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  • I'm David Curry, and I sell real estate for Geneva Lakefront Realty in Williams Bay. I write this commentary to help educate and entertain the Lake Geneva home buyer and seller, and unlike the authors of most other real estate blogs, I actually sort of know how to write. And I promise not to RANDOMLY capitalize Words. I write to extol the virtues of the Lake Geneva vacation home, and I have a personal, deep rooted desire to share my experiences and insight with you and ultimately dominate the activity in the Lake Geneva vacation home market. With more than $18MM in 2014 YTD sales and over $90MM in sales since the start of 2010, that goal is easily within reach.

    I will always attempt to back up my opinions with solid statistics and historical perspective. Visiting this site early and often is hands down the best way to learn about this market. Period. Honestly. My full disclosure statement is available here.






  • A lake carries you into recesses of feeling otherwise impenetrable.

    ~William Wordsworth

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    Email David Curry
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Off-Water Upper Bracket Market Update

Sep 19, 2014 by David | Add comment
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A few months ago, or maybe it was only a few weeks ago, a home in Cedar Point sold just a bit under $1.6MM. That's not really a big deal, because Cedar Point has lots of homes that are worth just under $1.6MM. Maybe not lots, but certainly many, as the entry level lakefronts that were $1.2MM two years ago are all certainly in that $1.5MM+ range now. The home that sold was pretty nice, with a bit of a lake view and only a parkway dividing the home from the lake. It had no slip. Over the last twelve months, 5 lakefront homes- the sort with private piers and private frontage- sold for less than $1.585MM. In other words, Parkway homes for $1.585MM are rare.

How rare? Well, like forever rare. As in, since the beginning of time there hasn't been a parkway house sold in the MLS for that much money. Even so, if the buyer liked it and wanted to part with some money to own it, who am I to doubt their move? While they're likely loving life in their new vacation home, it needed to be pointed out that this sale was likely an outlier, and not a trend setter. Though you won't find any macro trend that suggests $1.5MM off water homes in Cedar Point are hot commodities, there's definitely momentum for off-water homes in the $1MM+ range.

I've long said that if we're talking one million bucks, and we're not on the lake, we need to be finding some form of unique arrangement. We need a stellar view, with a stellar house. Or we need a stellar house, with a slip. Or we need a stellar lot, with a slip and maybe a view, and a marginal house- that'll do just fine. The market will generally prefer lakefront, if the price is the same as the off-water offering. That's because private frontage provides freedom that cannot be obtained in an association setting, no matter how small or how lax your association. Just as the entry level lakefront market suffered through a period of low prices from 2010 to 2013, so did the off-water market that falls directly below the lakefront price scale. If entry level lakefront must feel the pain, then high end off-water homes must also be stung.

Today, the most economical true lakefront home on the market is a small lakefront for $1.35MM, followed by my listing on Lakeview for $1.685MM. There's a home in Glenwood Springs in the $1.5s that functions as a lakefront home, but true lakefront isn't all that debatable. If entry level lakefront is currently in that $1.5-1.6MM range, excepting remarkably small or otherwise compromised properties, it stands to reason that the off-water homes at or over $1MM should be faring pretty well. Right? Of course they are, and it isn't just our outlier in Cedar Point Park. Currently, there are no fewer than three off-water homes with list prices great than $1MM pending sale right now. That's a lot, considering the market hasn't had much time for these sorts of homes over recent years.

One home pending is in the exclusive, gated Glen Fern. That's a nice property, with a pool and a boatslip, and while the house may need to be de-1990's-ed, it's a rare property and it deserves a contract. Listed at $1.485MM, it's not a steal, but it's a nice market deal. I'm less thrilled about the other two off-water homes pending in this strata- those at Shore Haven and on LaGrange in Lake Geneva. Both homes are fine, I guess, and both have some views and a slip, so that's nice. The bigger question is, if the entry level market wasn't mostly void of modest offerings in the $1.2-$1.4MM range, would any of these homes be pending sale right now? I don't think so.

The MLS currently offers six lake access homes priced over $1MM. Under $1MM, there are several more in the $900k range. I think the standout in this group is my listing on Main Street in Lake Geneva now listed at $995k. I had a contract on that home that fell through recently, because the buyer may not have wanted to spend weekends poolside, surrounded by elegant luxury. The home doesn't have a slip, but it is impressive nonetheless. It's a rare mix of vintage style with high end fit and finish. It should sell now, not just because it's such an awesome house, but because there's no easy lakefront for a buyer to stretch towards.

Each segment of this market is connected to the segment above and below it, which isn't profound, but it's surprising how many people fail to see these obvious connections. If the entry level lakefront is light on inventory, those segments above and below it should thrive. That's exactly what's happening now around $1MM, so if you're shopping this range, just make sure you're buying smart. Your property should have some elevated amenity- be it view, style, slip, or property. If you'd like to cut to the chase and avoid the mistakes around that price mark, just work with me and we'll avoid them together.

