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Lake Geneva Market Update

Lake Geneva Market Update

I was going to write this morning a response to a recent article in the Wall Street Journal. The article, Homeowners Hit The Jackpot, appeared to be, at the headline level, something that might interest me. Then I read the article and deemed it rife with stupidity. How could I respond to something as lame as that article? And so I decided instead to write a market update. Lake Geneva, it’s December. It’s almost time to start talking about the year in the past tense, but if we did that now we’d miss the present. It’s December, and there’s a lot happening. Here’s your Lake Geneva Market Update.

Yesterday, I closed on W4160 Lakeview in Linn Township.  I had that cute little lakefront for sale for what felt like most of my life, but was, in fact, just the last two summers. The house was what you’d expect of an entry level lakefront. 50 feet of frontage, no garage, basic finishes. It was a charming little place, with a boathouse that most estates would like to own. The house was simple, the sales price $1,260,000. The new buyers happy, sure, but not yet certain just how good it will be to own a weekend home on this lake. The seller had owned the house for 11 years and didn’t make any money on it. In that, I failed. But the owner told me yesterday that although the house isn’t the fanciest on the lake, and although the bedrooms are small and the kitchen boasting white appliances, his family looks at that property as the place where the best of their memories were made.  That, after all, is what this whole game is about.

This week I brought to market a lake access home in Shore Haven. It’s a nice house, this Shore Haven place. It has a slight, squinting view of the lake if the leaves are in the right position (on the ground). It also has a two car garage and plenty of parking, attributes which are rare in the lake access world. The house is charming, the finishes nice enough, the layout comfortable with the possibility of attic expansion if someone so desired. But that’s not really the thing that matters with this $749k new listing. What matters is the boat slip. Slips, in the eyes of the wandering market, are all created equal. You either have one or you don’t. If you have one you’re lucky. It you haven’t one you’re sad. You didn’t need one, you said. But above a certain price point off the lake you do need one, because everyone else expects one even if you don’t. That said, this boat slip is fantastic. It’s deep and it’s big and it’s easy to pull in and out of, no matter if a north wind is howling from Williams Bay. Boat slips matter, and this slip that accompanies this house is an absolute gem.

Last week I closed on a Bay Colony condo. I don’t sell a lot of condos anymore, but I sold a ground floor two bedroom in the north building for $415k. That price is significant, as that $415k price is the lowest paid for any unit in either Bay Colony building since at least 2005.  Does the kitchen have a Viking range? Don’t be ridiculous. It might after the remodel, but it doesn’t now, and that’s why I negotiated on behalf of a client and we pushed a $475k asking price to a $415k closing price. Want to buy a condo on the lake? We can go bargain hunting together.

For the remainder of the year we’ll see a few new contracts, but mostly we’ll see the closings of homes that have been placed under contract over recent weeks and months. Lest you think it’s a bad idea to buy a lake house in December, consider the importance and duration of a Lake Geneva summer. If you want to be ready for summer you have to prepare in the winter. It’s December, which means it’s basically winter, and now is the time to start your preparations for the upcoming summer. The summer, not coincidentally, which has the chance to either be the best summer of your life or just another one.

 

Above, the new Shore Haven listing for $749k. 
Go Kart Track

Go Kart Track

You’ve likely already read the article. Lake Geneva Mansions Are Having A Year Crain’s likes to talk about Lake Geneva, but only sometimes. That’s because the Crain family is from Michigan, and so they love Michigan, in the way that some people love their dog even though the dog smells and has bad teeth and fur that’s coarse and smeared with whatever that is it rolled around in last night. Michigan is the favorite, and so I appreciated the time that Dennis Rodkin spent with me discussing the state of the Lake Geneva market. Dennis is the real estate writer for Crain’s, and he couldn’t help but take notice of our robust upper bracket market.  Our market that printed three sales over $5MM this month. Our market that printed six sales over $3.9MM since June. And if he was going to write about this market, he was going to talk to the agent who sold five of those six lakefronts. That’s why we spoke, that’s why the story was written.

But the strength of the market and the three heavy sales this month were just the fluff in the article. The real buried lede was this: If you want future liquidity in your high end Midwestern vacation home, you better buy it in Lake Geneva. That’s all the story needed to say.  Because when Dennis asked an agent from Michigan how their market was doing, he wasn’t regaled with stories of high prints and hefty price tags. He was, instead, met with silence. It seems that Harbor Country doesn’t do so well over $3.5MM. The agent who was questioned found it astounding that Michigan, for all its wonderful somethingness, could fall so far short of Lake Geneva.   When faced with the startling reality that Lake Geneva attracts the wealthy in a way that Michigan can only dream of, she resorted to name calling. But, but, their lake looks like a go-kart-track! This was all she could muster.

And so today, I bring you some snapshots of our go-kart track operations.  For instance, here is a picture of two of our karts.   These are the upper end models that you can only rent if you’re a scion of Chicago business, with a giant building and stadiums named after you, or if you’re a entrepreneur with a go-kart-track-record of immeasurable success:

hinckley

 

Here is a picture of one of our go-kart-track-clubhouses. Coincidentally, I sold this one in September for $9,950,000. In Harbor Country, that number is better known as “four or five of our nicest homes, combined”.

 

Lake Geneva Lakefront Estate

 

Our go-kart-track is unique because we get to observe sunset,  but we also get to observe something else that’s super rare in Harbor Country. Sunrises over water. This picture was snapped on our track during a morning ski session:

 

Geneva Ski

 

The pic below I took after a sunset track run aboard a sailboat. The interesting thing to note here is that we allow our karts to be stored on site, not in a harbor. Want to race right from your own pier? Our track allows this.

 

2016-sail

 

Speaking of piers, this is what they look like. They aren’t docks. When you join our track, you get your own pier. To stand on. To tie karts to. To sunbathe on. To swim from. No sand in your hair here, no dunes to swallow you alive.

 

2016-piers

 

In summary, our track is nice. It’s great for swimming in and racing over. It’s great for sailing and for fishing and for boating and for swimming without fear of a riptide. It’s also wonderful if you ever want liquidity in your vacation home purchase, because unlike Harbor Country, we can actually sell homes for more than $3.5MM. Here’s an aerial view of a small section of track, in case you were considering a whip around the course.

Matt Mason Photography

Aerial Photo courtesy Matt Mason Photography.

 

 

Lake Geneva Appraisals

Lake Geneva Appraisals

You write an offer on a property. You negotiate the offer. You convince the seller to take your counter offer, or the seller convinces you to take his. Your offer was written in a standard fashion, with contingencies for inspections and a new survey and title work. You didn’t write in a financing contingency, because you didn’t really need one, but you did include an appraisal contingency. You know, just to make sure you weren’t over paying. You complete the first few steps of your contract, the inspections went okay. There are some issues, but houses are structures in some continual state of decay, so this is not unexpected. You receive the title and excepting the deed restriction from 1919 that allows the neighbor to observe every other Harvest Moon from your driveway, it’s fine. The last thing to be completed is the appraisal.  What’s taking so long?

The appraiser was out to view the property weeks ago, but the appraisal isn’t yet complete. More comps, she says, she needs more comps. But it’s a Lake Geneva property so comps don’t always exist, which means existing, imperfect comps must be manipulated and adjusted to fit the appraiser’s uniform criteria. Your property has 100′ of frontage, and the comparable on the street has 50′.   The appraiser doesn’t get to double the value of your home as a result. But the appraiser works and works and after a long wait the appraisal comes back. You’re nervous, wondering if you overpaid or secured a fantastic deal. Your contract price on those 100′ is $1,950,000. You open the appraisal and squint, to lesson either the blow to your fragile psyche or to prepare for a most boisterous celebration. The appraised value: $1,950,000.

You’re satisfied, but somewhat disheartened. You thought you had negotiated a better deal than that. You thought the appraisal would come in at $2,000,000, at the very least. But it didn’t and now you’re sad, but you’ll close anyway in spite of your disappointment. Appraisal letdown is real. Appraisal letdown is worse when it kills a deal, but all sorts of appraisal deficiencies are sad.  The problem is they shouldn’t be. And that’s because appraisals are essentially worthless in their ability to predict value. This makes people everywhere rather upset. But I have a $1,500,000 appraisal on my house that you think I should sell for just $1,400,000!!

The American consumer doesn’t understand the appraisal. It doesn’t understand what it really is, how it’s really formulated, and what it really means. The real estate transaction has put so much onus on the appraisal, obviously due to the lender requirements of justifying value for the dollars their about to lend. And in that is the actual truth of the appraisal. It doesn’t come up with a fair market value, it simply seeks to justify the value that it has already been given. An appraisal is about as subjective as a HuffPo editorial. It seeks not to inform, but to use the means as a way to justify the end.  The modern day appraisal is really no different than a rubber stamp of approval, and that’s exactly what it should be.

See, the marketing process of any given property is what actually sets the price. If a home is listed for $2MM and it receives three offers of $2MM within one day of being listed, we are all smart enough to know that the home was worth more than $2MM. If, however, a home is listed for $2.95MM and it doesn’t sell after the first year and then after subsequent price reductions it ultimately sells for $2.25MM, we can assume that the $2.25MM is a fair and accurate, market tested price for that home. When the appraiser comes along, her only job is to coerce that same number out of the comparable properties that have sold in recent months. There’s no fact finding to an appraisal process, no market forecasting. There is only the formulated justification of the price that the market already agreed to. Nothing more, nothing less.

Next time you’re waiting on an appraisal, do me a favor and stay calm. Don’t pin your hopes on it. If it comes in 10% over the price you’re paying, don’t be happy. And assuming your loan isn’t riding on the outcome, if the appraisal comes in at 10% below the price you’re paying, don’t be that upset. The appraisal isn’t there to tell you if you’re paying the right price. It’s there to justify the price you’re paying.

Happy Thanksgiving

Happy Thanksgiving

I’ve written it often. So often, in fact, that it probably doesn’t seem like I’ve written it at all. It’s about perspective, this life of ours. It’s about perspective gained and lost, both usually on the same day, in the same moment, the same circumstance. I admit I lose perspective on a daily basis, and that admission might be the most important admission anyone could ever make. Aside from repentance, I suppose. But perception is the thing that matters most, and the problem with a Lake Geneva real estate focused life is that perspective is easily and often lost.

I saw a young child yesterday, handicapped in a most horrific way. I couldn’t tell how old the girl was, perhaps four, maybe six, but she was handicapped and unable to enjoy anything. Something happened when she was a baby, something terrible, and the consequences of whatever that was have become her life. She will never be dropped off for school, she will never be yelled at for fighting with her brother. Her parents will never feel immeasurable pride when she makes a winning shot in a basketball game she’ll never play.  By her side was her mother, but not her birth mother. The mother who adopted her, the mother who knew full well what she was signing up for. A lifetime as a caregiver to a child who could never repay the favor.

