of swimming pools, and are undeniably in the heart of the action. The beach, restaurants, and parks are all just a short walk from these units. Inventory swelled during the crisis, but today there are just two units available in the MLS, priced from $230-272k.  Some units here can sell into the $400s, if they are harbor front.  Taxes are similar to Abbey Hill, though assessments are a bit higher. Pets are not permitted here, so if you hate dogs and cats, you’re in luck.

In Williams Bay, Willabay fits into this particular segment. If you like being close to the water (short walk), but dislike the bustle of Fontana on a summer weekend, then Willabay might be a better fit. There’s a pool here and some tennis courts, all close to the Williams Bay lakefront and beach. There are five available units priced between $179-235k, with one unit pending sale. Taxes are similar to the Fontana units, and assessments are, on average, a bit lower than Abbey Hill. These units come with one car attached garages, as do most of the Abbey Hill units (the Villas lack garages).

If you love the Lake Geneva scene, and you’d like to be part of it, I’d gladly sell you a $5,000,000 lakefront house. I’d be happy to, really. But if that’s not in the budget, and a $200k condo near-ish the lake sounds more appealing, just let me know. You have solid options here, and I’m happy to guide you to the best value.

 

The Hunt

The Hunt

I kill animals every year. Or at least one animal every year. It’s a right of passage, a tradition, something I do, annually.  I’m a killer, I suppose.  But I’m not a cold blooded animal killer. This is a title reserved for those who enjoy the event. The killing.  But even that isn’t my fault. It’s my dog’s fault. I have two dogs. One small dog who doesn’t like children, and one large dog who likes everyone. The big dog likes people, sure, but he’s a vicious killer of every other creature. He kills for sport. He tortures for fun. He’s an awful, terrible dog, renowned in the animal kingdom as being the worst of the worst. Rabbits have come to know the sound of his footsteps in the grass.  Entire families have been destroyed by his jaws.

And this is why I end up having to kill. Each year,  perhaps just once but possibly more, this aloof dog will play with a small rabbit until the small rabbit is near death. Crawling on the grass, begging for a reprieve. Bloodied and broken. This is when I get the call from my wife, or my daughter, and I have no choice but to drive home and load a gun. From the moment this painful process starts, I’m sick over it. I don’t want to kill his rabbit. Even if it is already nearly dead, it isn’t totally dead. No, that’s something that I have to do. My daughter looks out the window, tears filling her eyes. Forced into action by something outside of my control, it’s up to me to end the suffering, and with one pull of the trigger, that’s what I’ve done.

I’ve thought about joining the bird hunters. This doesn’t seem that difficult, not does it seem that bloody. Just walk in a field and shoot at a bird. The feathers hide the damage, after all. There wouldn’t be any eye contact with my prey, just a blast from a gun and a dog retrieval. This seems like something I could do. I could buy the best field chaps, if that’s what they wear, and then walk through the tall, tan grass on a still November morning. What a great thing this could be. But then last week I saw a bird in my driveway that appeared to be sick, or injured.  My wife and daughter checked on it, and put it into a small shoe box filled with pine shavings. We kept it in the box outside in our shrubs to protect it from the skunks and weasels and coyotes that would have eaten it overnight. The next morning I checked on this bird, a female Cardinal, and it was dead. I felt awful, and quickly realized that bird hunting isn’t for me.

I’d like to start something, someday. A business. A service. A product. Something, anything. And with this I’ve thought about the world of catch and release deer hunting. Why couldn’t this work? The gun would look like a gun, but with a different tip on it so people would know it isn’t lethal. Instead of shooting a bullet it would shoot a tranquilizer dart. The dart would hit the deer, the deer would fall asleep quickly, like in the movies. And then I could pose with the deer, just like a real hunter, only that my magnificent buck would then wake up and return to the rut. I’d experience everything, just like a real hunter. The gear. The face paint. The thrill of the hunt. The squeezing of the trigger. The photo. The admiration of Facebook and Instagram. And then, the peace I’d feel knowing that my deer walked away from the incident with nothing but a small scar where my tranquilizer dart stuck. If catch and release fishing is a thing, why not catch and release hunting, too?

Alas, it isn’t meant to be. I’m too soft. I value life too much. But I don’t begrudge the hunter his season. I wish him well, I wish him safety.  For the families that find connection in hunting, I wish them peace.  But there is something of which non-hunters like me need to be aware. It’s that this is the time of year for the hunter.  Wisconsin’s rifle deer season begins this weekend, running through the Thanksgiving holiday and the following weekend. Today, a simple word of advice.  Just stay out of the woods. Don’t walk nature preserves where hunting is allowed. If you’re not sure whether or not hunting is allowed, assume it is.  Don’t wander through woods, no matter how lovely a late fall walk might be. Leave the woods to the hunters and the deer these next two weekends, and wish them both well.

Off Season

Off Season

It was January. Maybe February. The snow had piled up and the lake had frozen. It was winter, but not like last winter, it was real winter. The sort we had a couple of years ago. The sort we might have this year. The property came to market on a Tuesday. It might have been a Wednesday. I saw the listing and sent it to a customer. I didn’t send it via an automated feed that all of my “competitors” use. Those feeds are insulting to your intelligence. Or at least insulting to mine.  I sent him the property, with a note, “Buy this”.  Within a few days, he had done just that. The beautiful vacant piece of Fontana lakefront was his. Ours.  Today, a new home is being built. It will be a stunning home, designed with summer weekends in mind, perfect in the little ways. Perfect in the big ways. It’ll be done by next summer, hopefully.

The lot was listed in January. My buyer was in Naples. Or Ireland. Or California. It might have been South America, hunting grouse. The sort that live in the rocky crags. They might not even be grouse, but grouse lookalikes. It didn’t matter where he was. He knew what he wanted to buy here, and when it hit the market, it didn’t matter if it was a Saturday in July or a Tuesday in January. It didn’t matter if he “had the time” to make it up for a look. He had me, and my eyes and my advice, and he knew I knew what he’d want. In this, there is no humble brag. There is just the reality of a resort market during the months that the casual lookers perceive to be the off-season. The reality of Lake Geneva? There is no off-season.

Had this buyer not been paying attention, he would have easily let this opportunity pass him by. That’s the easy thing to do, after all, to assume that there’s always something else. There’s another best thing, coming soon. Not today, tomorrow, maybe. If not tomorrow, perhaps seven Wednesdays from now. That’ll be the day.  That lot was purchased perhaps three years ago.  From that winter day to this autumn day, there has been nothing else come to market that reflects the same sort of attribute. The ideal location. The ideal configuration. The ideal price. If that buyer had decided that, no, he didn’t want to pursue something because his attention was momentarily elsewhere, none of this would be happening. The carpenters wouldn’t be rushing to finish the roof before the snow. The buyer wouldn’t be thinking about summer at his new lake house. He’d just be temporarily distracted by the distraction of the day.

A cold November morning feels about as as distant from summer as possible. Nothing could be farther away at this point. We haven’t even started winter. We haven’t grown tired of winter. We haven’t longed for spring. We haven’t tasted spring. We haven’t put a pier in, because the piers still aren’t out. Next summer is forever away, and it’s easy to live our lives as though we have plenty of time. Summer will come, but it won’t come soon. This is the easy way to live. This is the way most live. But this isn’t the way to get things done. This isn’t the way to accomplish the goal. How do you accomplish the goal? You pay attention in December just like you would in July.  When a property lists in January and I tell you it’s something to buy, you drive up in January.  The grouse can wait. Summer’s coming.

Lake Geneva Foreclosure Update

Lake Geneva Foreclosure Update

Foreclosures. They’re interesting, and awful. Awful to be a party to a foreclosure, awful to be a neighbor of a foreclosure, awful to be the bank foreclosing.  There are no real winners in the foreclosure game, at least immediately. Long term there are many winners, in the same way that a forest fire cooks some rabbits while it chars a vacant mountainside but after the smoke clears and the damage is surveilled, new growth can begin.  The easy thing now is to forget about foreclosures. To pretend they don’t exist, to wish they hadn’t. But that’s not the smart way to go about our lives, and so we’ll take a look at the Lake Geneva foreclosure scene to determine if there’s anything afoot.

First things first, let’s check the MLS. As the local MLS scratches and claws to try to remain relevant, much like Blockbuster tried to remain relevant and MySpace, too, they’re implementing different search fields to prove they’re at the cutting edge of technology. They aren’t, but they’ve given agents an opportunity to mark listings as “REO/In Foreclosure, and Shore Sale”. That’s something, so let’s search. Walworth County, Singe Family, both distressed selected: Seven total listings. Two under contract. Nothing priced over $250k.  Year to Date there have been 72 such sales in Walworth County, all but five priced under $300k (the most expensive was a mid $400s Delavan Lake property).  Looking back to 2014, when the MLS function either didn’t exist or wasn’t readily used,  there were 170 such sales in the MLS.

There are two other methods to check for brewing foreclosures, both involving public records searches. Looking at scheduled Sheriff’s Sales, there are just 19 scheduled at the moment. None of those involve any Lake Geneva vacation home real estate, and most are in the lower price ranges of our primary home market (sub-$200k).  For a reminder, the Sheriff’s Sale is a step in the foreclosure process. An owner/borrower still has a redemption period that typically extends past the Sheriff’s Sale, but this is usually a last, fatal step in the foreclosure process.

Taking it one degree deeper, let’s look at the Lis Pendens filings over the past 30 days. Remember, a Lis Pendens filing is essentially a notice of default. The bank is telling the borrower: YO. You owe us money. We aren’t messing around. Pay up or we’re going to foreclosure.  There are a  handful of filings,  but from what I can see there’s only one recent LP filing that affects the vacation home segment. That is a filing on a home in a lake access association that lacks a boatslip, or a view. Nothing looks to be in trouble on the lakefront, excepting the property that with IRS entanglements on the North Shore.

Beyond the lake access markets, one item of surprise. Geneva National looks clean. GN, for those who didn’t know, had some significant foreclosure trouble during the last downtown, as volume dried up and foreclosures pressured valuations.  My assistant Vicki closed on a GN foreclosure this fall, but these properties have been few and far between this year. Overall inventory has dropped considerably in GN, and without any foreclosures brewing (there may be one or two that I don’t see), GN is poised to continue its very healthy recovery.