Fall

Sep 17, 2014 by David | Add comment
The boy and his dad. It's sweet, really. The boy isn't so much a boy as he is a man, old enough to be one anyway. He's playing catch with his dad. He's not really good at throwing the football, but who cares? The dad isn't either, with his salted and peppered hair and his sweater. The son has a rugby sweater on, one that no one wears when playing rugby but one that I was always told was a rugby sweater. It's striped, like they're trying to make the son look younger than his apparent 35 years. They do that on television a lot, the making people look younger, even when they don't have to. The football is wobbly in each direction, but they are having a lot of fun. Laughing out loud, fun. They're wearing jeans.

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There are some leaves on the ground, but not piles of them. Those spirals haven't gotten any tighter. The drug the dad is on is fine, I guess. He's now at risk for lymphatic seizure, spontaneous digit separation, and he's very likely going to need a kidney transplant someday soon, but that itching he had on his right ear is gone, so he figures things are looking up. There are risks and rewards, son, and these are the risks for that reward. I think he's talking about his itchy ear, but I can't be sure. It's TV, after all, and no one is particularly sure of anything anymore.

Later, another son and his dad. This time, both are older. They're fishing, with fly fishing rods. They pull up to the stream side, and they're laughing and pointing. Pointing and laughing. The dad isn't well, but he's happy anyway. See, when he wakes up his left eye no longer tears for a few seconds. Sure he has to contend with complete, catastrophic vision loss, right ear deafness, and he can no longer speak when it rains, but if you've ever had a teary left eye upon waking, you know he's better off now. They amble towards the bank, rods rigged, self-assured smiles galore, sweatshirts over their collars, under their fishing vests.

The stream is swift, but not swift enough to hold many trout. The rod is the fly variety, which is why the red and white bobber that they clipped on makes very little sense. The trees are turning, just a slight bit. They aren't brown and red, but they aren't early-summer-green, either. The shoreline is trampled a bit, and it looks like a park of some variety, with regular mowing and trimming. Waders on, flies stuck to their hats, huge grins plastered to their faces, they're now ready to fish. They fling the bobbered line into the water, as if casting spinning rods to bass. This is all wrong, but the joy that it's bringing is worth every production error.

The fish they catch is huge! It is. It's massive. It's a trout, all right, likely one that fell victim to the bobbered night crawler that was cast with a fly rod in spinning rod style. They net it. The smiles! And that, son, is how you do it. The water moves swiftly by without much concern for the fishermen or their quarry. They're going to eat that fish. I'd let it go, but they're going to eat it. Sure the dad, who must be 75, is going to have to blend the fish before drinking it, because Prolavatixam might dry that morning eye up but it has a tendency to cause jaw failure. Still, smiles and sweaters and liquified fish for dinner. There's little that can compare.

Commercials don't teach us much, except when they do. When it's fall, and the weather is perfect, even television people enjoy the outdoors. It's fall-like right now, even if it isn't meteorlogical fall, so let's be like those people on TV and get outside. Oh, and the other thing they're rarely doing is walking in cities. Get thee to the lake and wear a sweater, because if you've taken Spolaxivizatons with any frequency, your life may depend on it.

South Shore Club Heat

Sep 15, 2014 by David | Add comment
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The SSC now has just two developer owned lots left, those at lot 6 and lot 32. Priced at $595k and $649k respectively, they are fair lots and they will sell. If a buyer is contemplating one of those, he or she will be very pleased to know that I just put lot 20 back on the market as a resale. Priced to sell now at $585k, it's a heck of a lot.


Last night, during the early stages of the Bears game, the stages that found them as inept as any football team has ever been, Paul Lee tweeted. He said "Bears replication of Green Bay strategy of letting the opponents zoom ahead early only to lull them to sleep late working perfectly". His tweet was wishful thinking, I thought at the time. Later in the game, when it appeared that the Bears were about to, somehow, pull off a stunning, come from behind victory, the sort that Bears fans like me are used to seeing happen against us, never for us, he retweeted his earlier tweet. He was right, after all, and he wanted to make sure everyone knew it.

That's what I just did up there, with my own words in quotations, again. I didn't do this to be entirely self indulgent, instead I did it to remind everyone why you're supposed to work with the agent you're working with. Because they're awesome at getting back to you, or particularly joyful and bubbly? Or because they predict future market moves correctly a large percentage of the time, and in doing so they protect you from market mistakes? Obviously. So there are my words, written on August 13th of this year. It's about the South Shore Club, and I was pretty sure the SSC was about to continue its hot streak until everything else was ashes. That's exactly what happened.