I bought a new chainsaw yesterday. It’s a really great chainsaw. I bought it because my old chainsaw broke, and who could live for so long without a properly functioning, high CC chainsaw? I bought the saw and drove it home and placed it inside the cargo bed of my new Gator. I looked at the set up with tremendous pride. That’s my life. That’s my pathetic, insignificant life. A shiny plastic chainsaw brought me joy, and I hadn’t even yet pulled it to a roaring start.

Today, there’s another closing. Another event to spoil me with rewards that I don’t feel I’ve really earned. Another day where I can focus on the whims of the wealthy, and then buy myself a toy as a treat. What a terrible cycle to be caught up in. What a terrible thing to not see the immeasurable blessings in a life that has been more full than empty. A life that has every chance to be whatever I’d like it to be. A life that finds my wife and children contented and safe, a life where the sacrifices are measured in CCs on a chainsaw. Today, let’s be thankful. Tomorrow, too. Let’s be thankful that we live charmed lives, even when we think they’re anything but. Let’s be thankful that real people, people better than us, adopt children who wouldn’t otherwise be loved. Let’s be thankful for our particular brand of trouble, knowing it’s really nothing at all.

1014 South Lakeshore Sells

1014 South Lakeshore Sells

The most important lakefront home I’ve ever sold is 1014 South Lakeshore Drive in Fontana. I sold that home for the first time in 2010 for $5.885MM. At the time, it was the largest sale I had ever completed, by a factor of at least two. It mattered, this sale, it mattered a whole lot. The fact that I sold the home owned by the owner of our largest local brokerage was something that people noticed, and it helped propel me to the volume that I’ve been pleased to represent since. Last week, I sold that home again. This time for $7,350,000, and as you could imagine, the sale matters this time around as well.

I first listed that home two years ago and received an offer within a few months of the initial listing. That offer didn’t come together, and then the property sat on the market for all of the following year.  The reason it languished for some time is simple: when buyers are looking to spend $7.95MM they are expecting perfection, and any slight blemish that might interrupt that perception is cause for rejection. And so I worked and I worked and then over the summer a new contract, a new scheduled closing date, a new buyer on the line for 1014 South Lakeshore.

In the months that followed there were plenty of ups and downs, other buyers wishing to buy the house came forward, and the house that I couldn’t sell for nearly two years became a house I could have sold two or three times. The market turned, buyers at the higher levels materialized, and 1014 South Lakeshore became a house that was no longer just an expensive house in Fontana. It was THE house in Fontana. Last week it closed, and I remain eternally grateful to the seller who has trusted me with so many lakefront purchases and sales.  Loyalty is a frail thing in real estate, and when a client remains loyal over a fifteen year period that’s a special and unique thing. To that seller I owe much, perhaps a career.

Another sale last week, this one with more intrigue. In November of 2015 pier 514 sold for $3.95MM. It was a nice sale, a good market price for 186 feet of Fontana frontage spread out over 4 acres.  That lakefront just sold again last week, this time for $5.45MM. There is no typo here. There were no improvements done to the house, unlike the sale at 1014 that underwent a supreme facelift and renovation over the years since the 2010 print.  Pier 514 just sold for $1.5MM more than it sold for last year. 12 months, 38% appreciation.  Wow.

So did the market move that much? Of course not. To suggest it did is pure insanity. The market didn’t move more than a few points, but some buyer from somewhere, perhaps a buyer with a penchant for filming Lincoln commercials, that buyer thought $5.45MM was a reasonable ransom for that large property.  Do I think that buyer overpaid? It doesn’t particularly matter, because if a buyer wanted 186′ in Fontana with 4 acres of woods, there were no other options. Personally, I like my sale near Pebble Point with 181′ of frontage and 4 acres for $3.93MM much better, but that’s just me, and I’m value minded.  For the market, it’s a terrific sale, for that buyer turned seller, a magnificent maneuver in a typically stodgy market.

Another week, two more sales, both over $5MM. I wasn’t involved in the lower priced sale, but 2016 has now seen six lakefront properties print over $3.9MM. Of those six, I’ve represented either the buyer or seller in five of them. Those sales have helped push my sales volume over $56,000,000 on the year, and I don’t mention that to be vain. I simply mention that to prove a point. If you’re a lakefront buyer or seller with a Geneva focus, now we both know I’m the guy for you.

Small

Small

When I first drove to the Driftless, I didn’t know what it was, or where it was, or anything else about it. I knew only what I had been told, which was little, except there were streams and in those streams there were trout. I didn’t know how to catch those trout, how to tie tippet to leader, how to swing a streamer or high stick a nymph or splash a hopper. I didn’t know the names of the roads or the names of the streams. I would diligently mark my map to show where I had fished, upstream from X bridge, or downstream “past the pasture fence”. I was so innocent then, so unaware, everything was new. The towns were different; I hadn’t yet figured out they were mostly all the same. The valleys each individual, now one is as the other, except a few, those are still different, somehow.

The region first seemed so large, so present, so varied and so full. There were valleys to explore, hillsides that I hadn’t seen, towns and villages and old tobacco barns that hadn’t yet fallen over, pushed that way by the wind and the rain.  I would follow the map to one stream, fish it, and return home, content but unaware that the next valley over had a stream just like it. I would follow the map to the new spot, fish it, drive home. Each space was new, each valley found me as an explorer, plotting my course, making my notes.  Discovering things that I never knew to look for.

As time passed, the valleys became familiar. The unknown was known. I learned that Jimtown Road was different from Jimtown. I found the streams I like, the ones with rocks and gradient,  as I moved away from the streams filled with sand. I found that 11 inch dark trout with bright orange bellies from the rocky headwaters are superior to their silvery brethren who live downstream, down where the water slows and the sand chokes. I taught myself how to cast the fly, how to slink under barbed wire fences, how to never look a bull in the eye.  I became familiar with those things that were once new. The excitement of the discovery has worn off, and as I drove home the other day I thought of how small the Driftless really is. How each stream is different but the same. How one barn is like another barn, and one small town is the same as all of the others. The region, once a vast wilderness waiting to be explored, has been reduced to a few streams and a few valleys and a few places. The mystery is gone.

My jetski spent September on the shore station and in the water, October on the shore station and only once in the water, and November only on the shore station. The weather has been mild, delicious, yet the jetski sat idle. Winter could be coming soon, but how soon? How can we put away warmer weather things when the weather is still warm? How can we quit when the clock hasn’t even run out? And so the jetski waited, ignored, but with some hope that it might take one last whip. Tuesday was warm,  fifties warm. That’s not warm enough for a wet-suit-less jetski run for most, but for me it was. I had to take the ski out of the water, after all, and if not Tuesday, when?  I hatched a plan to drive the jetski from the shore station to the launch, where a waiting friend would help chauffeur my prized toy to its winter storage spot on the north wall of my attached garage.

The water wasn’t as cold as I expected it to be. My legs tingled only a bit as I stood knee deep and coaxed that two stroke engine to life. The key now was to stay upright, to not fall. This isn’t a waverunner that can be passively captained, this is a Superjet that requires balance and throttle. I set out, satisfied that the engine didn’t stall when I applied the gas, and skittered across the still waters of Williams Bay. The sun was up, the time 3:30 pm, the water cold and calm under my water sled.

A few fishermen were out soaking whatever they had tied to the end of their liens. I rode past them, content in my decision.  I circled to Cedar Point and back to the launch, weaving in and out of the buoys that mark summertime rules.  I zipped over the submerged milk jugs that have been tied to the buoy chains. The signs of winter were everywhere even as I let summer have one last fling. The lake, it seemed to me, is the thing that I have known for the longest. I’ve known it since birth, I’ve been on it and in it and around it nearly every day for my entire life. And yet, on that jetski in the middle of November, I realized I never tire of it. I never find it too familiar. I never think I know it enough to make it feel small. It’s a big lake, after all, bigger than an entire region, bigger than anything else I’ve ever known.

The Rent

The Rent

I’m staring out my office window at an automotive repair shop. This shop just opened, even though the sign says Opening Soon. Will that sign be replaced with a Now Open sign? It’s too early to know, but I’m not going to make a wager of any sort. I don’t know these people, I don’t know that shop. I wish them well, I suppose. The rumble of a diesel engine has been bothering me all morning, it’s coming from that shop. The shop shouldn’t be there, after all, but the Village of Williams Bay wanted something there, anything there. So they let someone build an automotive repair shop even when the town doesn’t need one. I told the village that to allow an automotive repair shop would be a bad idea, I said it wasn’t what the town needs, and it isn’t what the town wants. They didn’t listen.  Opening Soon, the sign is still up.

This sort of thing plagues resort towns everywhere. We need business, but where can we find it? There are only so many coffee shops that one town can have, in fact there are usually too many. Boxed and Burlap is a nice coffee shop in Williams Bay and I’d suggest we needn’t any more. We have two auto repair shops, one pushing out the steady rumble of a diesel engine that is now, at this moment, grating on my nerves and ruining my focus. Opening Soon, I’ll bet. But the business of small town business isn’t easy, and that’s why the Lake Geneva market, in spite of its fabulous vacation home market, struggles to attract, and keep, ideal businesses.

Peet’s Coffee arrived in Lake Geneva a couple of years ago. Peet’s Coffee is now closed. In fact, they closed early this year, or was it last year? I’m not sure, but there’s nothing in that corner space now, nothing but a For Rent sign that tells business owners to call the number for details.  Williams Bay has an empty corner where the Keg Room once offered eggs and toast and nighttime beers. The corner is vacant, still vacant, not even Opening Soon. It’s a nice corner, the one that an Illinois developer thought should host a tenement style condo building. But that development didn’t gain approvals because the Village of Williams Bay is smart, smart enough to keep that corner for something else, something better.  The corner opposite is where I ate french fries off of the plates that came from Charley O’s dining room, the plates that stacked up at my dishwasher station.

I did eat the fries, but not the ones smeared with ketchup. I’d like to think I became a connoisseur of almost eaten fries. Shrimp cocktail, those I’d eat as well. If six shrimp were served on that cocktail sauced glass, why would I not eat the fifth and sixth shrimp that weren’t eaten by he who ordered them?  But enough about my work habits, I was young then, barely 14, and I didn’t like seeing things go to waste. After Charley O sold, the restaurant was the Public House, then The Lighthouse. Then, the Shore Club. They’ve all failed, or been otherwise temporary, and now the building is empty. For Rent it says, across from the For Sale.

