Mar 10, 2014 by David
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I watch a reasonable amount of college basketball. I do not watch it solely because I like the sport of basketball, so you won't find me making time to watch some game between two teams that I don't care about. I watch Big Ten basketball because I root for the Big Ten in all things, at all times. I root for Wisconsin first, because I am a Wisconsinite not just by birth, but by increasing admiration of this great state, too. In all levels of basketball, as in all sports and in real estate, there are players of varying skill.
It is easy to watch a game and root for the star players. They are good, after all, and this is why they are the stars. In sports, there is no special consideration for political or otherwise mandated reasons of fairness, there is only consideration of skill, and players are rewarded commensurate to their level. When watching these basketball games, like the one Wisconsin played yesterday against Nebraska, the team, not the movie, it's easy to forget about the players at the end of the bench. The bench is long, it may be deep, and the player relegated to the very last chair on that bench generally looks like he doesn't belong. He sits and he sits, and when the star players come from the floor he sometimes offers them high fives, and once in a while they return the gesture. He brings them water, too, because stardom is a thirsty throne, and then I imagine he's happy when one of those star players says something nice to him in practice. Like, nice shot.
When we do think about this last player on this long bench, we forget one very important thing: He is also a star player. Not on this team, not right now, but on his team in his town, he was everything. He was the big man on his smaller campus, and when the skinny subs on his old team would make a nice shot, he'd sometimes tell them so. Usually, he didn't, which is why his position at the end of this new bench is so upsetting to him. He kind of understands that he isn't as good as the other players, but he mostly blames the coach. If coach'd have put me in, we'd have one state. No doubt. No doubt.
The players in the NBA are like this, too, except they were stars at the small town school, and then still stars at a big town school, and now in this biggest of leagues they are just players at the end of the bench. They get water for the players sometimes, but mostly they just think about how they should be playing, and how the coach isn't all that nice, and how the cheerleaders are pretty. And in this, there is a simple truth about the lakes around Lake Geneva.
They are fine, these lakes. I say bad things about them, but mostly they're just fine. They have water and shoreline, and houses and trees. To someone who grew up somewhere far away from here, in a land where a lake is a lake is a lake, they are accepted. They are stars in the eyes of some, but only for as long as they are compared to each other. Some are better than the others, but they are all stars on a small town team. They cannot be expected to compete with Geneva Lake on this bigger stage, and so we shouldn't forget that they're still fine players. It's just that they're not true stars, and so they shouldn't get so upset when we decline their high five.
Mar 07, 2014 by DC
My wife is generally in a fair mood. She's from the great white north, which I didn't capitalize on purpose because even though it's to our North, and even though it is indeed white more months than it is green, I don't think it's all that great. Since she hails from this northerly land, she is accustomed to snow and ice and temperatures that rarely warm above zero, Celsius, of course. I'll never forget the first time I flew to visit her in her home town. I flew aboard a small regional jet, and when we landed at the airport I was surprised that the plane didn't taxi to any sort of terminal. Instead, it just stopped on the runway somewhere, opened the door, and some steps were wheeled in place. It was as we had flown to a small exotic airport, except it was approximately 40 degrees below zero. Be it Fahrenheit or Celsius, it doesn't matter much at that temperature.
My lungs stung with each cautious sip of that winter air. My eyes and my nose froze, and the wind whipped across the runway and our wheeled steps and I hurried through that misery to the airport, which was only moderately warmer. I had wondered what the story was behind this weather. Was it a 1000 year freeze that just so happened to occur during my initial visit? Was there something wrong with the jet stream? Had it pushed north to the pole and then directly south to Winnipeg, carrying with it all that cold and snow and so much wind? I asked these questions of my not-yet-bride, and it turned out that there was no special explanation for the extreme weather that day. It was just a Tuesday in January.
With this background, you know why it was a big deal this morning when she looked outside and said that she didn't want to do this anymore. Do what? I asked. She said that she didn't want to even look outside anymore. It was too white, too cold, too stark. The snow was too high, the air too cold, the sun too bright in its ineffective mockery of our plight. When a girl from Winnipeg proclaims winter to have been too much, you know it's a serious charge.