Foreclosures will be part of any market, no matter how healthy. A foreclosure here and there can be a positive for a market, as it provides a bit of liquidity when inventory is low and removes property from weaker hands. Today, the ownership base at Lake Geneva looks to be as strong as ever, and a decided absence of foreclosures appears to be the new normal.

 

 

In Praise Of November

In Praise Of November

Writing hasn’t been easy lately. It’s not that I don’t want to write, because I do. I want to write. If I write that enough I might believe it. If I believe it then I might act on it. If I act on it, well, then it’ll be true. But it’s not just the writing that has proven more difficult these days. It’s everything. It’s the typing and the talking and the sleeping. A poll would be helpful, something to find out when sleep no longer comes softly and easily. I’m at the point now, just a few months shy of forty, or a few months into 39, depending. I want to be productive. I want to keep this business moving forward at this pace. I want to do lots of things, but it’s November, and how many times can I beg you to hire me?

But the afternoon yesterday was gray and dark. It wasn’t ominous, no, ominous is something that happens in June, or April. Something that happens in July, when the clouds are low and the lightening strikes. They say November is the clash of seasons, of warm air and cold air battling over this town. But there’s no battle really. The warm air has already lost. These are just the last puffs of life, the last hints of warmth on our cool skin. It won’t be warm again for quite some time. The cold air has won. Winter will be here soon.

This is the in between. There is cold rain in April, but no song was ever written about it.  We should give thanks in June, but no one gets Thursday off in June. We harvest in May, that first sweet crop of hay, of rye and clover, but no one counts the harvest then. A year is not made in June and it is not lost then, either. But it’s November now, and it’s time for all of those things. It’s time for dark skies and faded leaves. It’s time for one last mow of the season. For me, this week will be my third last mow of the year.

There is great mourning now. Long pauses about how awful things are now, and how great they were then. Summery things are memories now, and those who found time to make some have a greater sense of what is now lost. I’d rather be boating, the bumper sticker says. It’s true in November, for most. But it’s calm out now and it’s gray and when people text me about how depressing this weather is I tend to take offense. What is so awful about it?  Is there not equal beauty in that field with the low sun peaking through on the western horizon, lighting the stalks of just harvested horse corn? Field Corn, my  Grandma May would chide.

The Tribune yesterday was filled with skiing. Snow, mountains, West. Buy skis now, before they’re all sold. Buy your Epic Pass by November 19th, the ads and my son warn. It’s urgent really, this warning. Do This or you’ll miss out.  Do This or be stuck. People are fleeing to the islands now. To warmer weather, of any sort. Desert, with purple horizons. Mountains, capped with increasing snow. Beaches, dazzling turquoise. Warmth and sand, sweat and TSA. Travel Now, the Tribune said. Make Plans Now, an admonition. If you don’t, you know what will happen. Winter is coming. Run while you still can.

But why would I run? Why wouldn’t I want to see that field, bright and yet dull, vibrant in a shade of browns and grays that no beach could ever, ever match. Why does everyone hate November? Why is the harvest not magic? The granaries overflowing with corn and beans, the tractors slowly plodding down a two  lane country road, throwing mud into the air and slowing the scant rural traffic, the scene decidedly and undoubtedly perfect. Our fields now are as beautiful as any beach. Any mountain. Any desert sky, no matter how faded purple and pink it may be.  November isn’t the in between, not at all. November isn’t a fight between winter and fall. It isn’t something to run from. It’s just a month, deserving of your admiration, requiring nothing but your presence.

465 Outing

465 Outing

When David Bowie died, it was hard to scroll through Twitter and find someone who had not, at some point, met him. In line at McDonald’s. Rushing through Heathrow. Buying shrimp to soak under the Anna Maria fishing dock.  Well wishers wrote RIP, I’ll never forget that time I saw Bowie buying eggs at the Mobile in SuchandSuch, NY. This is what happens when famous people die. In the same way, everyone has a story about a lake house.  A friend’s lake house. The weekends there in high school. An uncle’s lake house. The August fishing trips.  The grandparents’ cottage, so far up north that it was just one long weekend every summer. No matter the duration of the exposure, no matter the quality of the water or the size of the fish, a lake house weekend imprints a permanent memory.

But what of that lake house.  What does it need to be? Does it need to be 5500 square feet,  with a four car garage and a three slip pier?  Does it need to be all shine and polish, large and kept, perfect? Or does it just need to be on a lake? Is this the only real requirement of a lake house? Is this why families with lake houses on obscure awful lakes still make the pilgrimage to their terrible water every summer?  We pretend to know why we seek out and buy these homes. It’s because we want to make memories. We want our kids to love us when they’re older. We want to experience weekends in a different way. We want something else, something different, something that we know other people have. These are the motivators that begin the search, but once the search is underway, these tend to fall by the wayside in favor of appliance make and bathroom material.

There was a little house at 465 Outing Drive in Williams Bay. This house is a few doors West of George Williams College, where Music By The Lake strums each summer. The cottage wasn’t big. It wasn’t nice. It wasn’t clean. In fact, it wasn’t habitable. But it was lakefront, and that’s what caused an investor to buy it and begin a thorough and significant renovation. New this and new that. New everything, almost. New hardwood floors, new windows, siding, roof. Insulation. Trim, appliances. Kitchen, baths. Marble. Patio. Parking. Everything new. The process took several months, and when the home was completed it represented the finest of blends. A lakefront home with vintage cottage charm, outfitted with modern conveniences and luxury appointments.

The home came to market this past summer for a few dollars less than $2MM. The property was, after all, a perfect example of lakefront charm. Still, the market pushed back, and the price was forced to adjust. Today, I’ve brought this property back to market for $1.699MM. A price that fits into the entry level segment of our market without requiring anything of the new buyer. Purchase this home and change something if you wish, but there’s nothing required. Just purchase, move, and enjoy your weekends in an entirely different way.  There’s a private pier, beautiful wide water views of Fontana Bay, and an easy shore path walk to Chuck’s, Gordy’s, and the Fontana lakefront scene. You could buy a cottage on the lake and renovate it yourself. You could. Or you could just buy this place and save yourself the frustration, expense, and delays that accompany such a significant project.

Wreath Sale

Wreath Sale

I should have started a cooking blog.  My first post would have been about chocolate chip cookies. That’s SEO gold. I’d sprinkle in mentions of famous chefs’ names, and then, by now, after so many years I’d have a tremendous following. I would write a cook book. People would buy it. I’d be a guest on some cooking shows. Probably Ellen would also have me on.  Things would be better then. I’d have a publicist and an agent. Then I’d have my television show. My blog would be somewhat dormant by that time, but then every once in a while I’d write something. DAVE’S BEST CHOCOLATE CHIP COOKIES. The likes and shares would be uncountable.

But instead I write about real estate, and no one really cares. Some people care, but they cared more when they felt the market needed a steadier hand. Now it’s just a frenzy, and careful contemplation is out of style. That’s why I’m going to write about wreaths today. My wife has been bugging me to write about these wreaths for a month. I told her I would. I wasn’t sure if I actually would.  It didn’t feel appropriate to write about wintery things in the heart of fall. It would be like writing about fall in July. No one wants to hear that nonsense.  This morning it’s cold, it’s dark, and anyone who isn’t aware of the pressing nature of the winter season simply hasn’t been paying any sort of attention. Today, wreaths.

My kids are selling the wreaths. They aren’t selling them because they particularly want to sell them. They’re selling these wreaths because they go to a small private school, and as is the nature with small private schools in rural areas, there’s nothing easy about making payroll. There’s nothing easy about keeping the lights on. There’s nothing easy about any of it, and so fundraisers are not so much a means to buy neato wiz bang technologies for the school, they’re a way to keep the doors open.  I don’t often appeal to this group for fundraising efforts, but since it’s a Monday and my wife is mad at me, here’s the information. Besides, I don’t even have a terrific chocolate chip cookie recipe.

If you’d like a wreath, or a bunch of wreaths, or some garland or maybe some other bits of greenery, here are your options. You could just shoot me an email and tell me what you’d like and I’ll put in the order. I believe the wreaths arrive something around Thanksgiving, so I’ll be heading out at that time with my kids and we’ll deliver your order.  Maybe my wife is right. Maybe you’re going to buy some wreaths anyway so you might as well buy them from someone who will bring them right to your doorstep?

 

Lake Geneva Lakefront Market Update

Lake Geneva Lakefront Market Update

I read an article yesterday about slowing home sales in the Hamptons. Hamptons’ Homes See Double Digit Price Drop. Sounds terrible, unless you don’t care about the Northeast, which I don’t. In fact, I root against the Northeast as a general practice.  I read the entire article, but I didn’t really need to. The first graph told the story.

 

The softness in pricing was mainly due to an oversupply in the luxury market…The luxury inventory is still expanding, noting that there were 322 active listings during the last quarter, a 22.4% increase from a year ago. ~ Jonathan Miller, Douglas Elliman

Well then, that sort of takes the mystery out of it all, doesn’t it? Why is the market slowing? Oversupply. Why do my shorts get wet when I swim? Because of the water. News sorts like to look at localized headlines like these and paint a national segment with the same brush. Unfortunately, the real world doesn’t work that way.  But the article does bring up an interesting topic, that of supply. If supply is overwhelming the demand, we all know markets have to drop. Why will they drop? Because if there are 322 active listings in one segment, you can bet that at least 30 of those chowder eaters are going to want to sell, and they want to sell now. That puts downward pressure on the list prices, which results in lower sales prices, which results in Mansion Global running an article, which results in David Curry writing another article in the response to the article.

The month of October was again kind to the Lake Geneva upper bracket. Four lakefront homes sold last month, with many others heading under contract.  Today, there are just 17 true lakefront homes available on Geneva Lake (with private frontage). That means we have the opposite problem that afflicts the Hamptonites.  Though this will also cause our volume to shrink, even as our prices remain stable or increase.  The four sales on Geneva from this month are unique, in that three of the four had experienced elongated market time. Did the list prices soften or did the market rise to meet the seller demands? Both, sort of. Kind of.