The problem here is simple. The real estate is desirable, the locations visible.  The businesses who have occupied these locations were okay. Peet’s served coffee in that marbled space. The Shore Club served a taco trio for $17 or so, and it wasn’t the worst thing even if it was too expensive by half. The problem is, to quote someone who said this once, the rent is too damn high.  You can’t sell burgers for $10 and pay massive rents, especially in a resort market where winter traffic is significant, but less than summer traffic. You cannot sell $3 coffees and pay for all that exposure, when all that exposure still doesn’t equal very many patrons on a Tuesday in January. The rents are simply too damn high.

What’s the fix? Where do we go from here? How do we stop this revolving door in some of our most prominent locations? I don’t know. I’m not a commercial guy. I’m just a residential guy who wishes he could count on the corner restaurant to serve a salad for $11 on Wednesdays in February. For now, I’ll go back to listening to the steady droll of this diesel engine. I think the mechanic has the issue almost solved, but I can’t be certain.

 

Geneva National Market Update

Geneva National Market Update

Every segment of the lake access and lakefront market has activity. If you list a $69k shed in Knollwood, like the one that was listed last week, it’ll sell (and it already did). If you list a $10MM house on Pebble Point, it’ll sell,  assuming you list it with me (and they did and then it did). If you list a house with a slip for $600k, it’ll sell, and a $2MM lakefront tear down? Sold.  Most segments of our non-lake access vacation home segment sell with some regularity as well. A farmette with 10 acres and a neat old barn will sell to a couple from Bucktown who have already grown tired of the 606. A condo at Abbey Hill will sell to someone who wants a Fontana vacation getaway on a budget. Everything sells, no matter what. Unless it’s in Geneva National.

As of this morning, there are 31 available properties within those gated confines listed for more than $500k.  Those are single family homes and traditional condominiums, though obviously the vast majority are of the single home variety. The homes are nice, often possessing fancy appliances and fancy trim, sometimes, usually, at least one gaudy chandelier that screams 2004.  Some of these homes are newer, some are original dinosaurs built in the early and mid 1990s. The thing about homes built in the 1990s is that if they haven’t been substantially renovated, they’re really quite lame.  Geneva National, in spite of an incredible year in the lake access market surrounding Geneva, remains plagued by pockets of heavy inventory.

So far this year there have been just six sales (per MLS) that closed over $500k. It’s mid-November, and without a single pending property in this price range, it’s likely GN ends the year stuck at six.   All of 2015 registered just seven such sales, so six isn’t such a let down, it’s just that it isn’t a market undergoing a solid recovery, it’s a market bogged down by too many sellers thinking this is the time to sell. The numbers are telling us a different story- this isn’t the time to sell.  In 2006 there were 19 sales in GN over $500k, so if you’re looking to sell in this price range, 2006 would be a good place to visit.

But this is unfair, unkind,  and it isn’t the fault of would-be sellers. It’s not the fault of the Realtors. It’s not entirely the fault of golf and its dwindling numbers, even though we’d be foolish to suggest that the decline in golf’s popularity doesn’t have something to do with this. No, this is simply a matter of supply and demand, and Geneva National has, and likely will always have, too much supply. It’s not that the homes there aren’t beautiful, as many are, and it isn’t that the development isn’t one of the most aesthetically pleasing you can find- it is. It’s just that there are too many homes there, and when the built inventory requires more buyers than the market can produce, you’re going to have stagnant prices and tepid demand.

Demand creates demand, this is obvious. More buyers bring more buyers, it’s just the way real estate is. But when you can’t create demand, and you can’t convince a buyer that they had better act soon or they’ll miss out, then what is left? Just a bunch of nice enough houses on nice gated streets. Certain styles of homes will still sell. Those homes that are architecturally unique or otherwise interesting, those will find buyers even now. But the vast majority of homes are going to struggle to find buyers, and that’s exactly what’s been happening over recent years.

I love Geneva National, I really do. I’ve built in GN, remodeled in GN, bought and sold in GN. I enjoy the golf courses immensely. But even in this environment of super low interest rates and broad market demand Geneva National has faltered, and I don’t know what it’ll take to bring it out of its funk.  Sadly, the only fix for Geneva National’s upper bracket housing market is more buyers and I don’t mean seven per year.  Does this slowdown create opportunity? Of course it does, but unfortunately, as long as this inventory remains inflated GN won’t experience a full recovery.

Veteran’s Day

Veteran’s Day

I grew up in Williams Bay.  I remember my older brother wore black in 1992 when Bill Clinton was elected. No one cared that he did that, because he wore black and he went to school and then he went home and he mowed a few lawns. That was his protest. In 2010 when Scott Walker was elected Governor of Wisconsin, I drove to a small bar on the North Shore of Delavan Lake and ate some cheese curds with a friend. This was our celebration. The next day, I woke up and went to work.

This week, a new president.  A peaceful transition of power now underway, in spite of the protests of those whose protest is akin to marching with angry shouts towards the sky, decrying the clouds.  I am optimistic for our country, just as I was optimistic after every presidential election of my adult life. Maybe things will change, maybe they’ll stay the same, maybe the government will spend a little less time in my business and more time letting me go about it. Maybe things will be the better or stay the same, maybe the kids who protest will do as I’ve always done.  Wake up, brush my teeth, shower, and put my head down in hopes of accomplishing something.

Will this election somehow skew our real estate market? Will it turn a good thing bad?  There’s no way to know that, but I cannot see how a free-market thinking president will spoil a solid run in the luxury real estate market. Will there be pause in our markets one of these days? Sure. Would that pause occur no matter who was elected last Tuesday? Of course. For now, I look for a stable stock market, and excepting the after-hours trading Tuesday night,  we’ve had just that. I look for fiscal policy that attempts to reign in spending, and we theoretically have that in aim.  Will some Lake Geneva revelers be sad over this election? Yes. Will some be happy? Yes. Will the water still be clear and the sky blue and the market prized for its remarkable strength? Duh.

This week, two closings. One at Stone Manor. The ground floor unit at Stone Manor, the unit that I first listed two years ago, has closed. The price for all those square feet in that building that Otto Young built? $5.995MM.  I assume that sale is now the most expensive condominium to ever sell in the state of Wisconsin. But that’s an assumption because I don’t particularly care if it is, or it isn’t. It’s a terrific sale for the lake and a terrific sale for the owner of that iconic unit. I was pleased to represent that family in the process.

Another closing, that of my large off-water listing in Loramoor. $1.625MM was the print for that large parcel with boatslip, swimming pool, auxiliary garage, and loads of square footage. That was a rare offering in this market, the unique off-water home that plays like a small estate but still offers the owner lake access and a slip on Geneva. It’s a nice sale, and I was happy to be involved.  As a staggering aside, those sales have pushed my 2016 sales volume to nearly $49MM, a total that represents an all-time annual high for Walworth County. The next closest “competitor” has tallied just over half of that total. It’s humbling and unexpected, and I’m not dumb enough to think I’d be in this strata if not for my clients and customers who trust me with their Lake Geneva moves.  I enjoyed playing the underdog so much I’m not certain how to react to the blessings of this year, but I think I’ll just keep my head down and work.

Finally, Veteran’s Day.  A sincere thank you to every veteran who has ever served. It’s a sacrifice that I didn’t make, and a sacrifice that very few I know have made.  The only sacrifice I made this week was in ordering a John Deere Gator and NOT opting for the front storage rack.  I’m thankful for those who have bled and died so that I can worry about selling condos at Stone Manor, and worry about boatslips and association rules and limited inventory. What a pitiful list of things to worry about. Thank you to our veterans who gave their time and their lives so that college kids can weep in the street and so this kid can pursue his dreams in Williams Bay, Wisconsin.

Pleasant View Sells

Pleasant View Sells

No, this doesn’t mean your cottage with lake access is going to sell for $1.1MM. It doesn’t mean that small cottages with views and private piers are always going to sell quickly and without particular trouble. But it does mean that a perfect cottage in a perfect location with a perfect little pier and a perfect view just might sell. That’s why I closed on 434 Oakwood in Glenwood Springs last week. Because it’s a perfect cottage and perfection will always find a buyer. Congratulations to the new buyer for securing a most unique piece of our vacation home market.

 

 

About Your Agent

About Your Agent

The business of listing homes is a curious one. If we were going about this business of finding a broker and an agent, we’d assume we’d look at our options objectively, hoping to secure the best agent to represent our property. But this isn’t what happens, because real estate isn’t really about results, it’s about friendships and loyalties even when those friendships and loyalties hurt the chance of a sale. I can’t list with this guy because he’s the best, I have to list with this guy because he’s also my son’s baseball coach and my cousin.  Objectivity is for more serious matters, not for real estate, or so it seems.

Every homeowner who is considering a sale knows how to go about searching for the agent that will represent the subject property. It’s typically a mix of internet searching, newspaper perusing, and lastly, checking the refrigerator, assuming it’s not stainless, to see who sent the most recent football calendar. Then, once the list is compiled, it’s time to interview these assorted agents. Some are from large offices, some small offices, some work out of Starbucks, mostly. Some are successful some are sweet, some are your son’s baseball coach who is also your cousin but we know he’s a second cousin, so that’s something to take into consideration.

Once the interviews occur, some agents are smug, some smell, others show up too early or too late. But there’s one agent who showed up on time and had a nice little suit on, and he spoke politely and he drove a car that didn’t have his name tattooed on the passenger and driver side doors. His name was Frank, and he seemed to be a good agent. His firm has some signs around the area, so you know he must be competent. Frank has a nice folder and some really cool brochures with incredible pie charts, also graphs. He has a separate folder, bound with rings, titled “HOW TO SELL YOUR HOUSE”. His picture is on the bottom left of the cover. He’s the one.

He hasn’t necessarily sold a lot of homes in your neighborhood, nor has he sold all that many outside of your neighborhood. But he returns your calls very quickly and he says yes ma’am and no ma’am and that’s enough. He’s hired and the sign goes up, Frank is the man. Your man. The best man, because he wasn’t smug and he wasn’t rude and he wasn’t really upset that your price was super high. He’s a good man, Frank. Things are looking up.

As a homeowner, you’ve done your homework. You vetted his company, you met him in person. You asked him questions. You determined he wasn’t a derelict. You’ve read his blog, “101 THINGS TO DO BEFORE YOUR FIRST OPEN HOUSE”. Frank, for all of these clues, seems to be a fine choice. But there’s one thing in choosing a listing agent that you haven’t yet considered. In fact, no one considers it, yet it’s the single most important factor in choosing representation. Do the other agents think your agent is going to sell your house?

Strange that this would be the question that matters most, right? Not really. It’s not something people talk about, and it’s not written on park benches. But the most important thing in choosing an agent is determining if your agent has credibility amongst the other agents in the market. Note I didn’t say that you agent had to be adored by the other agents, because that’s not it at all. Of course your agent shouldn’t be perceived as one who is difficult to work with, even there are plenty of agents like that. But this is about whether or not other agents think your agent is an effective agent.