There is some warmth in our forecast, but what we must do now is embrace the coming slop. Winter is fine, as long as it is real winter. White and fluffy snow is pretty, even if at this late date we find nothing pretty about even the prettiest of snowfalls. While fresh snow is nice, melting snow is anything but. Melting snow is messy snow, and it's dirty and it's filled with bits of trash that hid inside its forgiving mass for so many months. We must begin the task of ridding this snow from our views, and in the process, things are going to get really, really ugly. Piles of snow will shrink and brown, and we'll be forced to drive through muddy puddles of ice and melt, and it's not going to be fun. March is going to get ugly, hopefully in a hurry.
This is why March may be the best month ever to look at vacation homes here. If you can find your way to the lake on a March day, with this aforementioned browned slop everywhere, and you can find value in a home and deem the setting to be pleasing, well then just imagine how beautiful that home will look once it isn't cast in this most unflattering light. If a home is acceptable when surrounded by mud and ice, just think of how it's going to look when surrounded by the lush green of a summer that's bound to come.
Mar 05, 2014 by David
When a market is down, I have absolutely no problem kicking it. I also don't like to make excuses for market segments, as I'd rather try to identify the problems that lead to the market troubles, and then, once those are identified, I'll kick a bit more. Along those lines, I also have no problem celebrating the successes of certain markets, particularly when those success come on the heals of some heavy duty kicking. Enter Vista Del Lago.
During 2013, there were two sales at Vista Del Lago (per our MLS). Both of those sales were of condominium units far away from the lake, and both sold under $300k. A two handle hadn't been seen in Vista for many years, so these sales prices were a surprise to some, even to me. The problem, as I saw it, was that the sort of buyer who would generally buy a condo for $280k wouldn't be able to afford the steep City taxes and the heavy Vista dues. This is likely the usual case, but two buyers last year bucked that concept and bought their own vacation homes at Vista Del Lago anyway.
There was inventory available at Vista during all of 2013, but only the two sold. 2014 has proven to be much kinder to this lakefront association, and in the past week there have been two closings here. One sale printed at $415k, the other at $550k (neither sale was mine). As you'd expect, both units have market stories that are long and varied, and both stories are likely the sorts that no one would rather talk about. Except me, because of the kicking.
The unit that closed at $550k originally came to market in 2009 for $1MM. One Million Dollars. The unit was never worth that, mind you, but that was the price. What followed over the next five years is a classic example of market chasing. The price was dropped, systematically though unevenly, before it finally settled at the $599k asking price that yielded the $550k buyer. The unit was unique, and I admit to liking it quite a bit. The finishes were old, but the layout was unique, the views divine, the slip deep and close. The issue here is the nearly $15k tax bill, combined with $888 monthly dues. The unit I sold at Eastbank a couple weeks ago had a tax bill that was a tad higher, but the unit was much larger, and the development much more exclusive.
The unit that closed at $415k was listed $444,900, and followed a similar, if less dramatic, pricing path. I actually had this unit listed for sale in 2010 for $589k, and obviously failed to sell it at that time. The reductions came after my listing was up, and this price of $415k was a fair market price paid for a three bedroom Vista unit. The taxes on this unit exceed $10k, requiring a buyer that can not only pony up the purchase price but one who can stomach the ongoing monthly expenses. Thankfully for Vista Del Lago, these two units have both found buyers, and in that, we can all be happy.
There's another unit pending on the lakefront at the moment, that of a three bedroom penthouse at Bay Colony. Listed at $650k, the unit needs updating, but it is a rare unit in a very nice location. Combine that pending sale with these two Vista Del Lago closings and my Eastbank closing from a few weeks back, and the lakefront condo market has started 2014 in a most impressive fashion. Expect sales to continue in the lakefront condo market, as many seller's prices have finally succumbed to buyer's expectations.
Mar 03, 2014 by David
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I am not in the business of manufacturing. I do not make anything, I do not warehouse anything. I do sell something, and I do so through a network of distributors, better known as real estate agents. They have shinier cars than most distributors, and they have large hair and magnetized decals on their cars, but they are still distributors. Because I'm not in the business of manufacturing some new product I've never had to take the temperature of the buying public as it relates to that new product. If I were to make a wooden toy, then produce that wooden toy, then market that wooden toy, I'd find out if the world liked it shortly after my wooden toy hit the shelves.