A Congress Club cottage sold for $1.53MM. That house had been for sale for two years, on and off, and finally sold after a series of price reductions.  The property is not private frontage, rather it shares a wide swath of frontage with the other Congress Club cottages. It’s a unique set up, something that the market finds both appealing and strange.  This particular home sold for a similar number several years ago, effectively putting a cap on the prices in the Congress Club. Do people mind sharing frontage and sharing piers and having to abide by all sorts of rules? Yes. Do they mind as long as the price is mid $1s or lower? No.

Another old cottage, this one with 84′ of private frontage, sold recently. Main Street Lake Geneva is a location that the market didn’t used to find as appealing as it does today. The traffic, the noise, the scene, were mostly left off of buyer’s want lists until this most recent cycle. Now people like the action, they crave the scene, they tolerate the traffic. The house that sold was one that I had for sale a year or two ago. I failed to sell it, for similar dollars. But that wasn’t because I’m not good at selling things, it was just that the market has increased since then and the increase allowed the seller’s number to make some sense to a buyer. The home closed for $2.1MM and change.

In September, I wrote an offer for a client on a lakefront home in Cedar Point Park. The house was okay, not perfect, but okay. Our offer was followed by another offer, and when our reasonable offer was rebuffed, my buyer stepped out and the other buyer bought. $2,775,000 was the closing price for a modest home on the hill in Cedar Point. I thought this to be a high number, but that’s just like, my opinion, man.  This property sold in 2004 for $2,025,000, again in 2009 for $2,575,000, and now in 2017 for $2,775,000.

Lastly, a sale near the Lake Geneva Country Club for $2.85MM. This home had been for sale for what felt like my entire life, though I’m sure that’s not accurate. The house was nice enough, the 125′ of frontage, good enough. But the house was plagued by a location next to the LGCC maintenance building and paddle courts. The market didn’t love these conditions, but as with any lakefront sale, these are each unique and certain buyers prioritize amenities and detriments differently. I’ve sold lots of homes that the broad market didn’t love, but when you find the perfect buyer their perfect house, deals happen. In the context of price per front foot, this sale was the most affordable of the other three private lakefronts to have closed recently, so that’s worth something.

If the market is expected to slow, 3% GDP, all-time index highs, and low inventory aren’t the conditions that will lead to that slowdown. Will the possible elimination of itemized deductions hurt us, as the Crain’s Chicago Business article this week claimed? Maybe, but I don’t think so. Buyers aren’t here because they’re combing over every last dollar. They’re here because they love it, because it means something to them, because it means something to their families. They’re here because they want to be, and they keep coming even when the price of admission is on the rise.

 

Above, my new listing at 434 Oakwood in Fontana. $1.295MM for so much perfection.
The Fall Of It All

The Fall Of It All

I already know the sort of fall you like. I know the sort of fall everyone likes. It’s the fall we had last Saturday. Sunshine, 70 degrees, bright leaves and a deep blue lake.  A cloudless sky, excepting a few puffers pushed from the South and out to the East by a weekend wind. Boots and leaves, orchards and pumpkins. Walks along the shore path with dogs. Happy dogs. Happy people. Happy skies and happy days. This is nice that you’re so positive all the time, so nice that fall can behave like this, much to the delight of the fall enthusiast. Fall, it generously gives the soft people the fall they so badly desire.

But fall isn’t just like this. Fall gives to people like me, too. It’s not that I don’t love the above fall, I do. When I spent a few hours boating last Saturday with clients and friends, I wasn’t mad about this. The kids flopped around on the tube as we whipped from shore to shore, basking in the waning warm rays of 2017. I enjoyed it as much as anyone, but not more than anyone. I just enjoyed it, enough. But the time for that has past. The time for the soft fall is nearly over.  The opportunities for the casual fall enthusiast to stroll over bright, crisped leaves have just about expired. It’s still fall, mind you, still delicious, wonderful fall, but it’s about to be fall for the serious. Fall for the brooding. Fall for the hardened.

This fall comes with little warning.  Fall might blow bright on a Saturday and dull on a Sunday. When the crisp leaves no longer crunch and instead cling, gummed to the bottom of a nearly soaked boot, this is the fall that the masses dislike. It’s so wet, they’ll say. It’s so dark, my wife will say. It’s so muddy, someone else says.  It’s raw. The temperature might not break 50. If it does, it’ll settle at 51. The wind will blow. The leaves will strip. The gutters will clog. When we drive by the pumpkin patch we won’t hear laughter. No children searching for the perfect, orange gourd. We’ll just drive past without slowing and see the withering, muddied field, wondering why the farmer planted 10,000 pumpkins when he knew he’d only sell 600.  Real fall is full of second guessing.

This is the fall I love. The fall that’s dark. The fall that’s cold. The fall that might be wet and windy on Tuesday and dry and cloudy on a Wednesday. I don’t need the sun like you do. I need the comfort of a low sky. I crave the familiar of a late afternoon that already feels like evening, when the only lights visible are the window lamps, warming a room and reaffirming the distinct difference between inside and outside. In summer and in soft fall, the distinction is blurred. Windows are opened, doors left cracked open, wedged there by a fall boot that has no summer use. In the fall, the boundaries are once again established. Inside it’s warm and it’s soft and it’s comforting, the fire slowly consuming. Outside, the woodsmoke hangs just under that low sky and the deer walk quietly through the tall faded grass.

This is the fall I love. It might still be bright, some days. Peak leaves will be peaking this weekend, assuming they all haven’t been forced to the ground by the wind and the rain. It’s going to be cold this weekend. It’s cold now.  Some will run for the warmth of southern Florida. Others will wish they could escape the drear. The happy fall lovers will find this unsettling, while I’ll try to hide my enthusiasm. Because fall isn’t just for you. It’s for me, too.

 

 

Perspective Sadness

Perspective Sadness

This very well could have been the Cubs Didn’t Get Swept But They’re Still Terrible Sadness post, but that wasn’t really bothering me this morning. The Cubs were beat by a vastly superior team.  Perhaps if our big hitters had hit and our decent pitchers were decent, then maybe things would have been different. But they weren’t different. They were awful. Just awful. Embarrassingly awful. And so for now my only Cubs memory from 2017 will be one of joy. Joy that I didn’t spend any money to attend a playoff loss.

Even this, though, is about perspective. The Cubs were bad in these playoffs. Really bad. Don’t forget they were also bad last year in some of those games. Super bad. But they still won a lot of games and we still were able to watch terrible baseball well into October, and so this is something good.  Perspective as it relates to baseball fandom is not really difficult. Just remember your team was better than most of the other teams, and in that there is some consolation. We could have been Brewers fans. Perspective in real estate transactions? It’s as rare as a Lackey fastball that doesn’t end up in the basket.

When real estate deals are small, every dollar really matters. If you’re a seller of a house listed at $119k your contract is for $114k,  your mortgage payoff is $105,989 and your closing costs total $8155, then numbers really, really matter.  The car needs rear brakes and there’s a final balloon payment past due on Timmy’s braces. These are difficult times and those are difficult circumstances.  Real estate transactions are all stressful, no matter the dollar amount or the location, but are all transactions created equal? Not at all.

And this is where the perspective comes in. The earlier example is indeed a stressful situation. It’s stressful because in that life, every single dollar matters. Every dollar is one to be stressed over. If a deal with that structure requires a $4,000 inspection repair to be made in order to keep the deal together, that $4k is the difference between solvency and insolvency. Not between life and death, but in that circumstance that’s likely how it feels.

Now, find another deal. Say one on Geneva Lake. One where the sales price isn’t $115,000, but $3,500,000. The mortgage is $1,700,000 and the closing costs are $150,000. Now add in the $4,000 inspection repair or credit. Does this matter? Is this something that means anything at all? Is this something to languish over? Is this something to dwell on? The answer is painfully obvious, but in this real world of high end real estate, many people still dwell on it like it’s the last $4,000 that was earmarked for paying past due medical bills. This is a shame.

This is where perspective is lost. Abandoned, willingly, routinely. Large real estate deals require large amounts of perspective, and this perspective comes in the form of not fighting over insignificant amounts of money. But David, every dollar counts! Yes, I understand that. But do I? When I sell a house that I personally own, I’ll make repairs to that house regardless of what was, or was not, found in an inspection report. I do this because I want the new buyer to be happy. I don’t want the new buyer to wander around the house the day after the closing and curse my name for the things I covered up.

But this isn’t just about sellers. This is also about buyers. Let’s say that the seller won’t make a repair. Let’s say they refuse to give you that $175 plumbing fix. Is this going to ruin your life? Is it really going to make the house you already decided you want to own somehow inhabitable? Is it going to matter at all? Does any of this actually matter?

Today, it’s just about simple perspective. Do what’s right. Today in Lake Geneva there are lots of deals. Lots of high end deals. Lots of lakefront sales for big dollars and off-water sales for big dollars. Sellers, please listen to me. If a buyer wants to give you $1,500,000 in cash and they expect you to fix two leaky faucets and a rotted windowsill, just go along with it. Be happy. Life is good. It’s short. And that plumber’s bill isn’t going to require your last $175.

Construction Sadness

Construction Sadness

I’ve decided, in the wake of the Cubs miserable, awful, embarrassing performance this week, to make every post a sad one. Monday, Multiple Offer Sadness. Today, Construction Sadness. Friday, likely, NLCS Sweep Sadness.  For those not paying close attention, I have been building a small fishing cabin not too terribly far from Walworth County. It’s not super far, but it’s still far. It’s far enough that it breaks my own rule for vacation home proximity, which is similar to last week when I broke my own rule about not burning fires until such and such. The rain was a cold rain!  And in the case of this proximity breaker, the trout fishing was just not good enough closer to home.

My relationship with construction is complicated. Extremely complicated. On one hand, I crave it. I enjoy the creativity the process allows. I enjoy the implementation of a vision. Sometimes, it’s a vision that only I can see, and so I take great pride in delivering what no one else expected. Earlier in  my life, this took the form of remodeling projects. When visitors would stop during various stages of the disaster that is a gut remodel, they’d shake their heads. They’d tell me they don’t think it’s going to work. I paid too much. I improved too much. I was always disheartened by those words, but they fueled my desire to deliver a product that would defy their negativity. In the end, the projects all resulted in success.