The reason this matters is in terms of how quickly other agents will motivate their buyers to see your house. How quickly will they write an offer?  When the listing agent tells the buying agent that there are other interested parties, is your agent one who can be trusted? Not by you, remember, but by the other agents. This is the most important aspect of choosing a listing agent.  Hire the agent who the other agents worry about. Hire the one they know to be effective and clean. Does the market perceive your agent as an agent who is supremely capable of selling your home quickly? If so, hire that guy, or gal. If not,  don’t hire the guy you know because he’s your kids soccer coach. He might not even be your real cousin.

 

W

W

My older brother had, and likely has to this day, the largest Mark Grace baseball card collection ever assembled. I believed the Cubs when they said Jerome Walton was the next greatest thing.  That Shawon Dunston was everything. That Ryne Sandberg was the best second baseman, ever.  That Vance Law needed those glasses. I was too young to know the defeat of 1984. I was too naive to know the playoffs of 1998 weren’t going anywhere. I was too excitable in 2003 and bitter in 2007 and 2008.

I met Harry Caray in the parking lot of Harpoon Willies. He autographed my egg roll receipt from Doc’s and then I promptly lost it. I went to some Cubs games as a kid, but perhaps two, because my dad only took us when someone gave him the tickets. He acted like tickets were only available to the people who knew how to get them, that the tickets were more expensive than anything else. That the tickets were unobtainable for people from Williams Bay. It turns out, the tickets were about $12 and as a huge surprise, the only thing that kept us from summer Cubs games was my fathers unwavering devotion to cheapness, the condition that plagues him to this day and is, at this point, terminal.

I took my son to Cubs games, lots of them. But he was too young to care, to fidgety to watch. We’d leave by the 7th and listen to Santo and Hughes call the win, or more likely, call the loss. I sat in the bleachers, dejected, as the Dodgers swept us from the 2008 playoffs. I sat in the upper deck box feeling similarly defected, while the Dodgers whipped us in game two of the NLCS. I stayed away from the World Series because I couldn’t take the stress, especially given the added stress of the financial commitment. I stayed home and watched.

Game 7, I presume, followed a similar path for most fans. I felt terrific up 5-1, feeling that this was indeed inevitable. Feeling as though I might be let down by a win. Feeling as though I’ve spent 38 years waiting for this, and it would feel strange to wait no longer. At 6-3, I felt less secure, less sure, but still confident. At 6-6 I figured it wasn’t a big deal to lose, because I was still young and this team would be back. It would feel good to languish for a while longer since that’s what I’ve known the longest.  There’s something about waiting till next year, because it’s constant and steady, it’s always there, always something to think about and look forward to.  There was comfort in all that failure. At 8-6 I felt certain again, and at 8-7 I thought of the crushing defeat that was brewing and determined that I was already over it. Next year would be fine. I hadn’t really waited that long, after all.

I can’t say that I cried when they won, because I didn’t. I didn’t think about my dead grandpa who famously was in line at the trough when Andre Dawson hit the only homer during that game we were given free tickets to sometime in the late 1980s. I didn’t regret turning my back on this team when after they tore my heart out in 2003/7/8, I just smiled and decided that it was time. Time, indeed.

 

New Glenwood Springs Listing

New Glenwood Springs Listing

In the world of collector cars, an untouched car with original paint, matching numbers, and original factory features is a very desirable car indeed. The car is valuable because it hasn’t been molested at some point in its long life. It wasn’t repainted in the 1980s, or outfitted with a new engine in the 1990s. It never had new upholstery stitched into it, or an MP-3 player cut into the dash. It’s a perfect example of the intended appearance and function, preserved. The car is worth more not because of what was done to it, but because of what wasn’t done to it.

3-glenwood

640 Linden Avenue in Fontana’s Glenwood Springs doesn’t have a lot of new paint. It doesn’t have a shiny new kitchen and the bathrooms are basic. The house has original wood floors throughout. The screened porch is as built, large and wide and perfect for lounging.  The exterior is still the original stucco, strong and thick, never having been stapled through with the cheap aluminum of the 1960s or the vinyl of the 90s. It’s an original home, with five bedrooms and two bathrooms, with a two car garage and plenty of off-street parking.  The fireplace of cut granite is rare here, like finding the classic car with the fuel injected engine. Sure, we know fireplaces like this exist, but rarely in off-water homes. This home shows its pedigree through two clues- that fireplace and the ample, generous width of the staircase. Two features not common in typical Lake Geneva cottages.

2-glenwood

But this isn’t a typical home, and the location just one home from the lake isn’t typical either. The views, they aren’t typical. And the private, transferrable pier? Well that’s so far from typical that it’s not even fair to mention in the same stanza. That pier isn’t a straight little pier, just able to hold a tied up boat. It’s a traditional H-slip, Lake Geneva style pier. It’s white and it’s big and you’ll love it, assuming you own it. In fact, you’ll love everything about this house, but that will require some motivation on your part. It’s November, sure, but it was 77 yesterday and this house is just available this week, so gather your Lake Geneva summer dreams and drive to the lake. Come see this house with me. For $899k,  it’s a substantial house that the last handful of decades never wrecked, and in that, there’s value.

Gloom

Gloom

Both of my grandmothers are now dead. They’ve both been dead for a while. My Grandma May didn’t complain about much, or if she did she didn’t see fit to complain to her grandson. My Grandma Curry on the other hand, she’d complain about anything to anyone. No friend or stranger was safe.  She’d complain about her diverticulitis, often. If something served for dinner looked good but she couldn’t eat it, the diverticulitis was to blame. She was feeling fine, except the diverticulitis. She had a swollen arm as a result of a long ago mastectomy, for which she wore a compression sleeve, like Allen Iverson.  She would complain about her arm as she swiped at the hanging excess. Her fat arm, she’d say. Everything is fine except for this fat arm and the diverticulitis. And the clouds.

She was also pleasant, happy often, happy for several things but mostly, and most audibly, happy for the sunshine. She loved the sunshine. Her diverticulitis could be acting afoul and her fat arm could be swollen and her compression sleeve pinching, but if the sun were shining then things were just fine. Winter days as cold as they can be were never a concern if the sun was shining. Summer days, no matter how hot, no matter how humid, if sunny they were enthusiastically embraced. On the other hand, if the diverticulitis was in momentary remission and her fat arm wasn’t swollen and her compression sleeve was resting comfortably on the dresser top, and these conditions were accompanied by cloudy skies, then a “how are you, grandma?” was met with a routine and orchestrated, “well, I’m okay, I just wish the sun would come out”. You cannot fault an old woman for liking the sun.

Which means I will give my dead grandmother a pass for hanging her mood on the condition of the sky, but I will not give anyone else a pass. Sunday was a mostly gloomy day at the lake. It was gloomy in the morning and it was misting a bit in the afternoon, and later, after it cracked a tease of sun for a few moments , it was gloomy again. The sun set mostly gloomy, without show or reflection. Night fell and late into the night while we hoped the Cubs would find some conviction, it was gloomy even as our moods lifted. Yes, Sunday was like that, as were days earlier in the week, and days the week before, and this week, though it looks as though it might be sunny more than not, it’ll be gloomy at times and I, for one, love it.

I don’t love the gloom much in July, as July is for sun and for blues and for pastel clothing and deep green trees. But now, at this late date, the fields have gone from green to gold and now to brown and tan, gray and silver.  Life is fading from these fields and from these trees, and while the show will go on for several more weeks, I don’t feel the need to cling to the brightness of mid summer or the intrigue of mid fall. Now I only wish for the quiet gloom of November. I recognize I’m relatively alone in this opinion.

But why should I be? Why should we be as my grandmother and live only for the sunny days? What’s so wrong about a gloomy Sunday where the fire is flickering and the curtains are drawn? What’s so difficult about the gray skies and the brown fields and the way an 8 point buck cruises through the tall, dull grass? Why must we complain so much about the transition? After all, it’s the transition that keeps us sharp. It’s the in between days filled with clouds and drizzle that harden us to the coming cold. It’s the gloom of November that makes the light of summer matter.  So this week and next month,  when the gloom returns, just embrace it and be thankful that your fat arm hasn’t swelled and your diverticulitis isn’t acting up.

 

Geneva Lakefront Market Update

Geneva Lakefront Market Update

The way I see it, any buyer of a lakefront home here has two options. You can buy for now or you can buy for later. If you’re buying for now, you’re buying something that’s done, something that’s ready, something that makes you happy. That’s a house that already has a coffee table where you plan to put a coffee table, and the tile of the kitchen backsplash is the same tile you would have picked if you were the one tasked with the picking. Or, you can buy for later. You can buy because right now you’re not ready to pick the tile, but you are ready to secure your piece of this scene. You’ll be more ready next year, even more ready the year after, but you see what you know you like and you buy it because the property is all that matters. Who would buy a house based on backsplash tile?

Contrary to popular opinion, I do not necessarily prefer one approach over the other. If you can find what you love and it’s done, buy it. If you can’t find what you love, build it. And if you’re ready to buy now, buy now. If you’re ready to buy next year, buy next year. But a particular hybrid of that buyer is the one who knows he can more easily afford to buy next year, but he finds what he loves and he buys now instead. That’s conviction, that’s bold, that’s the sort of buyer I tip my hat to. Also, I think I might start wearing a cowboy hat. It’ll be hard to wear it in an un-ironic way, but if I stick with it I think people will come to appreciate that hat.

The lake this year has had plenty of  buyers, those buying for now, those buying for tomorrow, and those buying now because they don’t think they’ll find the same options tomorrow.  YTD we’ve sold 16 lakefront homes. That’s a very respectable tally, though it falls well short of YTD 2015 which had 23 lakefronts trade by this date. What’s different this year is we have 9 lakefronts pending sale as of this morning. That’s a whole lot of lakefront activity, and it’s wonderful. Last year we added another 7 lakefront closings between 10/26 and 12/31, bringing our total (including Glenwood Springs first-offs and the South Shore Club) to 30 on the year. This  year, it’s more likely that we end up around 27 or 28, but that’s still a most astounding total.

What makes it so incredible is the cycle of lakefront buyers. Typically, one high volume year is followed by a lower volume year, as buyers who buy are not always replaced with more buyers who buy. In my business, if I have a terrific year it’s usually followed by a less terrific year, because I’ve spent through the buyers and sellers that have employed me, and then I must go out and find more smart buyers and smart sellers to hire me.  That’s why the strength of the market in back to back years is far more meaningful than the strength of the market after a down year. In other words, this lakefront market, man, it’s something.