At the time of that writing, we had those two lots left, and lot 20 had just hit the market. Today, lot 6 is under contract, as is lot 32, and lot 20? Under contract, of course. Now, these deals are contracts and not printed closings, but there's no reason that all three sales do not close in the coming weeks. Why does that matter? If you're a lakefront owner, not in the SSC, does that mean anything at all to you? Is the South Shore Club purely of interest to those in the South Shore Club? Of course this matters to everyone, because our markets are not quarantined, and every movement somewhere causes more movement elsewhere. If the South Shore Club is hot, it matters to everyone who owns or might want to own a vacation home here.

The sale of the house up front for $3.591MM. The pending sale of Fairwyn's spec house on Forest Hill. The lot sales of the past 12 months and the lot sales waiting to print over the next month. All of these things matter. The South Shore Club can, for the first time in its 12 year existence, stand on its own two feet. The market has been established, with ranges operating as they should. For the first time in forever, sellers wishing to sell homes in the SSC within those defined ranges can indeed sell. It's a wonderful thing, and as the agent who was fortunate to be at the head of the class during these past two years, I feel as a proud, protective parent.

The problem with the SSC, say, three years ago, was quite simple to understand. The built homes had never sold in any established pattern, and the lot sales had sputtered to a stop. The absence of liquidity in the built market caused potential vacant land buyers to balk, which, in turn, caused further stagnation. It was an ugly cycle, and when you mix in rumors of foreclosures (some true, others not), there was no way for the club to get a strong enough foothold to take a solid step forward. If you'd like to trace back all of these recent successes of the club, you can point to one sale that turned this whole thing around. That sale was for $3.575MM, of a listing I had on the lakefront of the club at the very East end. That property sold in May of 2012, and it was quickly followed by another sale that I brokered for $1.8MM. From then on, buyers saw enough liquidity to be emboldened, and confidence drives markets far more efficiently than low interest rates ever could.

Today, there is still inventory in the SSC. The developer lots are all spoken for, which will now allow the remaining few unbuilt, but already sold lots to appreciate in value. There are homes for sale, one of mine at $1.895MM, down from a peak list somewhere north of $3.2MM. There's a home next to that one on Forest hill for $1.75MM, and both should attract a buyer yet this year. I'm actually surprised that both are still for sale. There is a foreclosure still in the works inside the club, and rather than damaging pricing, as such a foreclosure would have done back in 2010 or 2011, this one will actually help the club. How so? Well, it'll remove a disinterested owner and install a new, interested owner, and strength in ownership is extremely important in small associations. Things are looking good at that South Shore enclave, and there are many reasons to think things continue to improve and actually start to appreciate. I refuse to say I told you so.

1530 Lakeshore Sells

Sep 12, 2014 by David | Add comment
The problem with being in the real estate business is that if you're doing it all the time you lose sight of pretty much everything else. I can remember days when I woke up and didn't immediately think about houses and deals and clients. I can remember nights when I'd dream deep dreams about fantastical things, before the dreams came where I dream mostly about houses and clients and deals. Last night, I had a vivid dream about a client who was yelling at me. These are the dreams of a real estate veteran.

There was a time when I'd sell a lakefront house and I would be so insanely pleased. In fact, the year I would be engaged to my wife I figured I'd spring for the ring if I sold a lakefront house. I did, for around $900k, back in 2000, and then I was engaged. The lakefront sale then was so elusive that I was willing to pin a most important life decision on the completion of one. Today, as part of this new bread of real estate blindness that has afflicted me, I tend to expect these lakefront sales. And I shouldn't.

Yesterday, I was super happy to represent a buyer in the purchase of his first lake home. There's joy in every lakefront purchase, for every individual or family that bites off such a move. There's joy for a family who has spent many of their years wishing for a lakefront home. These families have spent time in associations or condominiums, close to that lake but never on it. When they muster the financial courage to make the leap, it's a wonderful thing to have a part in the capture of this long deferred dream. But, in the same way, it's a terrific thing when a family who has had little prior experience with this lake comes to these shores and quickly decides that it's right for them.

This is the new buyer of 1530 Lakeshore Drive, in the city of Lake Geneva. For $1.53MM, this young family is now the steward of a blue chip piece of lakefront. There were other properties considered, plenty of them. There was another property that held our focus for a very long time, but yesterday's closing put an end to a couple years of hunting and hope and bitter disappointment. Today, the family begins a new chapter, one that if read properly will be truly transformational. In a good way, not in that governmental campaigny way.

The sweet emotions of the deal aside, and the fact that this sale represented my 26th lakefront transaction side since 2010 (trailing only one agent by only one side for the lakefront lead over that time), there are nuts and bolts and market facts to be considered. $1.53MM for a small piece of lakefront with a nice pier and a very nicely put together house is a pretty good deal, no matter the context. In 2010, when the markets were in very rough shape, this home sold for $1.475MM. To buy that property these improved years later for effectively the same number is a good thing. That tells us we're in line with the market. Remember, if you're buying a house now that sold in 2010 you should be buying it for a price that reflects a slight gain for the owner, but not a huge gain, unless the seller's basis has increased due to renovations.