What if they didn't like it? It is a nice wooden toy, after all, and all I'm asking is $75.99 for it. Seems reasonable, given all the wooden toy making machines I had to buy. My costs are high, because I have a secretary and some staff, and at least one guy who comes in late at night and sweeps up the sawdust. After a week on the market, I sold four little wooden toys. My projections called for 80,000 sales. So do I keep looking for the right market, or do I adjust my toy to meet the market that I'm already in? Do I advertise more to find the right wooden toy buyer or do I just cut the price to $9.99 so I can sell loads and loads of them?
If we're in the business of making things, and instead of toys we're making big stone and slate mansions, and instead of warehousing them in some dirty business park near the airport we warehouse them on a beautifully coiffed parcel of land on the southern shore of Geneva Lake, we've already decided what we're going to do to increase our market share. We're not going to beg for our position in the market. We're not going to incentivize our distributors by offering them increased pay. We're just going to drop our prices until the market deems our product worthy of our sticker.
Another month now past, another South Shore Club sale. This one of a $1.895MM listing at 1599 Lakeside Lane. This was an early Pickell built home, with the sorts of finishes you'd expect but not too many that you didn't plan on. It is a beautiful home, on a lot that's close to the lake- to the North of the swimming pool- and I just sold it for $1.875MM (personal property included, actual real estate sales price was $1.725MM).
This home had been listed near $3MM at one point in the history of the SSC, and that price proved to interest no one to the point of check writing. There are detractors now that will say this sale was "too low". That it was somehow detrimental to the health of the SSC, and that it wasn't just what the doctor had ordered. That's what narrow minded, small picture people think, and we're nothing if not open minded, large framed schemers. That sale takes inventory off the market, removes it from disinterested hands and places it into new, strong, enthusiastic hands. The key to a vibrant community, one that excels in practice as well as in theory, is involved, happy owners. We now have another one in the SSC, and this just the latest in a string of sales over the past 24 months that I'm happy to have played a role in.
There is another sale pending in the SSC as well, another home, this one incredibly beautiful but also closer to the lake and therefore more expensive. Since the times in 2011 when I suggested price ranges for the club that would make market sense, and that would, in turn, propel the club forward, the days and months since have yielded six sales. All of those sales have fit nicely into my targeted price structure, and there's no reason to think that the following sales will not follow suit. We'll need to clear aged or troubled inventory before price appreciation can begin, and we're no more than two sales from exactly that taking place. The South Shore Club is running smoothly, the market is responding accordingly, and there's little reason to think the future is not exceedingly bright here.
So what's next? Well, next are the vacant lots. Five in total, all looking for their first non-declarant owner. Price targets are easy now, especially after a 2013 where I sold three vacant SSC lots. Buyers have clear value ranges where their built home should fit, and if a buyer can buy a lot and build in accordance with that pricing vision, then they should be secure in their decision. But this is the financial, and while I'm happy to tell you that everything has been falling into place, the real magic of the club happens this summer, when owners walk over grassy lawns down to their piers, where their boats, and their Lake Geneva summer, await.
Feb 28, 2014 by DC
Let's quick pretend you're looking for a cabin. Not a cabin here, mind you, but a cabin anywhere. Not exactly anywhere, but within this state, somewhere, North or South, East or West. You're geographically liberal, but design specific, so you'd buy a cabin on a big lake or a small stream as long as the property was wooded, mostly. You want this cabin to be small, but not too small. 900 square feet is about right for your purposes of escaping your mundane everyday, and small means that the cost doesn't exceed your modest budget. The cabin must be rustic, but not too rustic. It must have one bathroom, and the toilet cannot be one that composts. We're looking for rustic, not barbaric.
There must be a fireplace, ideally, but a wood stove will do. How else are we to warm that cold wooden cabin on those few days during the winter when we escape there, to snowshoe or to just split wood? And why would we split wood if we had no fire to stoke? So, we need a fireplace, maybe a stove. And we need a toilet, one that flushes. We also need a chair, or a couch, so we can sit and read. We don't want the internet to follow us to this cabin, because the internet is everywhere, always on, flashing and beeping, and we're trying to get away from all of that. We need a television, but not to watch live shows. We need that TV to play movies that we pick up at the small store that's not too close to, but also not too far from, our small cabin. We wouldn't watch anything stressful, instead we'd watch slow movies where the characters speak with steady purpose, nothing too fast and nothing too suspenseful. We wouldn't rent scary movies about people in the woods in small cabins, for obvious reasons.