There are two deals pending in the Lake Geneva Highlands, both listed in the $1.3s. One listing is mine, so that’s good. Working up the food chain, I have a new deal on the last remaining Lackey Lane offering, priced at $1.95MM. That’s 100′ of level frontage on a quiet dead end lane, surrounded by $4MM+ homes. What’s not to like? Not coincidentally, if this deal closes in 2016 that will represent the third sale on Lackey of this year, and then I’ll have brought in the buyer for all three sales. Can you tell I like Lackey Lane?  There’s a lakefront home pending on Marianne Terrace in Lake Geneva in the low $2s,  with my listing right next door still available at a similar price. To note, my listing has undergone some nice clean up over recent weeks so if you’ve seen it already and thought it was boring, come back to see it again. It’s better now.

There’s a fresh contract on a lakefront in Cedar Point listed in the $2.4s, that of a double lot. I’m expecting this will be torn down and then we’ll see two homes built on this site. I’m just guessing, but that’s the best use of that property. There’s a new deal on a mid $2s lakefront in the Birches. I’m not a fan of that house, but it’s a big deep lot so it make sense that the market absorbed it. The Sidney Smith new construction in the $3.8s is still pending, as is my large lakefront estate at 1014 South Lakeshore listed in the high $7s. Rounding out the notable pending inventory, my Stone Manor residence listed just under $6 should be closing soon.

If there were supposed to be jitters leading up to this presidential election, I haven’t noticed any. The one thing that does help Lake Geneva during times of distress is our low volume, and our low inventory. We do not have spec activity here that drags on a market as soon as we need to take a pause. As of this morning, there are just 18 true lakefront homes available,  and that’s a shockingly low total. I expect that to remain the case through the Holiday season, which should keep buyers in the market as they search for something new to consider.

Habits

Habits

The magazines are stacked in my den, stacked in my living room, stacked in my office. Some, still, are pushed under the back seats of my cars, those magazines that never made it from mailbox to the inside stacks. These aren’t just fly fishing magazines. Those are there, of course, the ones that I’ve written for and the ones that I haven’t, but it’s not only sporting magazines. It’s the Atlantic and the New Yorker,  it’s home magazines like Dwell and Veranda. It’s any magazine that I thought I might like, because the regular price was $99 but my Preferred Saver’s Rate was just $10.99. $18.99 for two years. And so I fill out the card and the magazines come and then I stack them so that I might read them sometime. I rarely do, but at one point I did, and so now I accumulate for that time the feeling returns.

I bought a white boat with an outboard engine that was never able to shake its drinking and smoking habits. It was a fine boat, it is a fine boat, and for those first few summers I spent so much time on that boat. I would take my son out and we’d fish together, to this day his eyes never shining brighter than when his rod is bent over with a fish tugging at the other end of the line. My daughter and I would go for rides, and she’d hang from the side of the t-top and sign along to the radio, the setting sun reflecting softly off of her smiling face. What a great boat that was, and what great times those were. The boat didn’t make it out of my driveway this year, because my schedule has been too busy, my interests elsewhere. Though today I am filled with regret after thinking of how my children loved those days.

I traded the boat interest for a fly fishing interest, and spent more time wading up skinny Wisconsin creeks than captaining that center console. I fished and I fished,  bragging about the catch, the size and the quantity, reliving the way a trout makes you feel when it sips a seam-riding Caddis.  This is the hobby that led me to buy land, to build new, to attempt to find a place that would be solely mine. Not somewhere I have to share with work,  somewhere I can live uninterrupted by the less important things.  This summer, I didn’t fly fish very much. I wanted to, but I didn’t. And when I did,  my heart wasn’t in it.

My interests tend to run in this pattern. The introduction is a challenge where adequacy is the only initial goal. Then, proficiency and practice, the latter begetting the former, but the pattern continuing, pacing, moving this hobby along from something new to something familiar. The problem is, once this new thing becomes familiar, I find the challenge of success less motivating, and I find that there  must be something else I should try instead. I worry about this pattern in my life. I worry that the things I enjoy now will become the things I put away tomorrow.

But there is, in spite of all of these examples to the contrary, one thing that I continue to look forward to, that continues to delight. It’s a fire on an October night, with the sun lighting up the adjacent corn field and the trees beyond, the first few rolls of smoke from an oak fire. I will never get tired of that, no matter what else I move into and from. I’m careful to not light that fire too early, not on the first cool night of September, and not at the first cool night of October. The first fire is best left for a night that brings with it the chance of frost, because to start a fire too early in the fall is to cheapen it, to steal from it. So the fire is now lit, the ashes this morning smoldering, the first step outside so crisp, so still, with the smell of one of my favorite things still hanging in the air.

 

Photo by Matt Mason Photography, Lake Geneva. 
Already Been Said

Already Been Said

I started to write about how it was 93 and sunny, and how it was always 93 and sunny. It’s 93 and sunny, I was going to say, but it’s going to be the same tomorrow. I was going to write how that would be boring, but I caught myself because I’ve written that bit many times over the last eight years. I’ve written how it would be boring to live in a place where the days were the same, even if the days were perfect. Perfection is tiresome, I was going to say. But I’m not going to say that because I’ve already said it, and how many times can I say that October is fall and November is fall but December is winter, except when it’s still fall?

Then I was thinking of writing an update on the lakefront market here. I was going to tell you what homes are under contract and which ones are about to close. I was going to tell you a bit about some of the complicated deals I’m working on, deals so complicated that I’m weary at 8 am just as I am at 7 pm. But there’s no sympathy in that, because Realtors aren’t necessary nor is their time valuable and if they were smart they’d all become dental hygienists and car salesmen. But I’ve written that already, so I don’t think I’ll talk about it anymore.

I was going to say that peak fall was yesterday, and I was going to tell you that I do hope you enjoyed it. But it’s calm today and the wind isn’t whipping so peak fall will last for the weekend, and you should all be pleased. Especially if you missed yesterday when fall peaked. But you knew it wasn’t really peak fall because you’ve been reading this for eight years and you know I have a tendency to shame you into visiting the lake on weekdays. I was doing it again, and you knew it, so I won’t mention it from here on out.

I could have written about how terrific it’ll be when it’s winter, because then I can go skiing with my son. My daughter won’t ski anymore because she broke her leg skiing last April, but I won’t say much more because you already knew that. You knew it last April, the day after it happened. Yesterday I was at the American Club with my wife. My wife doesn’t really like it when I take her on fancy getaways to fancy places, but you already knew that, too. You know how I feel about Kohler, how it’s all fake, how I’m only Truman when I’m there.  You know the fall colors there are like the colors here, except here they’re better. You know I don’t understand that town, and I don’t understand the low ceilings and I don’t understand why the people in the room above ours had to get ready to leave the resort so early yesterday morning.

At this point in our relationship, there’s very little you don’t know. You know that I’m busy and that the market is quite healthy. You know that I’m worried about inventory and I’m worried about the deals that I’m working on that feel as though they’ll only close once I’m dead. You know I had nothing to write about this morning so I wrote this.  And I’m sure you know I hope something interesting happens over the weekend so that I have something to write about. I’d write about the Cubs this morning, but I’ve already written about them.

Lake Geneva Fall Colors

Lake Geneva Fall Colors

I visited Chicago on Sunday to watch the Cubs do what the Cubs have done best for the entirety of my life: lose.  But before they lost and before I drove home and before I found my bed at 1 am, I drove down a Lincoln Park street to meet up with the client who witnessed the inept bats with me. The street was unlike other streets, as it was barely fall on the route I took to his house. But when I turned onto his street it was instant fall. Leaves littered the sidewalk and the covered the curb. The storm drains were clogged with yellow and orange leaves. It was fall, immediately and undeniably, fall.  This morning, I drove to Stone Manor as I prepare to close on that large sale next month, and I was struck by fall. It’s not becoming fall, it’s not going to be fall, it didn’t used to be fall, it’s just fall, and it’s right now and it’s glorious.

Early fall is easily mistaken for summer. Late fall  looks like winter, because winter is just late fall with some snow. But the middle of fall in Wisconsin is something that can’t be missed. It shouldn’t be missed. And it can’t be taken in on one street in Lincoln Park, or by gazing up to three maple trees in Oz Park as they turn brilliant and bright.  It isn’t even all of Wisconsin where this spectacle can be measured. I’m building that fishing cabin in the Western part of this state, and while the hills are nice the fall there is no spectacle at all. It’s just a dulling and a browning that follows a brief yellowing. They have lots of trees there, all sorts and sizes and densities, but Maples are not as common there as they are here. It’s the Maple that makes fall in Lake Geneva.  That’s because I hate to break it to you, but we have all the Maples.

I write today to pull away the mystery of fall. When should you visit? When is peak fall? Is it coming soon? Is it later, like next Thursday? Or is it right smack exactly tomorrow?  Of course it’s tomorrow. Tomorrow is the peak. Not early tomorrow, but late tomorrow, say, 3:30 pm. That’s peak fall at Lake Geneva, and you should be here for it.  I generally dislike the tour boats on Geneva. I dislike the Lady of Lake, because that stupid paddle wheel doesn’t turn at the same rate as the boat is traveling. The wheel is paddling at 3 miles per hour while the boat cruises at 10. I’m no engineer, but this strikes me as something amiss. And that boat is only outdone in its foolishness by that Mississippi river boat looking thing that looks as though it might tip over at any time. The wheel on that boat moves even slower, looking even more ridiculous, as that wheel pushes at 1 MPH while that awkward boat shoves through the water at 10 MPH. I dislike those boats immensely. But if there’s a time to jump aboard and play tourist, it’s during peak fall, because your boat might already be put away in its winter home on account of you being a quitter.

If you can’t come up this Thursday at 3:30 pm for the peak of fall, then come up this weekend. It’ll be the next best thing. The winds have calmed, and hopefully they’ll stay calm for a few more days so that we might enjoy this fall spectacle. Don’t bother driving to some other place, like  Michigan (Michstakegan), or Galena (absurd), or Door County (they’re closed), just drive here. Because we’re going to peak this weekend and we have all the maples. We also have incredible houses to look at and buy, and we have espresso and pumpkins and apples.   Please don’t sit in the city this weekend and pretend everything is okay. It isn’t. It’s never okay. Come to Wisconsin, specifically to Lake Geneva, because the fall we wait all year for is happening this weekend. If you stay home, you’re going to miss it, and that’s unacceptable.

Temptation

Temptation

As I understand it, Door County is a place where you go because you want to eat cherries while spending the better part of a full day searching for a place that will serve you a proper espresso.  Door County is also a place where lake access doesn’t mean the same thing that it means here. That’s because the lake isn’t really a lake at all, rather it’s an inland ocean, which is beautiful to look at but also mostly unusable for the typical weekend warrior. The lake is different, the market is different, the cherries are good, the espresso absent. This is all you need to know about Door County.  You’re welcome.

The market here is very unique, as lake access or lake rights really means something. For years I’ve heard sellers explain to me the reasons that lake rights don’t matter. Coincidentally, the only sellers that undertake this attempted explanation are those that own homes that lack the attribute. They’ll opine how lake access isn’t important because of beaches, and because of launches, and because of parks and restaurants. They’ll work to convince me that they’re right, all the while we both know they’re wrong.