This sort of property, with 50 feet of level frontage, is a relatively safe place to park money, but is it a future market beater? Can a home like this be fantastically improved to such a point that a future sale will represent a windfall of profits for the owner? I'd say no. I'd say a property like this in a neighborhood like this is always going to be somewhat range bound, and while appreciation fluctuations to the tune of 10-15% may be easily expected, I'd argue that a home like this will always be a $1.5-$1.7MM home. That's because buyers in the $2MM range either want a super nice house on a small lot, or they want a bad house on a better lot. This house should always be a very nice house on a very simple lot, and in that it should always hold the attention of that entry level market. It's a safe play, a stable play, but it isn't a play made with an eye towards a $2MM valuation.

The entry level market inventory is, pure and simple, on the wane. I've been saying this for a few years now, and with every sale it's proving more true. There is limited inventory now, and limited inventory is great for owners and bad for buyers. My modern styled boat house on Lakeview is down to $1.685MM, from a prior ask in the $2.4MM range. Homes that were in this range will ultimately find a buyer, because an entry level buyer is motivated by price first, and by every single other thing second. Expect a few more entry level sales this year, and we'll continue to see that the market that once thrived in the $1.2-$1.35MM range is now going to thrive in the $1.5-$1.65MM range.

A special thanks to the buyer of this new lakefront home. I'm sorry that you bought a house on September 11th, which was, in hindsight, a day after summer died.

Lake Geneva Happenings

Sep 10, 2014 by David | Add comment
There was a time when I could remember things. Back then, if you were to give me your phone number, I wouldn't write it down, at least not right away. I would remember your number, and then later, when I needed to call you, I'd just remember it and call you. Things were so easy back then. If I had appointments, I'd remember those, too. If you told me on Thursday that you'd like to meet me on Saturday, I'd see you on Saturday. I didn't need to write anything down, I simply needed to set a mental reminder and I'd wake up Saturday with you on my mind. In a business sense, of course. This is what it was like back then.

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Today, I have no such memory. I'm not deficient in terms of memorization, but I'm no stand out, either. If you tell me your number, I'll need to write it down immediately. Not a few minutes later, or a few hours later, but like the exact moment you give it to me I'll be writing. Same goes with appointments. If you told me on Saturday morning that you'd like to meet me Saturday afternoon, I'd remember that. But I wouldn't necessarily remember what time we were to meet, so I'd show up at whatever time I remembered, and then I'd be all like, "you're late", because I had no idea exactly when our meeting was to be. This is my problem, but judging from appointment miscues on both sides, I'm betting it's sort of your problem, too.

That's why I offer you this, today. A September guide to all things happening in Lake Geneva. There are other things, of course, but those other things are lame and boring and we're not going to even pretend to remember them. For instance, there is a wine party of some sort going on sometime soon, somewhere near here. I don't drink wine, but I have nonetheless grown tired of all these wine tastings. I feel like they're overkill at this point, because everyone who likes wine tastes it often enough. Want to taste new wines from exciting new regions!? The liquor store can help.

I am hesitant to broadcast too many events that are fall-centric, because I feel that September is mostly summer and very little fall. I feel that way, but my skin over coming days will feel differently. Perhaps we discuss fall now, at least in a brief snippet. The Elegant Farmer is famous for besting Bobby Flay in an apple pie throw down, but probably because Bobby Flay put some sort of pink peppercorn honey drizzle on his pie. I didn't see the episode, but he puts pink peppercorn honey on most things, so I'm betting. The apple pie at the Elegant Farmer (East Troy, about 15 minutes north of Lake Geneva) is really quite good, but there's plenty more to see and eat there. It's good family fun, but a family is not required to gain entry.

The best orchard news of the year comes from the Royal Oak Farm Orchard. That's the one I really like, just south of Walworth a few miles. It's a huge orchard, with a very Royal Oak near the entrance. There's a lot to do here, mostly walking and eating and picking, but before this year you couldn't do those things on Sunday. There's something nice and old fashioned about being closed on Sunday, which is a day for Realtors that falls somewhere in between Thursday and Tuesday, but it doesn't particularly matter much because every day is the same. The orchard, heretofore closed on Sundays, is now open on them. So, if a September Sunday feels particularly brisk and you wish to eat apples, hit up Royal Oak. Don't go to the orchard if it's even remotely hot out, as orchards in the heat are horrible.

September 13th is a good day to visit Flat Iron Park in Lake Geneva. That's the park that isn't Library Park. Lake Geneva Country Meats has been improving their operations and offerings at a furious clip, and they are the presenter for the 5th Annual Taste of Lake Geneva. It's probably worth going to, if you're around. And why wouldn't you be? There's food, probably wine, and the Badger High School Band. That's maybe a deterrent, but I'm betting the Badger band is pretty good. My son's band at Faith Christian? Not so much. Oh, and that same morning there's a TriLock Triathlon in Williams Bay. This is a big deal for Williams Bay, and it's also a big deal if you're planning to drive anywhere on that Saturday. The roads will be full of racing sorts, so be careful. I'll likely finish the Triathlon very early in the morning, just in time to go eat meat at Flat Iron Park.