If this is what we're after, and we have the entire state as our marketplace, this should be so easy to find, right? After all, we're just wanting a small cabin, ideally painted brown with white or dark green trim, and we're willing to drive the limits of the state to find it. Our budget is modest, but most markets in the state are too, so we have options. Lots and lots of options. Except that when we start exploring those options, they aren't right. One that we find has the perfect setting, down a narrow gravel road. But the cabin is too small and the stove is on the front porch attached to a propane tank. Another one has a wonderful stove, a Viking one, but it's right next to seven other cabins that were likely built by the same bearded craftsmen, so it's out. Another has a great lot, a great cabin, a great roof, but no fireplace. No wood stove either. The Realtor tells us that wood stoves aren't allowed in wooden cabins here, because of the troubled relationship between fire and wood.
We are frustrated. We have but one desire, and a whole and varied state to fulfill it in, and we cannot find satisfaction. We find the right land, but with the wrong cabin. We find the right cabin, but the land is flawed. We are basic in our goal, but the idea of having a cabin to escape the stress of everyday is, at its very core, a goal that can only be fulfilled if the cabin is right and the view pleasing. There's little point in escaping one type of stress and driving to be met by another kind of stress, even if that new stress is simply a result of a giant stack of freshly split wood with no fireplace to feed it into. This is why building happens. Whether in some far flung wooded land a ways to our north, or right here in Lake Geneva, near the lake or on it or miles from it. Building eliminates the need to find the right structure, and we instead have the joy of focusing only on the land. So let's find some.
Few markets can offer vacant land for $30k and $8.75MM, but Geneva can. Here are the vacant properties with lake access and lakefront on Geneva
. They are varied, and there is literally something here for any budget. Looking for a small lake access cottage in the woods? We have that. Want to build a small lakefront house on a nice lot? Covered. Want to build a massive compound, an ode to your success, a shining beacon that announces your arrival? Easily accomplished here.
But what if lake access isn't what you crave? What if you're wanting a country life, someplace you can have a large garden and an orchard, somewhere you can have some bees busily making honey? What if you'd like to shoot guns into hillsides and ride ATV's through the woods? What if your vacation home doesn't involve navigable water, and instead just some space to breath and think and be? Well, then consider these country parcels
. They are beautiful, which is why I included them in your list. Maybe it's time to stop looking for the right house, and instead just look for the right dirt.
Photo by Matt Mason Photography.
Feb 26, 2014 by DC
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Whenever a nurse is about to strap that arm band on me, I warn them. Before they squeeze that bulb to apply the pressure, I tell them that there's a good chance my blood pressure will read at least a touch high. Last week, I did just that, and the nurse squeezed the pump and constricted that band around my left arm before releasing it slowly, counting to herself. She told me it was a bit high, which is what I had just told her. The first time I had a high blood pressure reading was sometime to the dark side of midnight in an overcrowded, understaffed, Naples hospital. The serious woman pumped the primer, counted, and told me that this pressure of mine was rather high. She asked if I knew why that might be. I used my blood shot eyes to point first towards the large clock on the wall, and then to the heavy hook buried in my arm. She understood, I think.
The blood pressure was a bit high last week, as it generally is when I'm in a doctor's office awaiting the most recent verdict on my lifespan. My stomach has been bothering me for a while, not in the way that it presses against my pants in a way that I wish it wouldn't, but in a mostly achy, dull sort of way. It hasn't been right for quite some time. Perhaps it was my diet, consisting of healthy enough foods in unhealthy quantities. Perhaps it was stress, caused from this or from that, depending on the day and the hour. The first culprit was lactose. The Dairy State isn't some outdated license plate moniker, like "Live Free or Die"
, but it is instead a living, breathing, fact of Wisconsin life, and I am nothing if not a lifetime subscriber. Cheese is good, cream too. Have you ever eaten cereal with half and half instead of milk? Me neither.