The last few construction projects have been new builds, from the ground up. This process is different but still the same. It requires a vision, but mostly it requires dedication to the process. The last house I built is the house I live in now. I finished that home in 2013, and it’s been a dandy of a house for me and my family. The construction process at that house was unique, in that I built the home when the market was poor which meant plenty of tradespeople were willing to work for reasonable wages. Further, those who weren’t affordable were available, and the project started in September and finished the next May. The current project is a handful of highway hours away, in a county where no one knows me and I know no one, in a region where work is a nice suggestion but not really something toward which anyone feels a particular fondness.

Once the land was purchased (that took two full years of searching), the project began. It was a modest project. 1200 square feet, give or take. A rectangle of a house with a tall gable and some cedar shingles. Much to the horror of this Lake Geneva market, I stained the shingles black. Like the night (my wife did much of the staining).  The bathrooms were lined with marble, or are, at least in theory, in the process of being lined with marble. My tile guy hasn’t reported for duty for a few months, but I’m sure he has a terrific reason.

When ground was first torn up by the rusted dozer that cut a twisty path up the side of that hill, the goal was to have the house finished in four months.  Maybe four and a half. Maybe less.  The dozer cut that path 16 months ago. The house is not yet finished. In fact, the house is not even close to being finished. I tell my wife that it’s almost done, and then I look over the list of things remaining. Trim, paint, floors, tile, bathrooms, plumbing, kitchen cabinets, countertops, appliances. It’s really not much of a list, or so go the unconvincing lies I repeatedly tell myself. The project, once a chorus of so much enthusiasm and light, has turned into a dirge.

The process has, however, afforded me many lessons. I sympathize on a deeper level with my Illinois clients who have a hard time getting contractors to do work here. I understand customers who are embroiled in multi-month, multi-year construction projects. How can something take so long? It just can. And I understand that better now.  In spite of the deep construction based depression that has consumed me, this project has given me an opportunity to practice what I preach. Give the market what it doesn’t expect. If the market expects carpet give it hardwood. Make it wide plank. If the market expects vinyl, give it cedar. If ceramic bathrooms with one piece plastic showers are good, then line the bathroom in marble. If Home Depot light fixtures light the neighboring comps, send all of your money to Restoration Hardware and use their lights instead. Markets give clues as to what construction standard is acceptable. If the market is nuanced and there’s an opportunity to create value by creating a superior product, then create it.

Multiple Offer Sadness

Multiple Offer Sadness

When I dream, I dream of the good old days. Of the days before these days. The days when things were worse.   I dream of anxious sellers and opportunistic buyers. Of numbers. Of $3.95MM asking prices that yielded $3.25MM sales prices. I dream of the days when agents were leaving the business instead of charging into it. I dream of aged inventory, of sellers begging. I dream of buyers who’d buy something as long as they were buying it cheap. What was that something? It didn’t matter. I dream of these days, of the days that everyone else thought were bad. There’s just something quaint about a poor market.  I’ll forever cherish the memory of those darker days.

But today there’s nothing dark at all. There’s only light. Bright, screaming lights. The market is hot, which you already know because I’ve told you too many times. There are plenty of dangers in this hot market, and unfortunately, those dangers are dismissed by buyers who either don’t know better, or by buyers working with agents who don’t know better. I can’t be certain which is the chicken and which is the egg. In this new era of hurried activity, the multiple offer situation has returned. Buyers bemoan this development. Sellers delight in it. Agents? Well, we hate it.

Over the past few months, I’ve been part of more multiple offer situations than I had been involved in over the previous several years. What’s a multiple offer situation? It’s just like it sounds. The house is listed. An offer is written. The seller starts negotiating that offer.   The agent, doing the agent’s job, tells some other agents that there’s an offer in on the property. Another agent writes an offer. Now there are two offers. The seller is thrilled, as his negotiating capital just increases dramatically. The buyers are anxious. Angry. Hurt. Hate-filled.  The agent is playing them, they think. The agent is taking advantage of the situation, they think. The agent is doing this to ruin their lives, they think.

Newsflash. Agents like selling houses. That’s because we chose this profession, if it can be called that, to make money. I sell real estate because I’m good at it, and because I’m good at it I make money to pay for such extravagances as a mortgage, and taxes. Also, groceries. Agents do this job because we make money at it. To assume we do it because we like “people” is to assume a hedge fund manager loves his job because he likes to create liquidity. We all do jobs to get paid. In the case of a multiple offer negotiation, agents will hopefully still get paid, but there’s a significant amount of work that accompanies this situation. Pop Quiz: If Jimmy the agent makes $100 for working one hour, or $100 for working two hours, which would Jimmy prefer?

Multiple offers are once again common in this market. There can be only one buyer for any given house. This means one buyer will be happy and another buyer will be sad. Did the agent contrive this situation to make someone angry and sad? Don’t be ridiculous. The agent, no matter how convenient it is to assume, is not the bad guy. Sure, there are awful agents. Terrible, horrible agents. But I’m writing this from my position, as an agent that isn’t either of those things.

The other condition that is increasingly prevalent is the secondary offer. This differs from the multiple offer situation, in that the secondary offer is only written after a primary offer is accepted. This is akin to walking into a furniture store and stumbling upon the most beautiful couch. This is the couch you’ve spent your whole life waiting for. Nothing else matters, except this couch.  You ask the sales lady for the price.  It’s within your budget! And for such a couch as this! But the sales lady notices the tag hanging next to the price. SOLD, the tag says. She tells you that sometimes these couch deals fall apart, and that if the buyer for whom the SOLD tag was written doesn’t make good on the purchase, then you, YES YOU, can buy that couch. You agree to these terms, and you wait by the phone.  Sleep is for those who have never laid eyes upon this couch.

A week goes by. You’ve heard nothing. You call the store. The sales lady is at lunch. You call later, and she says the couch is still in the store, and the primary buyer is supposed to come in tomorrow to pick the couch up. Not liking this answer, you lash out. You tell the sales lady how awful she is. How she must be lying to you. How this isn’t the way things work.  Ah, but this is the way things work. This is the way real estate works. The primary buyer is the primary buyer until he isn’t. If you’re a secondary buyer, please relax. The agent is not doing this to ruin your day. The agent, in fact, hates this almost as much as you do. Why? Because this creates extra work for the agent, and as our prior example states,  agents dislike extra work for the same pay.  Just like hedge fund managers and furniture store salespeople.

 

Above, my Basswood estate listing, offered at $9,750,000
Lake Geneva Liquidity

Lake Geneva Liquidity

Increasingly, I’m a fan of all things Wisconsin. This has been difficult on one of my sporting allegiances. I’ve been a Bears fan since birth, but how can I actively root against the team that means so much to the economy of the state I call home? In this, I find myself pulling for a team I used to aggressively hate, for the benefit of my state.  This state has been winning lately, in case you haven’t noticed. Our budget crisis was circumvented by a willingness to tackle the problem head on. Our job numbers continue to increase as our Governor lobbies for, and on behalf of the working people of Wisconsin. Business is growing, the state is thriving and the leaves are turning. In Wisconsin, life is pretty, pretty, pretty, good.

While I root for Wisconsin at all times, unless the Brewers are playing, I find it obvious that the real estate market in this great state is not at all uniform. There are hot markets here, to be sure. Milwaukee’s Third Ward is growing. The collar communities of Brookfield, New Berlin, Elm Grove, etc, are bustling.  Things are good here, but things being good in the state have very little to do with things being good in the lofty segments of the Wisconsin vacation home market. The upper bracket real estate market in Lake Geneva is on fire, so I decided this morning to do a quick check of how that particular segment is faring in the rest of our wonderful state.

I only have access to the MetroMLS, which is not necessarily the MLS that the entire state uses, so my statistics here are more representative than they are bulletproof.  Today in the MLS, excluding Walworth County, there are 27 homes for sale in Wisconsin priced in excess of $3,000,000.  The only home in that segment under contract is on Crooked Lake, listed just over $3MM. To be fair, that is a very nice looking house that someone is buying. Good for them, and good for Crooked Lake, wherever it may be. Over the past 12 months, there are two MLS sales over $3MM in the entirety of the state, again excluding Walworth County. Of those two, one was an off-market direct sale that was entered into the MLS after the fact. If we’re going to be super basic here, 26 available homes and two sales over the past year means we have 13 years worth of upper bracket inventory in the state.

Now consider Walworth County, home to the reigning king of luxury real estate, Geneva Lake.  On Geneva Lake, we currently have 15 available lakefront homes priced over $3MM. Of those, nine are under contract this morning. Looking back over the past 12 months, we’ve closed nine lakefront sales over $3MM. That means while the rest of the state has 13 years worth of upper bracket inventory on the books, Geneva has just 12 months worth. Geneva Lake, take a bow.

Other markets in Wisconsin (and Michigan, for that matter), will gladly sell you a house in excess of $3MM.  That’s really not that difficult. The trick is, can you ever sell that house you just bought? Geneva will sell you that upper bracket house, and then when you’re ready to upgrade or simplify, Geneva will sell it for you again. It’s called liquidity, and while our water clarity and our lakeside scene is what we like to think sets us apart, it’s actually upper bracket liquidity that is our best, and most unique attribute. We like to seek out liquidity in most of our investments. Shouldn’t our vacation home investments demand the same?

Above, my lakefront sale from last fall. $9,950,000, closed.
Fall Rules

Fall Rules

I have several different sets of rules pertaining to several different disciplines. My real estate rules are well known. Don’t buy a house on any lake that doesn’t start with a G and end with an EVENA. This is the main rule. Other rules involve other things. I’ve been lifting weights for a year or so now. You can’t tell. I’m getting mostly fatter but marginally stronger, so if I ever need to lift a car off of a small child there is now a good chance that the car will at least wiggle when I apply force. My workout rule is simple. Show up late on leg day. Show up early on chest day. Simple, rules.