The best fall weekend to find yourself at Lake Geneva is, without any doubt, the last weekend in September. By then, I can agree it's fall. The Abbey plays host to the Antique and Classic Boat Show that weekend, and it's always worth a visit. Not to play spoiler, but there are lots of old boats there. And there's some food, probably wine, and Haggerty Insurance will be giving away free pens with their logo, but only if you're there early. It's a fun event, with a great atmosphere, and the only thing that can and has spoiled the weekend is poor weather. Even in the rain it's not horrible, mostly because of my one weekend weather rule: Rain in Lake Geneva is vastly superior to rain in Chicago.

Now, before you forget, put those things on your calendar.

Sellers

Sep 08, 2014 by David | Add comment
I spend most of my written capital giving advice to buyers. I tell them when it's a good time to buy, when it's the right house to buy, when they should pay attention. I also tell them when someone bought something right, and I tell them when someone bought something so horribly wrong. As an aside, I should tell you that if I say I don't like something very much, that's code for "I hate it". I tell sellers, too, when they should be in the market, when they should pay attention to pricing, and when they should seize selling opportunities. I do all of these things here, often times hidden between lots of rambling.

One thing I rarely discuss is the business of selling, and more precisely, a sellers relationship with their agent. Over the weekend, I found myself in a familiar position. It's familiar but it isn't necessarily welcome, as I spend a significant portion of my time talking to would be sellers and talking to already sellers. Already sellers are the sort that have a property for sale with Joe Blow Broker, and they're looking for a change. They ask me for a meeting, and I oblige, because I'm that sort of fella.

These sellers ask me, in direct ways that they might not feel comfortable asking their already broker, why isn't their home selling. They ask me what's wrong. They ask me why, given their granite counters and their new paint in the guest bathroom, their home refuses to sell. It's the broker, they assume, and they are, many times, simply looking for validation that someone else can do this job better. While it's true that I'm certain I can represent a buyer's best interests better than anyone else on this earth, and it's true that I can best agents in negotiations with alarming consistency, there is one secret about selling a home that I'm going to share with you now: There is no secret.

I've spent too much of my life trying to convince people to work with me. It's exhausting, really. If I must tell you the truth, this business is a race and it's as competitive as any business ever was. Some listing agents thrive on telling you what they do better, and how they are different. It's true that narratives are unique to individual agents, and sales skills are extremely wide ranging, with some agents possessing lots of selling skills and most others possessing very, very little of that skill. But hey, that agent's mom's hair dresser said they're tops, so that's good enough.

Because I'm a bit jaded, and my form of jade encourages brutal honestly, I can tell you the secrets about listing side representation. I've already told you, as I told that nice seller over the weekend, that there's no secret. No proprietary blend that causes instant selling success, no formula that can be universally applied to yield tremendous results. There is, instead, a process to consider. The first insider's secret is that as long as your agent is proficient, and some form of top producing agent within your market segment, that agent is likely good enough to represent you and your house, and they'll get it sold. But they don't call you back within 45 minutes of leaving them a message? Who cares.

See, brutal honesty. The truth about agents is that the successful ones are pulled in many different directions by equally deserving customers. If you want an agent that specializes in hand holding, that agent will likely not be great at actually selling real estate. As a seller, you have a decision to make. Do you want to work with someone who desperately wants to be your friend, on Facebook and in life, or do you want to work with an agent that's actually really good at selling real estate? They are, generally, not the same person. Do you want an agent that sends you birthday cards or one that sells a ton of real estate?

Outside of the individual sales skills, brokers typically follow very similar paths of advertising and marketing properties. Why do we all do the same thing? Because we know what works, on account of this being our day jobs. So if one agent markets their homes in the Lake Geneva Regional News, and one does not, does that matter to you? Well, maybe check to see which agent sells more real estate in your target market. If the Regional News advertiser sells more, go with them. If they don't sell more, but they list more, because Realtors advertise in local print to attract sellers and not buyers, then go with the agent who is proven by their results, not the quality of their glamor shot.

Lastly, if you're a seller, and you want to sell your property, please don't make your Realtor hate you. While there is cause to believe that beatings may improve morale, I'm here to tell you that they don't. If I have two sellers that I'm working for, and they have similar properties, it stands to reason that I'd like to sell both of them. I'll work to sell both of them. But one seller is kind and pleasant and the other is demanding and rude. Which seller do I feel a great obligation to help? The one who insists that they know more about selling real estate than I do, because they once sold a duplex in Schaumburg AND their mother's home in Boca, or the one who trusts me and knows I'm doing my very best to sell their home? It's rhetorical, as usual.