So I took to putting some sort of coconut creamer in my coffee for a while, and I avoided things with cheese. For a few days, this seemed to help, but then it didn't. So I poured real cream back into my lonely coffee and set about figuring out what else might be causing this discomfort. Stress is one of my closest, most trusted friends. I've done much of my best life work when I'm stressed, and I don't really know how to operate any other way. If I'm not pressing, not stressing, then I feel lazy. Work ethic is a wonderful thing, but it can take a sinister turn when time spent not working or thinking about work is time deemed wasted. With this in mind, I prescribed myself a vacation. Marco it would be, January it was.
I took to the waters there, sun on my skin and wind in my hair, my tanned hands gripping a stainless steering wheel, and for a while my mood improved. But soon after I felt relieved, I felt wrong again. The tide was pushing my boat in ways that I wished it wouldn't, and my dream of a wild trip through the islands turned into a sad realization that the intercoastal is only a highway on moving water, filled with all sorts of rude testosterone. The water was colored, but not clear, the sun was warm but not hot. The wind blew, a bit too much, sweeping over so much open water and then funneling down those mangrove lined rivers. I may have had the prescription right, but the cocktail was all wrong. There was too much salt and too much wind. There was water all around but none to swim in, and there were fish to be caught but all with large teeth and strange scales, and at least one variety that made my hands itch for hours after handling it. This medicine had not worked.
And that's why I sat in the office last week, and why on another day they put medicine into an IV and pushed a scope down my throat. When I woke up later, with a request for water and a fresh awareness that even though the scope went down my throat before finding its way into my stomach, my pants were undone and disheveled (true story), I didn't feel much better. I felt a bit relieved that there was no pastor or priest at my bedside, but I also still felt unwell. I went home, slept through some Olympic events that I didn't care to miss, and went back to work.
My boat is buried under snow in my back yard. Most store their boats in shelters, I store my boat behind a section of woods behind my house, proving that out of sight really is out of mind, but only some of the time. You see, the doctors haven't yet figured out what's making my stomach feel a bit off, but when I think about that boat and I look out at all this ice, I have a feeling what would make everything better. I need sun on my skin and breeze in my hair, and I need scenery with colors in places other than the sky. I need a blue lake ringed in green foliage, and I need it STAT. My attempt at fulfilling this need last month failed, and it did so because it took a few of the right components and administered them in the wrong context. I don't just need sun and water and my hands on a steering wheel. I need some Lake Geneva sun, and some Geneva Lake water, and my hands on my own steering wheel. Until then, I have a feeling my stomach is going to be bothering me.
Feb 24, 2014 by DC
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I admit to being less productive when the weather is bad. In the summer, when there's a big storm, I can work just fine. In fact, I work a bit better on a rainy day than I do on a sunny one, because my watery distraction is less fun in the rain. In the winter, things are different. When it is snowing with malice, I tend to go about my business until there is no obvious business left to be done, and then I feel the pull of a deep couch and long for the heat thrown my way from a wood fire. When it is brutally cold, the same longing forces its way front and center. Last winter at this time I was just beginning to nail up the first of hundreds (thousands) of boards that would become the walls and ceilings of my new house. It was cold in that house, and the work was fulfilling during the moments when it wasn't overwhelming. That was last winter, so who can blame me for looking to reap the comfortable spoils of last year's labor?
Even with these distractions, I was remarkably productive last month. I believe my sales volume from December and January should approach $10MM, which would be a most welcome and thrilling start to this year. The market is hot in many segments, but perhaps most fiery of all is the lakefront market itself. There are buyers, there are offers flying through that big series of tubes. There are pending sales as well, some closing very soon and others just sort of soon. There is activity in this lakefront market, lots of it, and that begs the question: What if January and February hadn't been the most miserable winter months most of us have ever experienced? Would our volume have been even more significant without those afternoon fire sessions and the late night canceled appointments that came quickly on the heals of another dire weather forecast? I suppose we're left to imagine what could have been, though what has been is just fine by me.
There are exciting happenings on the lakefront right now. There are as many as five lakefront deals pending sale now, and I'm pleased to mention that I am personally involved in three of those. It should be five, I know. There is a deal pending in the South Shore Club, that of my listing at $1.895MM, and most people know this by now. What you may not know is that there is another deal pending in the SSC at the moment, a private deal of a desirable home at a solid market price. When both of these sales close, the SSC will continue the transformation from a segment routinely taken for granted to one that has undeniable momentum, and that momentum is creating scarcity. Showing activity in the SSC is up as well, and I'd be very surprised if 2014 doesn't bring two more sales to the SSC, allowing us to end 2014 with a previously unheard of annual tally of four sales.