We have six chickens at our house now. My wife collects an egg or two each day, small oddly shaped eggs of different colors. They’re nice, enough. But the chickens wander all over my yard and scratch through my mulch beds, and use my bluestone patio and sidewalk as their commode. This is unacceptable to me. My wife visits the chickens and returns to the house with chicken crap on her shoes. This is unacceptable to me. At my house, my rules of no chicken crap in the house are viewed as being unnecessarily onerous, for reasons I cannot understand. Still, rules.

I have other rules for other things, but now it’s fall and there are fall rules that are very, very important. I have three fireplaces in my house. They’re nice. I love burning wood, and view an affinity for gas fireplaces as a character flaw. When a real estate description says “gas fireplace”, I generally feel sad and empty inside. Fires are meant to consume, and if I can’t feed the fire wood, what good is the fire? In the fall, the temptation to burn wood comes early. The first crisp night. The first rainy Saturday afternoon. The problem with all of this is the rules are the rules.

No fires until the nighttime temperature is consistently in the 40s. No fire if the daytime high exceeds 62 degrees. In tandem, these two rules work beautifully. A cold night does not allow for a fire if the preceding day was warm. And vice versa. These rules keep the burning of wood as an important and restricted ritual. If I had a fire whenever I felt like it, just because, then the importance of the fall and winter fire would be diminished. Do you eat cake every night? Of course not. That’s why it’s nice to have on birthdays. Fires should be revered in a similar manner. This is the first fall rule.

Apple orchards are wonderful. They really are. Apples are delicious. Anyone who disputes this is an apple bigot and should be silenced. Freedom of speech does not include the right to diss the Wisconsin apple. If you live in Texas, I’ll grant permission. But Wisconsin apples are the best apples, and northern Illinois apples are nearly equal. The Lake Geneva area has several orchards, but there’s really only one that matters. Just south of Walworth a ways you’ll find Royal Oak Farm Orchard.  The name is clunky, but the apples are not. It’s fall, and it’s orchard time.

Or is it? I cannot visit the orchard on nice, warm days. Warm days at the orchard are terrible. Bees, apples, and sweat do not mix well. That’s why I abstain from orcharding until such a day that the temperature is not more than 60. An ideal orchard day is in the mid 50s, with some light breeze. And U-Pick must be open on most of the apples. If you go to the orchard on a 70 degree fall day and the only U-Pick is Jonagold, what are you doing? And are your parents aware of how much shame they should feel?

Fall at the lake is perhaps the best time to be here, at least second only to summer.  But if you’re going to be here, please follow these rules. They’ll make your experience that much better, and your life that much fuller.

Lake aerial, courtesy Matt Mason Photography.
Lake Geneva Market Update

Lake Geneva Market Update

When times were particularly bad and getting worse, I hatched a particular theory.  The theory supposed that in spite of the various factors that we know prod consumers to buy and sell homes, things like interest rates and employment and marriage, there’s really only one thing that makes real estate markets move. In bad times, it’s fear. If you have $10MM in the bank and your $2MM home is only worth $1.7MM, do you need to sell it? Of course not. Then why sell it for $1.6MM? The answer, which we can only know now, is that you sell at $1.6MM because you’re afraid next month it’ll be $1.5MM. That’s why this market moved like it did from 2009 through 2012, because of fear.

And if it’s fear that drives a declining market to lower lows, then it must be the opposite that drives an escalating market to higher highs. Job growth is great, but it doesn’t fuel the top end at Lake Geneva. Interest rates are important, but are they? Stock market return are incredibly important to this vacation home market, and with steady returns piling up it makes sense that consumer confidence is as robust as it is. The opposite of fear is confidence, and it’s that confidence that’s driving the Lake Geneva market. And it’s driving super fast.

Another week, more contracts. More offers. More sellers wondering if their house is next, more buyers buying homes they didn’t know they needed but now can’t live without. There are 30 lakefront homes available this morning, per the MLS. Of those 30, nine are under contract. That makes just 21 available lakefronts.  Of those 21, several have active offers being negotiated. 20 true lakefront homes have already sold in 2017, leaving us to assume that we’ll break the 30 home mark for 2017.  Last year was a banner year, and we only closed 24 true lakefronts (MLS). If we break 30 this year, it’ll be even more important to remember that in 2007 we only sold 17 lakefronts. This new norm is really, really something.

This week, a lakefront closing. That of Kerry Wood’s house in Fontana. At $4.7MM it’s an okay sale. I don’t love it, and I don’t hate it. I’m ambivalent, which is how I feel about baked cod and maple syrup.  It’s a lofty sale for the frontage (102′), and the location (mostly homes valued under $2MM in the immediate neighborhood). It’s proof, once again, that our market loves new(er) homes, and will do just about anything to own them.

More contracts this week as well. A new contract on my listing in the Elgin Club. A new contract on a large Fontana lakefront listed in the $6s. A new contract on the non-lakefront modern home ($1.85MM) that sits on the cliff overlooking Fontana Bay.  A new contract on the house next to the Lake Geneva Country Club ($3.095MM), and a new contract on the Main Street, Lake Geneva lakefront ($2.495MM) that sits near the Library Park.  Hillcroft, that big estate with an older house that anchors 415′ of Snake Road lakefrontage is still pending ($12.5MM), as is the spec home in Williams Bay ($3.85MM) and the Circle Parkway lakefront ($2.95MM).  My South Shore Club lakefront also remains under contract ($4.595MM). Rounding out this flurry of activity is the small home on Marianne Terrace in Lake Geneva that’s under contract ($1.799MM).  The market is searingly hot. Breathlessly hot.

Do you think every deal is a good deal? Absolutely not.  Some of the deals I see are pretty awful. Embarrassing, really. But that ties in with Monday’s bit, so you already know how terrible this is. Still, the market is moving and there’s plenty of room left in 2017 for it to move further. Are prices increasing? Well, yes, they are. The wood sale just printed at $47,000 per front foot. That’s not the average, but a few of those in a year will skew our 2017 average to the very high end.  Continue to expect sales as we finish the year, and continue to expect many of these sales to be carried out by buyers who really should have done some more homework before they docusigned on the dotted line.

Above, my dynamite Loramoor listing.

 

Lake Geneva Agent Representation

Lake Geneva Agent Representation

We know lots of things. We know that if we don’t cut our grass once a week it will grow too tall and too thick, and when we cut it after the week off we know that the cutting will be difficult. It would have been easier to mow it last week. Once in a while, it’s good to let it go and struggle through the off-week cutting, to remind oneself not to skip the lawn. In the same way, we know we should floss our teeth. It’s a good habit, this flossing. I floss, sure, but when sitting in the dentist chair I have to both admit it’s not twice a day and then endure the chastising reminder. Flossing, it’s good.

In the same way, there are certain real estate things that everyone needs to remember. This is your Monday reminder. In an attempt to make this exceptionally easy reading today, I’ll distill the reminders down to just one.  What I’m asking you, no, what I’m begging you to remember, is so simple. It’s nothing complicated. It’s not painful like mowing too-tall of grass, or annoying, like flossing stupid back teeth. It’s so easy, anyone can do it. Best of all, this thing you must do doesn’t cost you any money. In fact, it will likely save you money, and also save you from the heaps of shame that accompanies the forgetting of this thing.

In part, I blame the internet for the way it has made all real estate, and all markets, feel the same. When zooming over a map of a county on Zillow, all the consumer sees is a “market”. A house here for $4MM, a house over there for $400k. A house down the road for $1.1MM and one over here for $200k. The market, when viewed through the lens of a smartphone, looks small and quaint. In the same way, an agent in Middleton is the same as an agent in Madison, is the same as an agent in Milwaukee. It’s all one state, and it’s a midwestern state at that, which means it must be simple and it must be easy.  For the Zillow tells us so.

I’ll tell you a secret about Lake Geneva. When an agent has a listing that he or she knows is overpriced and/or a very difficult sale, guess what we hope happens? Of course we hope the listing sells. That’s our job, to work and to hope. But we really hope a buyer shows up who is tethered to an agent who isn’t from our market. Make it an agent from out of state and our eyes light up at the naivety of it all. A buyer working with an inexperienced agent, or one who isn’t from our market, is a buyer that will likely make mistakes. If we’re the listing side of a grossly overpriced property, we hope you make the mistake soon.

This is the problem, and this is the reminder. Stop working with agents that don’t know the market. It seems so obvious, so elementary. Yet the market is full of buyers working with agents who aren’t active in the particular segment they’re attempting to sell.  There’s a reason I don’t go to Door County and sell real estate on Thursdays. There’s a reason I don’t go to  Bayfield on Wednesdays and Elm Grove on Fridays. I’m pretty good at this real estate game, and I know my limitations. If I don’t know a market I’m not going to represent myself as an expert in that market. It’s just that easy.

If you’re a lakefront buyer seeking a Geneva Lake property, is it in your best interest to walk into a real estate office on a Saturday and sign up with the agent standing in front of you? Would you visit the walk-in clinic to have your kidney transplant performed? Real estate is not as complicated as surgery, but the analogy of a surgery taking place is indeed accurate in that real estate surgery involves removing too much money directly from your pocket. If you’re looking for a $3MM home in  Hinsdale, work with an agent who routinely sells $3MM homes in Hinsdale. If you’re looking for a $200k condo in Lake Geneva, work with an agent who routinely sells $200k condos in Lake Geneva. And if you’re looking for a $3MM lakefront home on Geneva, work with the agent who routinely sells $3MM homes on Geneva. And if you have a dentist appointment tomorrow, start flossing right now.

 

 

 

Oak Shores

Oak Shores

When thinking of lake access associations, it’s best to think first in terms of the obvious. Once the obvious is understood, then it’s time to progress to the nuance. With this process in mind, it’s in the nuance where the good and bad decisions should be made. The obvious, in the case of the Geneva lake access market, pertains to location. A good house a million miles away from the lake is not as good as a bad house right next to the lake. This is generally the understanding. But even this understanding has some departures, as a large lot far from the water can indeed be superior to a tiny lot near the water. Still, closer is generally accepted as being better.

In the same way, smaller associations are generally better than large ones. This aligns under the obvious. The reasoning here is that pier systems tend to be similar in size, and so sharing a pier with 25 neighbors is better than sharing it with 125 neighbors. You might love neighbors, but I usually don’t. And so smaller associations are better, and closer homes within those smaller associations are better. These things are simple to understand, even for people who prefer to vacation in Michigan.