All that to say, sellers, do your best to list with an agent who has a proven record of proficiency in your individual market segment. If they don't call you every Tuesday just because it's sunny out, don't worry about it. They don't give you feedback right after a showing? Then assume there is no interest and the buyer hated your granite counters and your guest bathroom pain. If they don't send you birthday cards, don't worry a bit about that. They'll sell your house, because that's the goal every single day.

September Schedules

Sep 05, 2014 by David |
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Boating in the summer isn't very difficult. Neither is walking down the shore path in the morning in whichever direction offers you coffee. Sitting in a lawn chair, watching the boats and the waves and the gulls; super easy. Driving to the corn stand on a Saturday afternoon is a cinch, as anyone with a car and a license and six dollars can make it to the stand and leave with a dozen golden ears. Waking on a Sunday morning early to fish or to ski, that isn't all that easy, but it's really not all that difficult either. Lakeside living in the summer is so many different things, but it isn't hard.

Early in the summer, these things are not exactly hard, but they aren't perfectly easy. School runs too late, sports stay too long. Later in summer, it's the same. School starts too early, sports precede the school earliness and make for volleyball practice on sunny August mornings. That's for our enduring shame, but the sporting and school cycles are something we must abide. After all, if little Timmy isn't in pre-pre-season football camp, how on earth is he going to keep up with the kids once it's just regular old pre-season? To say nothing of early season, which is when he'll really be behind. Playoff season? Timmy won't even make the expanded roster. Never mind, really, because your little Timmy is absolutely horrible at football, but his horribleness is ruining your summer, nonetheless.

That's why early summer and late summer are hard, even if the middle of summer is somewhat lazy, and mostly easy. If late summer is hard, those days in August when the fall sports intrude, imagine how hard September is. There are things happening in September. School things, sports things, all sorts of things. If a Saturday in summer involves a city event that has to be accommodated, then that's something that we'll have to make happen. If, however, that Saturday event will be finished by 7 PM, then most times in the summer a family will make their way to the lake immediately after, because Sunday is still Sunday, and Sunday at the lake is so much better than Sunday in Whatever Town, Illinois.

In September, this rush to the lake is not so tangible. There are so many events and scheduling problems, however can we make it to the lake!? I must confess the author of this post is he who has routinely driven 3 hours in one direction in the morning, only to drive those same three hours in the returning direction by evening. I have no problem driving far distances to do something I like to do. I've even driven to the UP to fly fish and made the 11 hour round trip fit inside one 18 hour window. I am not afraid of the drive. That's why if my little Timmy, who is the worst football player in the history of XYZ Junior High, had a game that he won't play in on a Saturday evening, I'd drive my rear end, and the rear ends of the rest of my family, Loser Timmy included, up to the lake. Because while Timmy is just dreadful on the football field, he's really great at diving off white piers.

I write today with the intent of shaming those who own here and let a three hour weekend event ground them for the entirety of the weekend. If Friday night means you must go on the town with your neighborhood friends, that's cool. And if Saturday morning little Kimmy has volleyball practice, that's fine, too. But then what? When the dinner has been eaten and Kimmy has sufficiently proven just how bad she is at the bumping and the setting and particularly the spiking, then what? Well, then we get into the car and drive the short drive North and we play. We play while we still can. Don't want to go boating this Sunday because you think 75 isn't warm enough? How badly we'll wish we could boat inside 75 degree days once we're battling to see a thermometer break 20.

Lake homes are a lot of work, they are. But for most, it isn't the maintenance that bothers them, it's their own lack of persistence in visiting them. I am not saying that juggling schedules isn't difficult work, because I know that it is. I am simply saying that if we wish for the reward, we must put in the work. In this case, work is a short drive, and the reward is a September swim.

Above, my son after school on Wednesday. The dive looks similar to the one in a post below, except that it's a September dive, which makes it better.

Interest Rates

Sep 03, 2014 by DC | Add comment
In the spring of 2012, I bought this ten acre lot. In the spring of 2013, I finished construction on this home, that sits atop the small hill on this ten acre lot. After the lot was bought and the home was built, I refinanced my construction loan into a 30 year fixed rate mortgage. The rate? 3.625%. That's cheap money, no matter how you cut it, and though old timers like my father may prefer to spend every last liquid cent they have in order to not require a loan, and in the process live like an orphaned child in the middle of the great depression, I'm all about indulging the Feds and taking their cheap money as long as they'll give it. Cheap money thrown at bad investments is a bad thing, but cheap money thrown at value? That's pure gold, without the speculative or inflationary pressures...

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I still think there are plenty of lessons to be learned from our last housing cycle, so if you continue to read that I'm talking about peak this or peak that, it's only because there are truths to be found when contrasting the peak to our current position. I think values today are still in line with some off-peak percentage, and I'll continue to use that benchmark as long as I feel like it. Today, I feel like checking back, again. 2007 was probably our peak, though prices paid into 2008 reflect the same insane pricing. If we look at 2007, and we look at 2014, there are similarities. Inventory was somewhat low, and homes that were desirable seemed to sell as long as the price was somewhat tolerable. Value was not necessarily driving the market back then, but it would be hard to say that it's driving most of our market now.