That’s because no amount of dialogue, no matter how impassioned, can change generations of market behavior. The market expects lake access, it wants lake access, and when someone emails me this week and wants to buy a vacation home at Lake Geneva, they’re probably going to ask me about lake access. Once they ask me, I’m going to tell them that they need it. In doing so, I’m furthering the generational standard, leaving very little room for wavering. If you’re looking Lake Geneva, you should be looking lake access.

When the market was hot, buyers moved away from this standard. They’d buy homes on Anystreet, Williams Bay, because of the beach and the launch and the restaurants. They’d buy a home on Oakwood Street because it’s a nice enough street, and they could pay $180k for a house that would have cost $319k in Cedar Point Park. I understand the economics of a non-lake access purchase, I really do, which is why there should be a discount paid for homes that are in otherwise boring locations that lack lake access. If you’re contemplating a vacation home purchase here, your vacation home should be surrounded by other vacation homes. It’s really that simple.

Now that the market is warmer again, buyers are returning to their old discount-seeking ways. The house in Cedar Point is $289k now, and the house on Oakwood is still $180k, so Oakwood wins. If that’s all your budget will allow, I completely and entirely understand the reason you’d entertain Oakwood. I honestly do. But if the budget allows for the $289k, please go that route. Not because I want your Realtor, who should actually be me, to make more money, but because I want your future appreciation tied to the vacation home market, not to the primary market.

There are exceptions to this rule of mine. Unique homes in special locations, those get a pass. Unique lots- oversized or featuring some sort of special view- I’ll let those slide as well. But if we’re buying a normal house on a normal in-town street, let’s first exhaust our lake access options.  Because once you buy that non-lake access house in town you’re pretty much going to spend every day from then on wishing you had a private association pier to hang out at. And if you’re not going to have a private association pier to hang out at, you might as well keep driving for another day and end up in Door County. It’s BYOEspresso, just so you know.

 

PS. I was at the Cub game last night, which means it is likely my fault that they lost. 

Steady

Steady

Anxiety is a common affliction in the real estate world. Those not living in this world cannot fathom what might be so difficult about making buckets full of money while doing very little actual work. Those in the industry, and those who were driven from the industry from the anxiety, know this business to be different. My brother works in a factory of sorts. He sits somewhere and punches in some orders onto a computer screen, and then a robot does those things that he’s told it to do. It’s a nice thing to have the robot do that work, and when he drives home at night be doesn’t wonder about what might happen if the robot doesn’t work tomorrow. He doesn’t worry that the CFO just found out the new orders from that large new company have been canceled. He just gets up early and goes to work the next morning and sits on his chair and punches in the commands that the robot will follow. The anxiety of real estate is different, and it’s more intense and more troubling than anyone who hasn’t sat in my particular chair could understand.

But this particular chair does not own me, and so I sit in it for a while in the morning and then again for a bit in the afternoon. I drive around the lake, I drive down this road and down your road. I look at houses and I look at land and I look at views and I look for what it is that you’re hoping I might find. That traveling seat is far more interesting than this creaky seat that I pull up to this long desk in the morning. That moving seat helps with the stress of a day, and that seat gives me a glimpse of the lake that I’ve seen nearly every day for the entirety of my life.

Admittedly, there are views of this lake that I prefer over others. A fall view from the tip of Cedar Point, where Circle Parkway makes its most pronounced curve, that view to the West through the fall trees as they drop a storm of yellow and orange leaves; now that’s a view. It’s different up there. The lake looks different from that height, like something you can see but can’t touch, like something on a horizon that you’ll never catch. You can chase it from up there, and watch the waves from above, where the rise and fall isn’t visible but for the foamy white of the break.

Downtown Lake Geneva on an October Tuesday must look different in the minds and imaginations of the summer visitors, those who fill up on summer over a few weekends and then look back to their desks and not to the water again until the next June. But I see downtown on a Tuesday in October I know it looks like it should, I know it looks like July with a brighter leaves. I know the breeze blows the same off the lake but it’s cooling now, not warming, and I know the outdoor diners are still dining and they’re still toasting to this place, to this scene, to that view.

In the summer when it storms, I can’t know the severity or the angle of the storm until I see it from the shore, over that lake. I know then where it’s coming from, where the wind is blowing, and how bad it might be. I know the clouds and the way they twist and push and form those summer shelves. I can see rain and clouds from these office windows, and from the windows of my house, but I can’t see the detail until I’m looking over the water. It’s impossible to tell just what’s going on without that view.

Today, I see the leaves on the trees across the street, and I see the leaves yellowing and falling, more and more each day.  Because of this I know it’s fall, and I know the colors are starting, but that’s about the extent of my knowledge. I won’t be able to know just how widespread these colors are until I’m driving through Williams Bay, past that launch and I look to the south and the east and the west.  Fall can sneak up on you, but not when you’re watching the colors change across the lake. It’s obvious then, and when I saw the Snake Road foliage from Big Foot Beach yesterday I knew that fall was no longer waiting. It’s here, and it’s bright and the colors are orange and yellow and red. I know this now because I saw it across that lake. In a life filled with twists and turns and the anxiety that this morning chair brings, that lake and those views are always there and they’re always steady and they will always catch my eye.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

This time of year the Lake Geneva real estate market will do one of two things. It will either push slowly and methodically to the end of the year, or it will remain as active as it has been for much of the past several months. Under the first scenario, it’s just a tidying up of the closings on properties that are already under contract, inching inevitably closer towards December 31st. The market will calm, fresh deals will be fewer and far between, and we’ll focus our attention on closing out what will prove to be the best year ever for the upper bracket lakefront market. The alternative course is that we add some new inventory over the next few weeks and that inventory is met with buyer interest. If that occurs, we’ll also likely see a push on some of the aged inventory that has been clogging the market for most of this year. New inventory that sells quickly helps aged inventory simply because it shows buyers that time is, likely, of the essence.

It’s early fall here, but it’s late fall for the real estate market. We have plenty of time left of active selling season, as I’d just as easily sell a lakefront in October as in June. The serious buyers will remain engaged throughout the change of seasons, those who understand that this search should not be taken lightly nor should it be considered over just because the leaves have begun to change.  But the summer buyers who operate on whim and fancy, those buyers will slowly drop off as the temperatures cool and the leaves dull and fall. November, now that’s a month for the serious buyer. Things are brown, and the things that aren’t brown are gray. Daylight is limited, sunshine, too. The buyers that remain through October and last into November are the real buyers, and I think there are more of them in the market today than I’ve seen in a long time.

The issue today is inventory, as we only have 22 true lakefront homes available as of this morning.  We haven’t seen much by way of new product this fall, and the two of the three new lakefronts that have hit the market recently sold immediately (Lakeview, $1.3s, Sidney Smith, $3.8s). I continue to expect new lakefront inventory to come to market, but I continue to be disappointed with each passing day. In February, it’s no big deal when a week passes without fresh inventory, because the next week will be better and the week after might be March. But in October, the next week might also be quiet and the week after might be November.  Lakefront properties have been listed between Thanksgiving and Christmas, but that’s a rare seller who decides to present to the market during that traditionally slow market. Still, if a seller is paying attention to the limited inventory she would do well to list into that environment, no matter what the calendar says.

Today there are several lakefronts pending sale. There’s the entry level on Lakeview that I mentioned earlier, and there’s the Marianne Terrace listing in the low $2s. That’s right next door to my listing that’s offered at a similar price. Shamefully, I haven’t sold my listing yet. The new listing on Sidney Smith of a home under construction sold quickly, and that sale is a very important data point for buyers looking to build new. That property sold for $1.925MM in 2015, and the seller began construction on a new home just a couple of months ago. That home was new, but it struck me as being rather basic as presented to the market, yet it sold and it sold quickly.  For buyers considering new construction projects, this is a reminder that the market is quite liquid for newer construction on reasonably nice lots (100 or so feet of frontage) priced below $4.5MM. This is a segment of the market that wasn’t particularly tested until this year, and it’s now obvious that buyers will gravitate towards new construction in this price range.  Lastly, my lakefront for $7.95MM in Fontana is pending sale.

So which scenario do think will play out? Will there be new inventory that will be excitedly gobbled up by the market? Or will the market slow as a result of stale inventory? I think it’s likely the latter, but I also know that as soon as you count this market out and expect it to sleep for a few months, it has a tendency to surprise. Still, expect a normalized market as we head into fall. Buyers will revisit aged inventory one last time, and they’ll be ready to pounce if any interesting new inventory presents itself as we move towards winter.

Car Shopping

Car Shopping

I need a new car. My car is older now, though if you saw it just after a washing and you were standing some slight distance from it you’d be forgiven for thinking that I have a very nice car. It looks nice in photos, that’s for sure. But when I turn the wheel the car clicks, which is a sound that I haven’t had a car make since I was 17 and my car was that gray Saab. That car clicked around corners as well, but things were different then so the clicking didn’t matter because when I turned the radio up the clicking stopped. My car clicks and I could have the click fixed, but it seems like the car is prepared to let something else start clicking or thumping or chirping once I fix the current click. That lake house you looked at has an ugly kitchen and the guest bedrooms are so small.

My car has been my car for several years, for long enough that it seems like I could use a newer one. I can’t buy a new one, because I don’t have that in me. I don’t have the stomach for new car prices, for the stickers in the windows, for the salesmen that think there’s nothing difficult about buying a new car for elevated sums of money. I don’t like the snack bars, the magazines, the modern coffee tables. I don’t like the way the deal doesn’t really start until you sit at the little formica desk and the salesman starts punching in the numbers, picking through the keyboard with his index fingers until he finds the right combination of numbers and letters. I don’t like it when he turns the screen to face me and the numbers look nothing like they did in the window. That lake house is expensive, because taxes and dues and sprinkler systems.

There are lots of cars on that lot, not just the ones in the showroom that look so wonderfully shiny. Years ago, I had a customer drive to a showing in a very white luxury sedan. The car was beautiful, but it was extremely white, and it had rained earlier that day and so his car was white with scatters of road dirt, like an abstract painting that I wouldn’t understand. We talked for a while about his white car, and after some time he admitted that he shouldn’t have bought a white sedan. In fact, he didn’t know why he’d ever buy a white sedan, except that he then resigned himself to the reason. It just looked stunning under those showroom lights. Indeed it must have, but in that driveway on that day that it had rained it just looked like a white car that needed to be washed. The lake house on a sunny summer afternoon when the water shimmered blue and the hydrangeas bloomed white couldn’t have looked more perfect if it tried.