Along the nuanced lines, there are things that many buyers fail to take into consideration. Proximity to the lake is wonderful, and meaningful, but in this is a steep walk downhill something that we’d like between our lake house and the water? If you prefer the steep walk downhill, I won’t necessarily disagree with you. But it’s the walk back uphill that I consider an offense.  If closer is better and smaller is better then surely level is equally as important.

And if we’re looking for close and level and small, then shouldn’t we focus our attention on associations that match up with these preferences? Sadly, there are few associations that meet these criteria that are affordable. That’s because these are the more desirable attributes, and desirability leads to pricing power, and pricing power leads to $9handles on lake access homes. That’s not attainable for many, which leads us to the doorstep of my newest listing. Oak Shores. $624,900.

This listing combines these rare lake access attributes, and does so in an easy to understand, easy to manage, easy to improve package. The house is three bedrooms and three baths. It’s around 1940 square feet. It has a two car garage. It’s been well maintained. Best of all, it’s 714 feet from the house to the lake. Those 714 feet are level, making the walk more a stroll, the stroll more a saunter. At the lake, there’s a fully transferable boatslip with plenty of water depth for ease of boat maneuvering. If you squint through some trees, there’s even a lake view. The association is small, the ground level, the only thing between you and the water is a small association road that feels more like a private driveway.

This is an easy house. It’s easy to buy and easy to own and easy to have fun with. The current seller has enjoyed it for decades, and it’s now time to pass the torch to another family who wishes to enjoy this lake in an entirely different way. If you’re a buyer and you understand that countertops can be changed but location is forever, then let’s chat.

Ban

Ban

It’s late and I’m here and I should be wondering why. But I’m not wondering at all. I know why. It’s because I was meant to be here.  Something prompted me to stop here. Something beyond my control. Something urged me to stop at this office so late into the night, when there was nothing really that I needed to do. I checked Twitter. I checked the Cubs score. I checked Facebook to see if I missed any cat memes. I checked the MLS. I made the mistake of checking an investment account. I did the things I thought I should do. And then I saw something that I had recently thought I had long ago forgotten.

The picture was innocent enough. A pier. That’s all it really was. A pier on the lake. The pier was white, as it should be. The water was clear, as it should be. The pier and the water were unavoidably Geneva. I know this when I see it, without context or tip. I know it because I’ve spent all of my years here, never wandering away for any reason good or bad. Never chasing something I wrongly thought was better. The pier was fine. But on the right side of the image, tethered to the pier, protruding down into the water and deeper still into my consciousness: A metal ladder.

It’s been some time since I’ve been so offended. Stand or kneel, it’s up to you. But the only time I’ll kneel is on a white wooden pier with a drill in my hand as I unscrew the unholy connection between wood pier and steel ladder. It might be aluminum, that wouldn’t matter. If it’s staunchly upright and it’s metal colored and I know it isn’t made of wood, then it’s not something that I can abide. It’s not something any of us should abide. And I’ll be damned if I’m going to stand here and watch metal piers take over my beloved lake. What’s next, synthetic lawns?

There are very few rules here. Hardly any, really. Don’t send money to fire departments so they can buy cartoonish fireboats with it. That’s one rule. Don’t buy a pontoon boat. Yes I know it’s so comfortable and I know you can sit on it like it’s your living room, but just don’t. That’s another rule. Paint your pier white, even if you’re a Wrigley.  Don’t let your children wear floaties if they’re over 10 years of age. But these rules pale when stacked against the one unbreakable rule. Metal ladders are for metal piers. Metal piers are for other lakes. Wood ladders are for wood piers. Our piers are made of wood. Douglas Fir, to be exact. Respect the pier. Respect your feet. Respect my eyes. Ban the metal ladder.

Fall At The Lake

Fall At The Lake

Of the things we know to expect during an autumn here, 95 degree sunshine is not among them. The heat is rare, but in a summer devoid of any lasting heat, I don’t know how we could do anything but welcome this heat with open, sweaty arms. It’ll be cold soon, consistently cold, where the days that hit 60 will be the summery ones. We’ll delight in those days, saying they’re too warm to wear a sweater, and we’ll sweat just a bit and we’ll be happy. For now, the green is fading but the summer remains, which leaves us little choice but to hold onto it like grim death.

This is something we don’t expect, but there are now market things we should expect. If we don’t expect them, that’s because we’re working with the wrong Realtor, which isn’t so much my fault as it is yours. The things you should expect are both obvious and yet, many of them are contradictory. That’s Lake Geneva in a single sentence. It makes perfect sense as long as you understand that sometimes up is down and often down is up and expensive properties sell so long as they have a Wolf range or so long as you’re the buyer who just latched onto a Realtor that you met because that Realtor was working floor time at the office on a weekend.

Sellers. It’s September, and sellers who haven’t yet sold are a bit concerned. Some are, some aren’t, but the general theme amongst aged inventory is some cautious concern.  There are two things that must now happen. First, asking prices should soften. This is not going to be the case for all sellers, but for some, prices will adjust as sellers look toward the off season. Second, what off season? Our market will remain vibrant up through Thanksgiving and beyond, with just a seasonal adjustment being made for Holiday weeks when only the faithful few will be actively buying and selling. The key for sellers is to understand the market remains hot, and will remain so, no matter if our 90s fade to 50s. Lake Geneva is still king, and kings do not relinquish their crowns when the temperatures drop, they just wrap themselves in some fine custom garments.

Buyers.  There are lots of you out there, and lots of you are making terrible, terrible mistakes. I try to warn you, but some of you insist on waltzing into real estate offices and make the assumption that the warm body in front of you is going to be your best chance at securing lakefront, or lake access value. This is sadly not the case, but you keep doing it anyway. There’s a funny game we can play. It’s called look at properties that no one thought would sell for the prices they sold for, and often you can find the selling agent to be an agent that doesn’t routinely work the lakefront market. To be certain, all agents are not created equal, though agents love to attempt to punch above their weight in the lakefront market because the prize money is alluring. Agents who sell $205k ranches in Elkhorn are not the agents who routinely sell $3MM houses on Geneva Lake. I’m begging you to understand this.

But for buyers there are still deals to be had. There is aged inventory that has been fielding and rebuffing offers all year, and those properties might be open to negotiations.  My recent experience is that sellers are still far too confident. Solid offers are being declined, because there is too much optimism. Sellers don’t seem to understand that 9/10s of a bird in the hand is so much better than 10/10s of a bird in the bush. This is what the game has come down to- fractions of lofty valuations- and sellers are proving their lack of real estate prowess by routinely ignoring solid, market bids.

If we’re buyers, does this mean we give up and look to another lake that might more feature more motivated sellers? Just because it’s September does this mean we wear boots and jeans when it’s 95 and sunny?

Above, my Elgin Club lakefront, now $1.925MM. It is, in my infallible, expert opinion, the best lakefront on the market priced under $2.5MM.
Jerseyhurst Sells

Jerseyhurst Sells

There are nice locations on this lake. We know most of the nice ones. If we get to drive down Snake Road while en route to our lake house, this is a wonderful thing. If we turn off of South Lakeshore Drive onto Basswood, this also makes us happy. If we drive down Linn Pier and get to turn left onto Lackey Lane, we know we should celebrate that we were able to turn left instead of just right. There are roads that deserve our praise, and each person who has ever driven these curving lakeside roads knows it. 

But the roads we know are not the only roads. There is one road that most people don’t know. Tell them to find Jerseyhurst without the assistance of GPS. Tell your older friends to find it without a the help of a Rand McNally. It’s a road we know about, because we once heard someone at a nearby dinner table mention it. Or we know about it because a friend once went on a garden walk down that lane, though most invitees became lost along the way.

Once you do find Jerseyhurst, just to the West of the Elgin Club, it requires no creativity to understand why it’s so special. There are several homes here, but not so many really. Just a handful, each unique and each manicured and each representing the best that Lake Geneva has to offer. This is a unique lane, short and curved and limited, but why it’s special is apparent to anyone and everyone who has ever wandered down it.

This is why my Jerseyhurst listing sold, and sold so quickly. I was pleased to represent the seller and work directly with the buyer in this transaction, and the print price last Friday of $2,795,000 represents a fair ransom to find ownership on this most lovely lane. To the new owners, a big congratulations for becoming the new stewards of this wonderful lake house. To the sellers who spent many fine years here, a most sincere thanks for allowing me to handle this sale, and best wishes for whatever comes next.

As a self-indulgent aside, this sale has pushed my 2017 sales volume to $34MM and change, which leaves me alone at top of the Walworth County leaderboard. So that’s neat.

Bay Colony For Sale

Bay Colony For Sale

There’s a thing about lakefront condominiums. The typical way to remodel these condos is, well, typical. Some new countertops. Paint. A backsplash of something from Home Depot. And this way of doing things is just fine. When people come to see the newly remodeled condo they’ll tell you it looks nice. Good job, they’ll say. But they won’t really mean it. They’ll wonder why you put new counters on old cabinets and painted the old doors. They’re still hollow, after all. White paint doesn’t change that. But they’ll tell you it’s nice and they’ll leave wondering if the lie was convincing.

At my newest lakefront listing in Bay Colony, there’s nothing to look at that isn’t new. There’s nothing that was missed. What started out as an intended surface renovation ended up including new everything. Everything? Everything. And instead of the typical wares you’re used to seeing in this segment, the owner decided to do the unit right. The floors are oak. The counters are quartz. The bathrooms are marble. There are custom built ins galore. There’s a new laundry room. There’s style here that is not just rare on this lake- before now it didn’t even exist.

Two bedrooms and two baths with a slip. Immediate outdoor access from both the parking side and the lakefront, making for no annoying hallway conversations. Is this unit simple? Yes. It’s simple. But in the simplicity is the value. I’m offering this unit today at $899k, fully renovated by Lowell Construction. Fully furnished. Fully ready to transform your weekends. If you’ve been in the market for a turn key lakefront residence but have been let down by your condominium options, come visit me at Bay Colony unit 101.  It’s stunning, and that’s not the slightest exaggeration.