Interest rates today are around 4.15%. That's not quite 3.625% low, but that's insanely low. There has never been a better time to lock in long term rates on housing, unless, of course, we include most of 2013. That was a better time, but today is still good. The rates in 2007 were around 6.25%, which was insanely low if you have been alive for a few decades. When I started selling real estate in 1996 rates were around 8.5%, which was insanely low, given what we know the rates to have been in the early 80s. Insanely low is rather subjectively defined, but the fact that we're a full two points lower now than we were in 2007 means these rates today are absolutely insanely low.

With the term "Insanely Low" now defined, we should look at the printed sales and see just how many of the buyers today are taking advantage of these rates. YTD 2014 we've seen 15 lakefront and lake access homes sell in excess of $1.2MM. The MLS provides a field where the agents are to tell us what sort of financing was involved in the sale- cash, conventional 30, ARM, OTHER, etc. Of the 15 this year, the MLS tells us that 11 of those have printed as cash. That's a whopping 73% of these sales that have been cash. With rates in the low 4s, that's a rather incredible statistic. It effectively says that the quality of buyer who has been buying in 2014 chooses to pay cash just because.

What of 2007? What of this peak year, when rates were a full 50% higher than they are today? That year, there were 19 lakefront and lake access sales over $1.2MM YTD. Of those, just five printed as cash per the MLS. That's just 26% who paid cash for their vacation home, even though the rates were that much higher. It could be that back then buyers were more confident in their ability to generate other investment returns, so they kept their money working for them and financed the vacation home purchase. It could be they were less concerned about financial matters in general, and if money was cheap, which it was relative to its cost just a handful of years prior, why not lock it up? Or, it could simply be that the buyers of 2007 were less capable than are the buyers of today.

Of course that's just my opinion, but the strength of the lakefront buyer is very important to the long term health of this market. If buyer's finance their vacation home purchase, they do so because they've thought it out and have the liquidity to make that work in their overall financial picture. It can be very wise to finance a purchase here, as this cheap money simply cannot be around forever. Why not lock it now and reap the benefits of policy? On the other hand, paying cash allows a buyer to park a chunk of money in an asset that, if bought right today, should easily increase or at least maintain value over time. Whatever a buyer's current move, I think it's obvious that the buyers of 2014 are better positioned for long term success than were the buyers of 2007.

Back To School

Sep 02, 2014 by DC |
I'm old enough now that I don't remember going back to school. I remember it in the high school context, what it was like to wear the new clothes and drive the new 1984 Dodge D100 truck. Those were some days. But the grade school back to school memories elude me. I assume I was shy, because I spent most of my childhood that way. I assume I was nervous, because that's something I was then as I remain now. I remember one year in particular, when a new boy named Jason joined our class. After school my mom said that I wasn't going to be the tallest kid in the class anymore, and she said it as if she was happy for that. I wasn't very tall, really, but Jason was taller and my mom, for some reason, was keen to point that out.

This morning, it's back to school for my kids. Sixth grade for my son and third grade for my daughter. They aren't outwardly nervous this morning, as I think I would have been. They are being kind to each other, which I suppose could be interpreted as nervousness. They are on the same side this morning, the side that finds the two of them heading into a new school year as individuals, in separate classes and separates halls in that small school, but still as a team, as brother and sister. They're still too young to fully understand that it'll be the two of them against the world for the remainder of their lives; still too young to understand that they'll always have each others backs, even when they don't feel like it.

It's sunny out this morning. It's sunny because everyone is going back to school and back to work, unlike yesterday when the day started off crummy, with wind and clouds and bouts of rain. It's sunny today, and it's going to be 80, too. But that doesn't mean it doesn't look like fall, and feel like fall, and that doesn't mean when I drop my kids off this morning and I haven't started the long, slow, death march towards the bitter pale of winter. That's the march we're on, whether we want to be heading in this direction or not, but no matter what inevitability lies ahead, today, it might feel like fall, but it's still summer.

The Twitter was full of nonsense yesterday. Not leaked celebrity photo nonsense, because that was the day before, but nonsense about the end of summer. Bobby Flay said that summer is now over, and he's looking forward to pumpkins and sweaters. Really, Bobby? There are few things I like better than fall, but on that short list, summer is one of them. I can't tell you that I dislike the thought of sweaters and pumpkins, because I own a closet full of one of them and a small patch of the others, but that's why God made October and November. September is as much for pumpkins as November is for Christmas. Each month has a rhythm, and September is for boat rides and swimming. There's a chance that a sweater may be needed on an evening boat ride, so in that, Bobby is correct.