There is a fresh deal pending on a $4MM offering in Fontana, and an old deal in the Birches still pending sale at $2.15MM. The large vacant lot on Fontana's Northerly shore listed at $2.95MM is pending sale as well, after a motivated buyer jumped on that immediately after the January list date. My deal on the 5.5 acre property on Southland ($2.475MM) is still pending sale as well. This is the activity, and it's most welcome. It shows that buyers understand they must brave the snow and the cold of winter if they'd like to delight in the warm sun of summer. The activity is great, the buyer count high, and most of us appear somewhat confident that this ice cover will melt away no later than the fourth of July. (To my literal friends, this is a joke.)
But all is not necessarily well on the lakefront. There are pricing issues that I see, and I'm not excited by the thought of over confident sellers stifling a solid year. There are a few lakefronts that I think will be coming to market over the next week or so, and the rumored prices are quite high when compared to realistic values. I'll concede that the broad market has risen perhaps 10% from the market lows of 2010-2011, but this simply means that if you bought a lakefront home for $2MM during one of those years, and you bought it right, then the price may be $2.2MM at the moment. You would be forgiven if you asked $2.4MM, to see what buyer may be willing to pay a higher premium, but I see an urge in the market for sellers of $2MM homes to ask $3MM, and of sellers who should list at $2.5MM to ask $3.5MM. This is a dangerous pricing trend that could turn off buyers who are currently willing to award fresh sellers with some reasonable premium.
I say "fresh sellers", because these are the sellers that have the best shot at surprising the market into paying them a premium. Stale sellers, those of homes or properties that have spent much of their time on the market over recent years will not be able to achieve such a delightful premium. If a property has languished on the market, it's bound to only attract buyers through price and price alone. That's why this year will be rocky, because some properties will sell at steep discounts to prior ask, and others will hit the market fresh and command a sales price very near, or possibly at, their asking price. Expect a wide gulf between list and sale prices this year, as aged inventory will have to sell at a discount while new inventory will do no such thing.
Sellers, it's a great time to hit the market. Buyers, it's a great time to be in the market. Both groups should be wary, however, as buyers should be seeking proper counsel so they understand the difference between a new property that will sell quickly, and a new property listed at a price that seeks solely to take advantage of the naivete of some (many) buyers. Sellers, price accordingly and buyers will respond with fervor. Buyers, don't make a big mistake and reward the sellers who are about to cast their big wormy hook right in front of your face.
Feb 21, 2014 by DC
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We needn't look too far back to understand what happened here, assuming we're the smart ones who know that what happened then is quite important when trying to figure out what's happening now. Eastbank Condominiums are not a well known group of condominiums. While their location is front and center- directly on South Lakeshore Drive just south of downtown Lake Geneva- the gates and the trees and the nice fence help temper the obvious. The condominiums are not old, but they are far from new. There are only eight units in all of Eastbank, but that exclusivity wrongly suggests rarity. There have been sales at Eastbank, plenty of them, and the sales from 2002 through yesterday tell a story that the rest of the lakefront condo market would rather not hear.
Wednesday, I finally sold my unit on Seaver Lane, within Eastbank, for $675k. The price, at first blush, is low. It was a great price for the buyer, indeed, but it wasn't terribly far from the actual market value of that unit. As with many small associations, timing matters. Two years ago, an Eastbank unit came to market at $895k. That unit was right next door to the unit that I just sold, so the views were similar and both units boasted a two car attached garage, a nice boatslip, and four bedrooms spread out over two floors of finished living space. Around that same time, another owner in Eastbank approached me about selling. I told them that their best tactic would be to undercut the $895k unit, in hopes of capturing the first buyer that finds their way through that Eastbank gate. They declined my advice, and listed in the low $900k's, just above the other unit because, after all, their unit was better.
Before they made the decision to list at a higher price with another agent, I implored them to consider the likely scenario. I told them that the other unit was being sold to settle an estate, and as such it would sell somewhat low when compared to that lofty asking price. I told them that once it sold low, they'd be forced to sell lower still. I told them that it would be best to get out in front of that other sale and set the market so that they wouldn't be in the unfortunate position of having to match the market. I told them what I thought, and that was that.