Geneva Pier Legislation

Geneva Pier Legislation

The Wisconsin Department of Natural Resources does many good things. They also do many stupid things.  They do a decent job managing fisheries, though even in this there is both good and bad. They help protect shorelines from erosion, which is uniformly viewed as a good thing. They also manage piers, and on Geneva Lake, piers are everything.  Take a nice house off the lake that doesn’t have a private pier. Then add a private pier to that house and you’ll see a value increase of perhaps $250k. Piers are life.  With the DNR watching Geneva as closely as any body of water in the state, it only makes sense that our piers are often in their crosshairs.

At issue over recent years has been the existence of pier canopy curtains, the canvas extensions that button down the side of a boat slip to better protect the slip from the sun, wind and rain. These curtains have existed for eons, and have only very recently caught the eye of a watchful DNR, who have in turn labeled these curtains to be detrimental to aquatic habitat. The theory on their side suggests that curtains limit the light that can make it through to the interior of the slip, therefore limiting plant growth, thereby limiting fish habitat. Nice theory DNR, but it’s pretty absurd.

If you’ve ever lived on this lake, or observed the fishing habits of those who ply these waters for our mighty gamefish, you’ll see why this theory doesn’t hold up to real life. Fisherman on Geneva tend to fish in one of three ways. First there are the down riggers. Those who troll the depths hoping for something large and toothy to bite their lure. Then there are the drop-off fishermen, those who find the weed edges in 15-25′ of water and fish those margins for large bass and pike and walleye. Then there is the most populated group of fishermen- those who throw plastic baits into and around the piers. Why do they pitch and cast their lures into and under the piers? Because fish love cover and piers passively offer plenty of it.

If you’d like to view this in person, I could meet you at a particular pier on the south shore of Geneva. The pier is large and the water deep, and the fish under this pier are amongst the largest you’ll see in shallow water. The fish love this pier.  Coincidentally, this pier also has three slips protected by canvas side curtains. The fish don’t seem to know that side curtains are detrimental to their health.  The DNR also doesn’t seem to know that shade cools water and cool water is beneficial for fish.

Current legislation features an exemption from the side curtain ban for those side curtains that are covering wooden boats. This might be viewed as a win for some, but it’s discriminatory to those who own fiberglass boats.  Who is the DNR to suggest that only wood boat owners have the right to protect their personal property? This would be akin to allowing only those homes with hardwood floors to install drapes. Carpet lovers be damned.  I understand that the legislation is attempting to make the best of a sticky situation, but why is it sticky? Why should the DNR have so much power over private property owners?  What’s next, citations for too many umbrellas on a pier?

Today it would be a good idea to email Representative Tyler August (R), and tell him to adjust the language in his bill to allow fiberglass boats as well. Maybe tax the curtains at $10 per year, then the DNR can remain loyal to their actual goal: fee collection.  But don’t discriminate against fiberglass boat owners just because it seems an easier way to pacify a department that continues to persecute riparian owners.

 

Tyler August

Email: Rep.August@legis.wisconsin.gov          Phone: (608) 266 – 1190         Address: P.O. Box 8952 Madison, WI 53708

Bored

Bored

The West is burning. It’s been burning for quite some time. From Los Angeles to British Columbia, it’s all ablaze.  Their smoke bothered our Labor Day Weekend skies, casting a silver shade over our otherwise perfect sun. The forests are burning and the grasslands, too. Animals are hiding in swimming pools. The smoke chokes. The residents lie fitfully in their smoky beds, gasping through the thick air. I’ve been told for ages that mountain air is crisp and delightful, clean and pure. This is the other sort of mountain air, and it’s no good, not for the animals, not for the fish, and not for the residents.

The South is flooding. Palm trees swaying, ripped from their shallow, sandy home. Street signs twist in the wind. Garbage from one house blows to another, from one county to the next, up the coast and around and around. The storm was coming for a while, so slow it seemed as though it might never arrive. But it did, and the storm surged and the houses flooded and the people blamed the government.  Weathermen braced against the wind in displays of strength and hubris, delightfully unaware of the mockery their spectacle encourages.

In Texas, the stench of drying flood waters fills the air. It’s hot. And wet. Too hot and too wet, and the air is still and it smells and there’s no where to go. Wait, they must. The waters have receded, or they are receded, how could I know for sure? The flood waters are terrible and the wildfires are burning and the smoke follows its stream to the other parts of this country and the one above. An earthquake shook Mexico, shook it something terrible.  But the news has no time for the earthquake and the fires and the other hurricane. There is a storm in Florida and it’s blowing and it’s flooding and some would say it looks like the worst thing they’ve ever seen. Others say it’s nothing but a summer storm. Either way, it’s all terrible and it’s all bad.

And here I am. I’m looking out my window like I do every morning. The sky is blue. Powder blue to be precise. The trees are fading but they’re still very green. The grasses in my office garden look beautiful, even the coneflowers with their dark, dried seeds and leaves look delightful. It’s crisp this morning, like it has been for the past dozen or more.  There’s no reason to think today will be unlike those other days, with mostly sun and some thin, wispy clouds. Are those clouds or just the remnants of the western fire? No one knows. We don’t really care. It’s just another Monday and the temperature is perfect and the grass is green and later the lake will fill with some September activity. Not too much, just enough. That’s the thing about the Midwest.  The coasts call it boring. The mountains call it flat. New York doesn’t know where it is. But on this morning, with so much to worry about in the world and so much remembering to be done, there’s a place where life happily marches along. It’s called the Midwest.

Market Test

Market Test

By now, we all know the last two decades of market conditions at Lake Geneva. We understand the cycle. The market rose steadily from 1997 through 2008. Then the market fell from early 2009 through mid 2012. Today, we know we’re in year four or five of the latest bull market run. How long this run lasts is something we cannot yet know. I’ll let you know when it’s over. For now, we know the history and we understand it, but the biggest test for the market is beginning now.  Not now in terms of September 2017, not now in terms of Autumn.

Every market runs in these cycles. Some cycles are longer. Some are shorter. Some are less aggressive on the way up and less considerate on the way down. What lies ahead is the interesting bit.  I can guesstimate the percentages of appreciation and decline, with relative accuracy. I can tell you that at the bottom of our market cycle in 2011/2012, lakefront prices were off around 30% from their prior peak highs (2007/2008). I can tell you that since the market bottom we’ve regained perhaps 20% of those losses. In some cases, properties today are worth more than their 2008 market highs.  Try telling that to a lakefront home languishing on market in the Highlands for a price that’s not dissimilar from what it would have fetched in 2012. This is the anomaly of Lake Geneva. The market does not rise and fall with uniformity.

But that’s not the test. That’s just the set up. The real test is in the actual prices paid for properties that sold perhaps at the prior market peak, then again at the market bottom, and now again in 2017.  Today Lake Geneva is testing itself. It’s self inflicted, like volunteering to take a difficult exam even though the teacher is on vacation and the other students are still catching up on their week old homework.  The test is to prove, not with my theoretical statistics, or with some silly Price Per Foot averaging game, just how far the market has come since 2012. The only way to really know is the look to the lakefront houses that sold in 2012 and see what they’re selling for in 2017.

We know there have been some resales that roughly align with this timing already. I’ve sold a few homes in the last few years that sold during the market bottom once and then again as the market improved. Many of these have sold under unique circumstances. I sold a home on Folly Lane several years ago at the market bottom that has since resold. But the property resold at a higher price to a  neighbor because the neighbor had to have it. In the same way, the lakefront sale from last fall on the south shore of Fontana. The house that Matthew McConaughey was rumored to have bought (he didn’t). That home sold for a fat premium just one year after it originally sold. Was that a sign of the market appreciation? No, it was just an interested party pursuing a specific property. That sale looks nice in the MLS, but it isn’t a sign of broad market interest, nor does the PPF mean anything.

In order to really look at the gains since 2012, we need sales that have occurred at an arm’s length, under normal marketing conditions. We need an average sale. Moreover, we need several of these sales if we’re going to consider the outcome to be representative of the market. Thankfully, there are a few such sales, but for the sake of our concept, we’re going to need to cast a wider net. Let’s look at lakefront properties that have sold in the past 12 months that also sold between 2010 and mid 2013. In a low volume environment, which Geneva is in good times and bad, we’ll need to open the view to capture a larger sample size. Those MLS sales that match the stated criteria are as follows:

These are the handful of sales that follow our pattern.  The sales are not exact, since transfer prices can fluctuate based on allowances for furniture and other personal property, and the sales are not particularly equal since a sale in 2010 was of a property that likely still depreciated through 2012. Additionally, at least one of these properties was remodeled and updated in between sale dates (1014 S Lakeshore). But this is all we have to base our estimates on. These sales point to an average increase of just 10%.

Is that it? Is that the answer to the question? Well, not really. This is just a small sample size. We sell on average around 23 houses a year on Geneva Lake and this is just a snapshot of five of those sales. I would guess the market gains across the board have been somewhere around 20% since our market bottom of 2011/12. The market hasn’t yet printed enough volume to draw attention to that gain, but that’s my estimate and my eye is fairly keen. The market today is testing that 20% theory with several current listings that had previously sold during that recent market bottom. On average, these sellers are seeking 30% or more over the prior sale prices. The test today is to see if a market that is as robust and active as our lakefront market can indeed support that large increase over such a short period of time.

Do we know the answer to that question? Nope, but the good news is that the question has been asked and the market will answer soon.

The Why

The Why

It was windy. It hadn’t rained yet, but the clouds had overtaken the moon and everyone knew the rain was near. It wasn’t warm anymore, not warm like the day and not warm like the summer. It was cool. Cool like fall, cool like late-fall.  The day had given us a taste of summer, whether or not this was the last taste no one could be sure. But the wind blew the trees and a few leaves fell and the rain was coming and the moon had gone dark. It wasn’t late. A month ago it would have been light, or at least glowing, the last bits of the day still visible.  It was dark.