Lake Geneva Lakefront Update

Aug 29, 2014 by DC | Add comment
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Early this year, I wasted a whole bunch of time putting, and then keeping, together a deal on a lakefront listing of mine. After deadlines were met and dates were extended, and after the things that typically happen during a real estate deal happened, then it was all proven an epic waste of time and the deal blew up. This week, a lakefront home in the South Shore Club closed for $3,591,000. You might not think much of that, as it relates to my waste of time farther down that southern shoreline, but the two events were connected. The deal falling through at Loramoor freed up a buyer to pursue what I perceive to be truly bigger and better things. The South Shore Club home sold because the other home did not.

That's a market update, sure, but it's more about marketing than anything. The broker of the SSC home, which was, rather obviously at this point in this post, not me, could have advertised that home all over the place. They could have put an ad in CHINA DAILY. They could have reached those Russian buyers by placing a huge, dimly colored ad in THE MOSCOW POST. They could have spend untold fortunes pulling full page ads and putting on champagne brunches. They could have, as I saw on television this week, invited some exercise company to shoot an exercise video there. For what? To market the home to the broad masses? Why do that when the home sold to a buyer who had a already developed an acute interest in Lake Geneva?

There's a marketing thesis in here somewhere. I might be able to sell a can of Diet Coke to someone who has been suffering along with Diet Pepsi all these years, but can I really sell a $3.5MM house to a buyer who has yet to realize he'd like one? The answer, over my 18 years, is no. I can present a home to a broad buyer base, to blow up my own ego and tend to my personal satisfaction, but does that really sell a home at Lake Geneva? The buyers who buy here are largely buyers who know here. They know what they're looking for, and they know what they'd like to pay. A billboard in Madison for Montana might make a family stop and think... hmmmm.... maybe we should go to Montana. But a full page ad in an expensive magazine doesn't generally result in a family saying....hmmm.... I've never heard of Lake Geneva, but honey grab the checkbook, let's go spend $3.5MM there!

Anyway, the South Shore Club home sold, as I told you it would. It was a heavy house, burdened some by those North Shore finishes from the 2000s that blended french country estate with medieval dungeon, but it was an undeniably nice house. The finishes were superlative, the location within the club as good as it gets. The price range that I defined for the club long before anyone else ever had the confidence to suggest a target has become the norm. $3.5-$4MM for the lakefront homes, a couple in the $3-3.3MM range that border those true lakefronts, $2MM to $2.6MM for the off-water, on-circle homes, and $1.7-$1.85MM for those homes on Forest Hill. Speaking of Forest Hill- I have reduced my listing there down to $1.895MM, which is a heck of a deal. Check the MOSCOW REPUBLICAN for my next ad.

Another lakefront sale this week was in the Birches. If you question which home in the Birches sold, that's a normal condition, because at some point over the past few years it seems as though every home in the Birches as sold. This one was the basic home on the top of that big hill that had been listed over $2MM for some time. It had a contract last year, but failed to close. The asking price then was in excess of two million dollars. The price was adjusted a few times this year, down marginal increments, until it was slashed to $1.55MM. A buyer jumped at it, and there's a new entry level lakefront buyer in a fairly decent lakefront house.

That home proves something about the entry level lakefront market. The days of buying a decent lakefront for $1.2MM are gone, for this cycle anyway. I sold a whole lot of lakefront homes in that price range over the last three years, and all of them have proven to be substantial deals. Now, the entry level still exists in that $1.3MM range, but it exists for bad houses mostly. The better values are those homes that might sell for $1.5MM or so. If I could buy an impaired lakefront for $1.3MM or a decent lakefront for $1.5MM, I don't believe I'd have to tell you what I'd do.

Two lake access homes sold in the last week as well, those being an okay house with a boatslip in Academy Estates for $640k and a vintage spread in Glenwood Springs with a lakeview, a double lot, and a private pier that sold for $730k. I didn't love the Academy house, even though I do love Academy Estates. If you're looking for a Realtor to show you around either the SSC or Academy Estates, consider I'm probably the only Realtor alive who took Driver's Education with the cadets at Northwestern Military Academy, AND played basketball against those cadets in their little, tiny, gym. I took Driver's Ed there with some girls from my school, and if you're imagining the cadets lining up from their dorm rooms and whistling and catcalling those girls, you'd be exactly right. Still, Academy Estates is nice, even if I wasn't involved in that sale.

The lakefront remains active, and though I'm expecting a short lull around this time of year, I haven't really felt that lull yet. There are buyers busily hunting, and sellers positioning their homes for the fall market. Price reductions are common right now, so buyers heading into fall are in a slightly improved position from where they were a month or more ago. It's raining right now, and it's cool outside, and it's also the start of Labor Day Weekend. Be safe at the lake this weekend, and if there's anything at all you feel like buying or selling, just let me know. I'll be busy placing my next ad in the CARACAS DAILY NEWS.