There are cars to buy, but the car must be heavy because I’d like to gain the tax advantage from that heavier car. Needing a heavy car means the choices are limited, because a lighter car might be nice and it will treat tires with more respect but it won’t get me that deduction. Heavy cars are numerous, but I’ve been down the road of a fancy car and I see how the fancy cars wear after some time. That is to say they wear terribly, no matter what engineers we claim to be the best, no matter which country of origin has the finest craftsman, cars are cars and they break. When the expensive ones break because your warranty recently ran out, it no longer matters how nice the car looks after a wash, when the sun is low and the lights are on. So I’m on the hunt for a reasonably nice car that’s heavy, but not one that’s so nice that it’s going to break down and leave me on the side of some country road wishing for a car that favored function over form. You can find a lake house of superior style a long ways from the lake, or you can find one that’s sturdy and near, even if it isn’t all that sexy.

I’m looking for something that will get me from A to B, and won’t break somewhere between the span. But as I look I realize I don’t like cars anymore, or rather I have the same problem that I’ve always had of not liking the cars that I can afford, or liking cars that know I shouldn’t own. I should buy something, and soon, because winter is coming and the clicking won’t stop just because it’s cold. The clicking might even get worse, since it could progress from a click to a dreaded thump. Today I’ll think a bit about this process and about what I should do, and I’ll think about how my car search is like your lake house search, and how we’re both just trying to accomplish something that we’ve been thinking about for a long time.

Regrets

Regrets

I like to brag about certain things. For instance, I have a black SuperJet and there’s very little chance that you do as well. I have one, you don’t. It’s not that I’m better than you, but my SuperJet is better than yours, because you don’t even have one, which is embarrassing. For you, not for me, because my SuperJet is black and it’s custom, because it has an Uff Da sticker on it, which is something that only makes sense if your grandmother spoke some gibberish that she insisted was Norwegian. See, I’m bragging now, and there’s very little you can do about it.  Ah, but you say that it’s October and what good does a SuperJet do a Wisconsin boy in October?  Even that statement proves your SuperJet inferiority, because October is to SuperJetting what April is to showers. See? Bragging.

But I don’t intend to brag when I speak of my past personal real estate dealings. I don’t brag about profit or of market beating performance, though it has dawned on me that some of my anecdotal housing stories might be construed as less than humble tales. If you went to a foot doctor because you had something wrong with your foot, would you prefer the doctor tell you about what he learned in books, or would you prefer he tell you that last week he handled this same condition and fixed it? In fact, he saw the same condition three months ago and three years ago and he fixed those, too. Personal experience should lend some credibility to the expected outcome.

Back to those personal dealings of mine, they all have one common theme. No matter the house, no matter the price, no matter my personal confidence of lack thereof in the housing market, I have always left the closing table feeling as though I sold for too little. Buyers regret is a common affliction, in fact I also suffer from that each time I buy something, but that’s not specific to housing- I feel regret when I buy anything, including when I order a chicken wrap and everyone knows I should have ordered the brisket. But seller regret is just as real, and I’ve felt it each and every time I’ve been the one signing the deed. I left money on the table, I sold too cheap, I blew it. That’s how I feel  after every personal sale. Deflated, poor, taken.

The thing is, each personal deal I’ve closed is just a distant memory. They mean nothing to my life today. I look back at the progression of housing, to the first purchase and to the last one, and I think of how I caved in one way or another. I caved on the buy, and then I caved on the sale, I’m a professional caver, the farthest thing from shrewd, a sucker, really. But that’s how people who like to over think real estate might feel, that’s not how I feel. Because today I’m not holding any house that I no longer wish to own. I’m not stuck with a property that doesn’t serve a purpose in my life. I’m not beholden to something that erodes my personal finances just because I was unwilling to give in to a buyer’s last minute demands of a $1000 credit. I’m not stuck at my station because I couldn’t get that last 3% that I desperately wanted out of the buyer. I’m here now because I let the 3% go, because I know that moving forward is far more valuable than getting stuck.

Stop getting stuck. If you’re a seller, and a buyer won’t pay your “bottom” number, don’t be so stubborn. Meet the bid and move on. Often times a seller here is selling because she’s buying more house, or he’s buying less house, but he’s not removing himself from the market entirely. It’s just movement, up or down, but still here. And so owners buyer something new, hanging on to what they already own, because they don’t need to sell it. I can hold this forever, they say.  Never mind the financial bleed of an unnecessary, uninterested carry,  consider instead the emotional drain that accompanies this sort of prolonged ownership. When you wake up, do you think only about your new house and your job and your spouse and your children and that achy left hip, or do you think also of that house that you used to live in that you still own? It’s there, decaying, eating away at your finances and your mental-health. It’s there with you at all times,  serving no purpose, stuck in your thoughts.

This is why there is regret in real estate. Regret on the buy side, regret on the sale side. Did you sell your last home for too little? Did you end up taking the first offer and later beat yourself up for selling too quickly, for too little? Good, because I probably did the same, but here we both are, worrying about today and thinking about tomorrow, forgetting about yesterday and the houses we used to own.

October Drive

October Drive

The Saab 900 was gunmetal gray. The roads were straight, the path clear. North. That’s all I needed to do, bearing East when possible, but mostly just North. The Saab had a top speed that I never discovered. The rattle and wobble at 70 made sure that the higher numbers on the speedometer wouldn’t be touched. The roads were gray, the sky gray, the trees browned and grayed, the clouds gray. The lights dim, everywhere dim. The lake, that big lake to the East was gray, the water and the shore and the clouds and the space between, gray. It was late fall, I was 18 and I drove into the night.

On a typical trip to some other place, the route is dark and confusing and the turns many  but the destination, once it comes into view, is clear and bright, welcoming a weary traveler to the place where he intended to be. The traveler finds his destination and the troubles of the trip are forgotten, the wrong turns now merely a laughable memory because the journey is complete and the place he finds himself is perfect.  Instead, I drove the tired hatchback down slippery roads, soaked with rain and trampled leaves that had been ground into a paste on these county roads. I drove not knowing where I was going, not knowing what I was searching for.  The Pinkerton album my misfitted soundtrack.

A Vacancy sign was all I needed to see, and after some time I had been seeing nothing but. Vacancy, they’d all say, the NO distinctly quiet and dark, like the woods on these roads and the rain that fell and the paste that clung to my balding tires. The I didn’t want to commit to any particular lodging option until I had driven past many of them, each one darker and dimmer and more unwelcoming than the last. After some time of this I decided that one was as good as another, and I pulled in to a small cabin that looked like a house, with a car out front and a lamp lighting the window. The pull chain light flashed Vacancy.

The older woman was kind enough, and I exchanged some money for a key and a map to the cabin that would be home for as long as I decided it should be. If it was dark on the road, and dark in front of the cabin office, then it was positively pitch but the time I found my way down the leaf soaked path to the cabin. I don’t remember if the cabin had a name, like the  Chipmunk House, or if it just had a number, like Cabin 3, or a letter, like B. I found the cabin and went inside, the rain intensifying, the darkness finding its way darker still.

It wasn’t scary in the cabin, but it wasn’t not scary, either.  It smelled like wet dust, like any cabin would smell after the first rain of spring, after a long time of sitting empty over a long, cold winter. But this was fall, not winter, and so it smelled anyway and I left my bag on the bed and drove towards town to find something to eat. The town greeted me in the same manner as the county did, in the same way as the cabin office did, in the same way that the cabin did. It was dark in town,  a few cars offering the only movement, the only thing open a small gas station with two pumps, pay inside, cash only. I bought a cardboard wrapped pizza, first estimating its size to determine if it would fit inside the narrow oven at the cabin. A two liter of pop rounded out the order. The man at the register looked at me like any man at any register has ever looked at a single traveler who appears lost and confused, whose clothes and hair were soaked from the dark rain, who looked as though he didn’t belong there.

I couldn’t just drive back to the cabin at this point, because the TV was small and the pizza would only offer a few minutes of distraction, and so I drove down to the shore to look at the water. That’s why I was there, after all, to fish for the salmon that should have been running in such great numbers that even me, a kid from another place who drove there only on a whim, with some cash and a new CD and a wobbly gunmetal gray car. I pulled up to the harbor, to look out between the swipes of the wipers, to see the water whipped and the waves crashing. There were no fishermen there. Just me, in my car with my pizza and a fishing pole. I wasn’t sure what I had expected, but this wasn’t it. This looked intimidating, unappealing, difficult. I ate the pizza on my bed and tried to ignore the wind that felt like it might knock the cabin down and bury me in a pile of dusty rubble in a county where I shouldn’t have been.

The next day, the water was high, the sky gray, the town as empty as it was the night before. I kicked some leaves down the sidewalk in town, looking like a lost tourist who showed up the day after everyone else left. The restaurants had signs, THANKS FOR ANOTHER GREAT YEAR, even though I knew they didn’t mean it.  If the year was so great there would have been some money left over to fix the awning that was tearing at both ends, mildewing so heavily that I wasn’t sure what color, exactly, the fabric was supposed to be. The river that I wanted to fish was wide and muddy. Even if there had been fish in it I wouldn’t have been able to catch them, and since I didn’t see them it didn’t make any sense to me to fish for something I wasn’t sure existed. I had missed the run and I had missed their fall, I figured, and that’s why no one was here. I shuffled through town for the remainder of that day and drove home before the night fell.  It was October and I had missed what I had driven so far to find.

Today, it’s bright and the leaves are green, except the few that are yellowing and the others that are turning to red. Mostly, it’s still summer here, even though the temperature disagrees. It’s early enough that you still have time. You won’t miss fall here if you visit this month, but if you show up later in the month I assure you the lights will still be on. We’ll still be here, because it’s Lake Geneva and we don’t look at October as the end of anything. It’s just the start of another season, and like all of the other seasons, it’s one that should find you here.

Market Timing

Market Timing

Earlier this year, I wrote an email to an owner of vacant lot. I told him should be be interested in selling, there was a likely premium awaiting him. He hadn’t bought the property too long ago, but the market had been looking for what he owned, and it was obvious to me at that time that some pent up demand had to exist. He emailed me back and said he wasn’t interested. This was earlier this year. Recently, he emailed me asking for a price for his property. I told him a number that was indeed a premium, but not as significant of a premium as I had mentioned earlier this year. He was angered by my number, and suggested that I must have forgotten what I told him only a few short months prior. In fact, I hadn’t forgotten that lofty number at all, but in the time since that quote the market had added inventory in this specific segment, and that inventory had failed to sell. The market momentum that I sensed earlier this year had been squashed under the weight of competing inventory. The time to sell was last spring, the momentum was there, the market ripe, the window missed. This is not my fault.