But the porch lamps were on and the screens are still free from their winter canvas.  A distant whiff of woodsmoke in the air, blown here by that wind that stripped a few leaves with it. The night was damp even before the rain came. Damp like a mountain night, cold like one, too. Cars clogged the driveways. The paved and cobbled drives that lead to the lakefront homes were littered with cars, just as the gravel drives with grass creeping in from the margins that lead to the small wooden cottages were filled as well.  A porch table with the mostly eaten dessert still left out, a crisp probably. Peach I’d bet, because the apples are not yet in season even if the cold wind proves their time is very, very near.

A flashlight in the yard. Kids running and playing and hiding behind the trees. The wind masks their steps even as the fallen leaves of late summer give them away. The adults lounge on that summer porch, with their bare feet tucked under blankets. The old wool ones look so nice in that porch stack, but they’re scratchy and uncomfortable and everyone knows it. Laughter leaks from one porch to another. A cruise boat pushes through the darkness, the revelers laughter making it to shore as nothing more than a happy murmur.

Me? I wasn’t on a porch. I was just driving a truck back to my parents’ house. Down the roads I know so well, around this corner and turning at that one. The streets full of those weekend cars. The porches light. The kids playing. The stories being told.  The weather, that damp cold night, it wasn’t great. It wasn’t even okay. It was pretty terrible, really. But the weekend went on, and the people gathered at those houses. The porches are all different, some large and fanciful, others small and bare. But the night was all the same, each house happy to be in use. Each group happy to have gathered here, at this lake, during this time. Even on the darkest, dampest of summer nights that feel more October than not, this scene is the same. We come here because we love the lake and the sunshine and the way it makes for a summertime afternoon. We stay here because at night on a cold porch with damp cushions and scratchy wool blankets nothing feels more like home.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

This market has a way about it.  Sometimes the market feels slow to me. It feels sluggish, lifeless. It feels as though the last seller has sold and the last buyer has bought, and the rest of the days we’ll just while away, wishing for the way it was. It feels as though we’ve done everything that we were going to do. We’ve sold the last big house. Sold the last lot. Sold the last cheap house. It feels as thought we’ve run out of tricks. And then a new week begins and the market proves why it is the single most robust vacation home market in the entire Midwest.

This week was one of those weeks. New contracts flying. New listings selling. A fresh contract on my lakefront home in the South Shore Club ($4.595MM). A fresh contract on a baseball player’s house ($4.995) in Fontana. A new contract on an entry level house ($1.195MM).  I wrote on that house earlier this week on behalf of a buyer, only to be told the house had just the day before gone under contract. A listing on 68′ in Lake Geneva for $1.799MM, under contract within 24 hours of hitting the open market. A contract on a spec home in Cedar Point ($3.85MM). Two more contracts are still pending,  those on my listing on Jerseyhurst ($2.895MM), and a lakefront in Knollwood ($3.325MM). The market, just when it seemed as though the summer lull was taking hold, has surged.

Of the 28 lakefront homes available today, 7 are pending sale, leaving just 21 available homes.  Lest you think all of the good homes are sold, consider that there’s still a lakefront home available on Geneva Lake priced under $1MM.  We’re going to run out of those homes someday, so if you have vision, it’s time to snap up this remaining bit of aged, cheap inventory. My listing in the Elgin Club ($1.975MM) has no reason to be available today. It should be sold. Perhaps I’m not very good at this game, because I’m failing on that house. It’s a large house on 50′ of level frontage with private pier and fantastic features, and it’s available today.  You should come see it this weekend. My listing in Fontana for $3.2MM is turn key perfection. My Loramoor lakefront for $5.995MM couldn’t be replicated for the price it’ll sell for. The market might be active, but there is value still to be discovered.

Aged inventory has a way of weighing heavily here, and today there is still plenty of it. There are properties entering their second autumn on market, and those homes, in spite of the market conditions, appear ripe to sell right. Let’s go look at those together. Let’s revisit the things the market has passed up time and time again. And let’s be first in line for the new offerings that are bound to make their way to market this fall. Remember, September is only fall in our minds, it’s still summer on our skin.  For now, let’s rejoice in the summer that we’ve had. Let’s be proud of this market, and of the recent spate of sales that will let 2017 be our sixth fantastic year in a row. And let’s realize that in spite of all this activity, there are still deals to be had. Here’s to this place. Here’s to us. Here’s to the last Labor Day weekend you’re ever going to have to spend in the city.

Sell The Lake Geneva Riviera

Sell The Lake Geneva Riviera

In a recent Lake Geneva Regional News article, City of Lake Geneva Alderman John Halverson, when discussing the state of the Lake Geneva Riviera and a desired multi-million dollar referendum for repairs asked, “If we don’t get it passed, what should we do? Sell the building?”

I’m so glad he asked, so that I can answer.  Yes. That’s the answer. Sell the building. The question was posed rhetorically, in a way that would suppose a yes answer would be ludicrous, even sacrileges. But the best way for the City of Lake Geneva to deal with the aging Riviera and the several million dollars of repairs it supposedly needs is to sell the building to the highest bidder. To keep the building beyond 2017 would be a significant mistake, and would prove once again that the city has no regard for the tax payers who already pay the highest rates around the lake.

I’m not suggesting the building be sold in a traditional manner, wherein the new owner would have the flexibility to do with it as he or she pleases. I’m suggesting that the city utilize the power of deed restrictions and covenants to clear an aging liability from their books.  The Riviera is a most impressive structure, and its unique location and design lends a visual boost to downtown Lake Geneva and that commercialized lakefront scene. The structure has anchored downtown for generations, and should be respected.   In the 1930s my grandmother would ride the train up with her sisters to dance at the ballroom on Saturday nights. She met my grandpa there, while he was hawking popcorn or cigarettes or newspapers. The Riviera has a deep and important history, and the building itself should be preserved. That’s why the property should be sold. Here’s how it could work.

The city slaps deed restrictions on the property, dictating the allowable future uses and the exterior design and color palette of the structure. What happens to the interior shouldn’t be any concern of the city, especially once they receive a few million dollars for the building.  With the deed restrictions in place, the aesthetics of the Riviera and the setting will be secure, no matter who owns the deed. There are options as to how to sell the space. The city could rezone the building into a condominium, and retain the lower level retail spaces to be operated as they are today. The problem with this model is that the city would then still be on the hook for repairs, that’s why it’s best to sell the entire structure. Separate the park from the building, retain the park (the fountain, etc), and sell just the building. The entire thing.

Who buys it? Well, I don’t know. Maybe one of the nearby local business would like added square footage? Maybe the cruise line operating from the adjacent city pier system?  The cruise line could utilize the space for some offices and use the ballroom for a wedding venue, just as it is used today. The difference is that rates could be increased exponentially from those paltry sums the city charges, and the building could be modernized to host more events.  Some might suggest the increased usage of the facility would be a negative for the city. I’d argue that the structure is a ballroom. It wasn’t built to sit idle. It was built to host bands and dances and parties of epic proportions. Why not let the private market return the building to its original intent?

The city has estimated the repairs to be in the neighborhood of $5MM. My estimates that I’ve considered now for all of five minutes prove that the cost would be significantly less. The problem is municipalities pay retail plus for everything they do (just check on the cost of school construction for proof). The private market could handle those repairs for less than a million dollars, likely with ease. Yes, a new owner would have to undertake these repairs, which drives up the initial investment. Yes, the fact that the city has broadcast these repairs to the world means a buyer will use the city’s figures against them in a negotiation.  Yes, that might mean the building sells for less than it might otherwise sell for. But the alternative is worse. The alternative is the city taxes its vacation home owners to fix up a building that loses money. To repair the Riviera on the taxpayer’s dime is the very definition of throwing good money after bad.

The idea of selling the Riviera hasn’t been discussed much in public, but it’s time the conversation begins. There is no reason for a city to own such a valuable liability. Deed restrict it. Zone it to allow very few select future uses, and sell it to the highest bidder. Since I am nothing if not a fan of Lake Geneva, I’ll even offer to sell the building for the city at a reduced commission rate.

New Lakefront Listing

New Lakefront Listing

The South Shore Club is all quite nice. The pool and the entrance, the tennis courts and the piers. There’s nothing like it here, and likely never will be anything like it again. Within the South Shore Club there are nice homes, some better than others. Some new, others older, some by the pool and some near the tennis. But beyond the typical homes in the SSC there are the elite. There are the select homes that do not merely angle over lawn and towards the water, but those that sit right up on the water. The front row. There are four of these built homes that match this description, the last having sold in 2014.

But of those front homes, only two were built in a sunny lake home style. Two have white trim, light cabinets and brighter exposures that feel more like a typical lakefront home on Geneva.  Today one of those rare lakefront homes is available, light and bright and ready for a new vacation home owner.  N1619 East Lakeside Lane features eight bedrooms and four full floors of finished living space. The lower level is a walkout to the lakefront, with a large family room anchored by a full masonry fireplace.  You’ll also find a bunk room with three adjacent baths. If you have a large social circle and feel the need to entertain, this house was built with you in mind.

The current owner (who is the original owner)  has a very large family, and when working with Orren Pickell and the architects to design this lakefront, he made certain that his entire family would have space of their own. That’s why the elevated bedroom and bath count. That’s why the fourth floor finishes into an office/den with an additional bedroom and bath. That’s why the lakefront deck is oversized and wide. That’s why the garage is deeper, with 8′ garage doors so your SUV can actually fit (a rarity given some of the tiny garage doors that plague certain SSC homes). That’s why there’s an elevator and a main floor bedroom suite.

Beyond the sheer size, there are finishes here that are both expected and unique to this home. Waterworks faucets and marble floors. Wood-Mode cabinetry and Wolf ovens. Sub-Zero refrigerators, both in the kitchen and the butler’s pantry. A solarium, constructed on the south side of the home in a classic English style, would make a terrific office or reading room.  There’s nothing lacking here. No space concerns, no quality issues, and obviously no location issues. This is the front house. The best house. The lot that faces the water fully, with a slight western tilt to take advantage of the sunsets.  The location on the water is tremendous, opening to the widest section of the south shore, offering dramatic viewing of the nearby Lake Geneva Yacht Club regattas.

Offered today for $4.595MM. It will be on the MLS later today and available for tour this Sunday. If you’d like a tour of this home and the remarkable South Shore Club property, I’m here to help.