Shortly after, I brought a buyer to Eastbank. It was spring of 2012. The buyer looked at the two units, both priced around $900k, and opted to bid on the lesser priced unit. We bid low, they countered. We bid low again. They accepted. In May of 2012, a buyer whom I represented paid $750k for a great unit at Eastbank. The other unit was still for sale, still with another broker, and it was now forced to accept the reality of a $750k comp despite the fact that its asking price stayed around $900k. The dubious scenario that I had laid before them was coming true.
In the spring of 2013, I was contacted by the owner of the remaining unit, and we listed it for sale at $835k. The price was better, closer to where it now needed to be, but still not especially dazzling. I tried to sell the unit throughout 2013 but to no avail. After a series of price tweaks, we succumbed to $775k last fall, and by December I had one fantastic client expressing interest. That client closed on their new Eastbank condo this week for $675k, a price that was, out of necessity, lower than the sale that I had there in the spring of 2012. The marketing had played out exactly as I thought it might, and the buyer was the ultimate winner in that scenario.
In 2004, a similar unit at Eastbank sold for $965k. Then, in May of 2006, that same unit sold for $1.275MM. A few months later, in August of 2006, another unit sold for $1.385MM. Eastbank was undeniably hot, and then it went a few years without inventory. The market shift of 2009 didn't affect Eastbank immediately, as there was no inventory and without inventory there can be no sales and no lower print prices. Then came 2012, and with it the story that I just told you, and prices that were recently as much as 50% off those prior market highs. Eastbank adjusted to the times, the two available properties sold, and now Eastbank is once again left without any inventory. The stage is now set for a rapid price recovery here, as the 2012 sold unit was beautifully improved by my buyer, and the fresh sale promises to be renovated as well.
Eastbank took its medicine, pushed the two available units off of the market and into strong hands, and is now primed to see better days. There is nothing quiet like Eastbank on the entire lake, as the units are large, the slips canopied, the garages large and attached. These are more homes than condominiums, and the next time an improved unit hits the market we won't expect it to last too long. Will it ever be as hot as it was in 2006? Hard to say, but for today it's safe to say at least one couple is on the verge of a totally different sort of summer.
Feb 19, 2014 by DC
The details of the story are not clear to me, even now. They were never clear to me. The day that my uncle broke through the ice on his snowmobile near Conference Point was a day that I heard about often, but mostly in mere mention and rarely in detail. We knew the story well enough. The ice was dangerous. My uncle fell through it, and was rescued. It was a miracle of sorts, to hear the story told. But we should live our lives hopeful of miracles but never counting on them. That is why we do not jump from the top of a tall building and hope to land on something soft. That is why we buckle our seat belts and why we don't bungee jump with the discount guy with the broken leg. And this is why we stay off the ice.
Ice is fragile, we're told. It is shifty, untrustworthy, like that guy in the track suit who sits at Starbucks all day. We are not to count on it because it is always changing, always dangerous. When ice is covered in snow, it's even more difficult to judge. Is that ice thick under that snow? Or is there a soft spot lurking under that snow, waiting for our feet or our tires or the front skis of our gas powered sleds? There's never any way to know, which is why we are always to approach ice with caution. Whether it's the ice that we crushed off the snowy ledges on our late winter walks home from school, or the ice that forms over shallow puddles in the late fall, we know that ice is fragile and weak.
I know these things, and I've been warned of these things, but when I look out today at that ice I'm unconvinced. The ice that I see has suffocated the lake. It has taken over, and when I look out now I see small fishing houses, and snowmobiles, and trucks. There is one guy drilling a hole in the ice, and I'm guessing he'll be at that for quite some time. The ice, this thing that I've been told is so fragile and so dangerous, is thick. I would guess it is impenetrable, and according to local lore it is as much as 24" thick in many locations. As a child, I can remember my dad taking his chainsaw to the ice and cutting a block of it free from the rest. We put that block in our basement freezer for some reason. That block was big and glorious and clear, but it was not 24" thick.
It was warm yesterday. Sunny, too. It was one of those days that we usually have during winter, except that this winter it was the first day of its kind. On that day, snow melted from roofs and from roads, and my gravel driveway turned to a most unpleasant soup. I sat in a South Shore Club house for much of the afternoon, and enjoyed hearing the steady rush of snow and ice as they slipped from the steep slate roof. While most things melted, the lake today looks like it did yesterday which looks a lot like it did the day before. It is still there, still thick, still bright white and not at all entertained. It is a serious cloak of ice, and I would wager it isn't going anywhere for a long, long time.
Remember last spring? The ice was out "late". It was early April before the last ice turned back to the waves, and we all feared that piers would be going in later than usual. Then, on Memorial Day, there were plenty of piers not yet installed, and we had been proven right- the piers would be late. But that was last year, a year when the ice froze about when it is supposed to and went away mostly on schedule as well. What of this year? What of a year when the ice came early and keeps promising that it will be here until very late? A glance at the 14 day forecast reveals mostly cold temperatures, which means the ice will not be compromised for at least that spell. What will March bring? Will it bring warm winds and rain, or will it bring more of this winter?
There is no way to know, of course. But all we need to know today is that there is lots and lots of thick ice, and it likely has its eyes set on April. Most of it.
Feb 17, 2014 by DC
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This is the in between. The entry level lake access market is somewhat active at the moment, with a few pending contracts and a few closings already on the 2014 books. The lakefront market is remarkably active, with all sorts of offers circulating and many pending offers. While this activity in these segments is wonderful, there are two distinct holes in the market. One in terms of inventory, the other in terms of buyer. Both problems may stem from a lack of quality inventory, or they may stem from a lack of buyers. One is our chicken and the other our egg.
The entry level lakefront market has always been a unique market. It's unique in that many of the homes sold as $1.3MM homes do not remain those same sorts of homes. In that, buyers buy entry level homes and then they improve them to the point where they are no longer in that entry level price structure. If we buy a lakefront home for $1.3MM and then we put a $450k renovation/addition onto that home, it should be obvious that it is no longer a $1.3MM home. This has been the trend on Geneva of late, and I've said it before many times just as I'll say again now: We're sort of running out of entry level lakefront homes.
Given this, it shouldn't be a surprise that the current lakefront inventory is void of any true entry level lakefront offering. In a statement more worthy of 2007 than 2014, there isn't a true lakefront home for sale today priced under $1.8MM. That's surprising even to me, as we had a long stretch of market conditions were entry level lakefront homes in the $1.3MM range were readily and constantly available. Today, that inventory has dried up, and while it certainly doesn't mean that there aren't those sorts of homes in existence, it does mean that the owners of those homes appear mostly content in their ownership. A few entry level lakefronts that were available and left unsold in 2013 should come back to market this year, and if they do we'll expect buyers to be all over them.
The entry level lakefront market might be slow because of an absence of inventory, but the higher end lake access market is slow in spite of its inventory. There are 25 single family lake access homes priced between $400k and $900k. Of those, the MLS shows that only one is pending sale. That pending property is the REO on Geneva Oaks listed in the high $700k range. That segment has inventory in most of our quality lake access associations, and some of those homes have been reduced rather dramatically over their cumulative market times. There are homes with slips and homes with views, and on the surface it would look like there's simply a lack of buyers in this segment, given a basic acceptance that the inventory is sufficient enough.
To look deeper into the inventory, we'll find homes that aren't selling for very specific, individualized reasons. There are several homes on this list with boat slips. Those slips, when viewed through the text of the MLS, are all created equal. Unfortunately for some homes, that isn't the case. Some of the available homes have slips that are troubled- either in extra shallow water, or in a location that makes navigating on anything but the calmest of days a very difficult undertaking. Many times, slips are both- shallow and difficult. Other homes are in high tax districts, with pleasing asking prices but bloated tax bills, creating pause based less on the dining room light fixture and more on the suffocating tax bill that accompanies it.
In spite of the properties that are hampered by some pronounced factor, there is a bit of quality inventory in this segment. There are homes worth a closer look, and it stands to reason that in this very active spring market a few of these homes would be pending. For sellers, this is likely frustrating. For buyers, this is a signal of opportunity. Quality homes that are not selling for one reason or many are always worth a look, and I see inventory out there that may be primed to sell right. With a quasi-thaw in our near future, expect some movement in this lake access market and look for some long awaited inventory in the entry level lakefront market.