Sellers have a hard time with this discovery. When it comes to real estate, you can either sell when the market wants you to sell, or sell when you want to sell. There’s no other choice. If you sell when the market wants you to sell, you behave like I do- you lock a gain when you see one, and you move on to the next project. When you sell when you want to sell, you assume the market will respond kindly, because after all, you’re a seller and your house has that sweet gold faucet in the master bathroom. But the market doesn’t care about you, it doesn’t care about your faucet, and if you decide to sell when the market isn’t primed for your specific offering, you’ll flutter in the wind as you await the whim of the market to turn your way. This concept isn’t that hard: Sell when the market is good, hold when it’s bad, but don’t sell into a bad market and expect to overcome it just because your house is special. Yes, I know that in that line of ranch homes your home has an outdoor kitchen that consists of some stacked concrete blocks with a grill precariously perched in the middle.

If you’re a long term holder of real estate, then you needn’t worry about the right time or the wrong time, you just live and you enjoy the seasons and you replace the roof when the time comes. This is how most of us tend to view real estate. We view it as though we’re there forever, or for long enough that market peaks and valleys matter little to us because after a long time of ownership we’ll have enjoyed some appreciation no matter the immediate mood of the market. But this self considering view is incorrect, because most of us move every 5-7 years and if we’re timing those moves at the peak of a cycle then we’re selling high and buying high, and if we miss the peak then we’re buying low and selling low, the net gains are the same.  So if we’re going to buy and sell, shouldn’t we do so in an opportunistic manner?

The time is now to be an opportunistic seller if you’re an owner of a lakefront home with a market value in excess of $3MM. Never before has there been so much liquidity in the upper bracket of this market, and I do mean never. Sellers of homes in $3-4MM range have always enjoyed some level of active market, so their inclusion in this segment isn’t unexpected. What it unexpected is the demand over $4MM, and that demand continues with pace all the way through $8MM. Without exaggeration, several of the homes I’ve sold this year are homes that I could have sold twice. The market needn’t  have one hundred buyers in this segment to thrive, it just needs a handful and that’s exactly what it has right now.

And that brings us back to the timing of it all. Yes, conventional wisdom says to list in the spring. But conventional wisdom is wrong in this case. If you’re a lakefront owner with a property in this discussed segment, now is the time to sell. You don’t need to sell now, obviously, instead you could wait until next year when you’re more ready. But next year has its own set of unknowns and the only thing known is what the market is doing today, and today it wants to buy your expensive lakefront home. This year, three lakefront properties have closed over $3.9MM. I’ve been involved in all three of those sales. Two more sales over $5MM are pending sale right now, and those are both my listings as well. It shouldn’t need to be repeated but if you’re a lakefront seller looking to capitalize on this market, I’m your guy.

 

To Farm

To Farm

The tractor is more important than everything else. The barn matters some, but not so much that you’d particularly miss it if you didn’t have it. The gravel driveway needs tending to, after the first snow and the last snow, the muddy middle seasons and the heat of a potholed summer.  The tractor is green but your neighbors is red, and still the neighbor down to the east has a blue one.  Some of the tractors on the road to the south are yellow, not a sunshine yellow but a harvest yellow, almost gold, really. Each owner will tell you why the other colored tractors are inferior to theirs, but each knows that a tractor is a tractor is a tractor, so long as it’s a good one. Without the tractor there is no farm. I learned this first.

Pluck a man from the city and set him atop that tractor and watch him try to fight his smile. It’s something that cannot be done, never has been done. There’s hardly a reason to frown on a tractor, at least not when it’s your first time atop one. But by the end of a soggy September there’s not much smiling done on the tractor. The harvest is just getting underway and the beans are too moist and the corn starting to mold. The ruts from the tires muddying the county road, no matter, car drivers just wait for the next rain to wash the road clear. Then the tractor muddies a two track path again, and the dance continues until the rain stops or the mud freezes or the last bushel has been hauled down the road to the granary.

I decided long ago that I wouldn’t farm for beans, and before that I pledged that the corn wasn’t for me. I hadn’t the manpower to pick the sweetcorn, to de-tassle and to haul and to market. I hadn’t the time, and my tractor was too small to haul such a heavy load of fresh, dew-soaked sweet corn. The best crop, an old timer once said to me, was the crop that grows without being told. The crop that grows because it wants to, that’s the crop to farm. Beans grow here, but they can burn out under an unreasonably high June sun before their canopy bushes to cover their roots. And corn loves the sun and it loves the rain, but too much in May and not enough in August make for a tricky harvest. I once saw a farmer drive his tractor down to the granary, his face beaming with the pride of a full wagon. When he pulled in to be weighed and inspected, he was turned away by the man at the scale. Too wet, he said, and too small, and too starchy. Even Kellogg’s wouldn’t grind that, the man said. The farmer slowly dumped his full season of work along the margins of the road in his way home, so that he might lie to his wife.  Things were fine and that the money would last the winter.

The crop I chose was hay. We call it hay but it’s just some grass and some clover and a bit of alfalfa. If the weather is just right, I’ll cut it four times. Once in the spring, twice in the summer, and once into the fall. I get more for the spring crop, it’s sweeter, and the horses prefer it. While the farmers a ways away mortgaged to buy their combines I needed only the cutter, the rake, and a bailer. I already had the tractor. You’d think the field would dry and whither under a hot summer stretch, because the grass lawns haven’t needed cutting two weeks by then, but the fields are sturdy and they’re persistent and when the rain falls they grow and then when the sun scorches they grow. And when they grow I cut and I rake and then I bail. It’s not so much work, not so different than mowing a lawn.  This is why when I become a farmer someday I’m going to be a hay farmer. I already have the tractor.

The Business Of This

The Business Of This

This is, after all, a business. It’s not hard to think of real estate as a business. The business of the business has an office and a phone and some computers and in this, it’s just like all of the other businesses. We all understand that, the business of real estate. But it’s harder to think of Realtors themselves as businessmen and businesswomen. This is because I’m wearing jeans right now and there are some holes in them, and I’ve only discovered these slight oil spots in my t-shirt now that I’ve left my house and am at my office. These oil spots vex, because I haven’t been spilling oil on myself, nor have I been rubbing shoulders with those who might have done so. Still, jeans with holes and oily t-shirts and yet I’m at an office that appears to be functioning as a proper business. But I’m here, at this office and it’s seven something and the majority of the real estate world is still in their pajamas, sipping their coffee, cracking open their laptops on their breakfast room tables. You could argue that pajamas without oil spots are superior to t-shirts with, but that’s not the point.

In this business there are wins and there are losses. I’ve been fortunate to win a bit this year, quite a bit, really, and in that there is comfort. Not comfort that I’ll always be okay but comfort in knowing I’ve successfully pushed off failure for another year. There’s some struggle now, knowing that I must either keep producing or whither away, but there is mostly gratitude for this incredible base of clients that have chosen to trust me with their Lake Geneva maneuvering. This trust is important, in fact it’s everything, and trust placed in a guy with oil spots on his black t-shirt is a meaningful level of trust. But still, this business and this life and the facts of real estate. I continue to feel that there are misconceptions revolving around Realtors and this life, and while most of the cliches are actually true and damning, there are some things I think you should know. Consider the curtain drawn back:

When I interview with a potential seller for their potential listing, I usually want the business. In the event that I don’t get that business, and instead another agent does, I can admit to you now that I wish bad things to happen to that listing. I actively hope it doesn’t sell. I aggressively root against the success. Now, now, don’t assume that means I won’t bring in a buyer and sell that property, because I will in order to drive home the point that the seller made an egregious mistake in listing with anyone other than me, but I do wish ill for the property in general. Petty? Absolutely.  This is a confession, but it’s not unique to me. Every Realtor everywhere feels the same, and now you know.

When I push a seller to take an offer that might be lower than what the seller wants, I’m not doing that because I want to get paid. I like getting paid, as does everyone who works at any sort of job, but when I urge a seller to accept a price I do so without any particular regard for a future paycheck. I do so because for every seller that refuses an offer and then, soon thereafter, ends up getting his price, I’ve seen 500 sellers who refuse an offer and are later filled with deep regret over their missed opportunity. Do I like making commissions so that my children might be able to eat their dinners of chicken, rice and corn? Of course. But do I tell a seller to take the money and run because I’m thinking about what I’ll get out of it? Absolutely not. The business is structured in such a way that compensation only occurs in conjunction with a closing, which leaves the interests of the agents subjected to conflicted scrutiny, but I assure you that I only push a seller because I know the seller needs that buyer far more than the buyer could ever need that seller. To put it more succinctly: Don’t hate the player, hate the game.

Agents are not always busy. They’re not. No matter what their Facebook or Twitter feeds tell you, they aren’t always on showings when they aren’t at closings. In fact, most of them are at home. That’s why I built this office to feel like a house, so that when the middle of winter comes and with it cold and dark and snowy, I can simply stoke a fire and work without feeling the need to drive home and do the same. Most agents work from home a shocking percentage of the time. So when you call them and they’re busy, they may be napping or sipping tea or they may be binging on House Of Cards because they assume it’s about real estate. I’m hardly ever at home, but that doesn’t mean I’m working 18 hour days, either. In fact, about once every 7-10 days I’ll go fishing and take that day mostly off, even though the cadence of my cast is continually disrupted by cellular notifications. And when I take a Monday or a Tuesday off and that’s the day you call me, don’t be upset, because on Sunday when you were playing I was showing houses to someone from Palatine.

The business is far more stressful than you might imagine. That’s because the agent is the cog that seems unnecessary and overpaid, but if the agent is doing this correctly the agent is also the glue that holds a transaction together. Being the glue is stressful, and it creates significant tension for the agent.  The world loves to view agents as overpaid cheeseballs, because in fact we often are, but successful agents are often so because they feel the burden of knowing the deal rests of their shoulders, and without them, the deal would often fall apart. Bad agents know this but they don’t care, good agents know this and it causes them to wake up at 2 am because they’ve had a nightmare that your deal fell apart and it was their fault, even though it wasn’t actually their fault. Good agents are stressed agents, and I’ve often done my best work when scrambling and stressing, especially when I’ve already forgotten that I have oil spots on this shirt and I’m already late for my first appointment.

Geneva Lakes Antique Boat Show

Geneva Lakes Antique Boat Show

The thing about September is that it can rain a lot. When it rains in September that’s not welcome, no matter who you are. Had I planted those new trees in my back yard I’d be happy for the rain. But I didn’t plant those new trees because I am waiting for October, for the month when the weather should be changing and with the change, rain. The farmers are happy for rain in June even when the lakeside revelers are unhappy with it. The corn needs rain, beans, too, and so the farmers wish for and the revelers wish against. In September, the farmers crave dry weather so their crops can be harvested, and the revelers crave those last few dry days of summer so that they might swim once more. Today it’s raining and yesterday it rained and this weekend it might rain. No matter, it’s boat show weekend and shows, as we know, must go on.

Here’s the thing about the Geneva Lakes Antique and Classic Boat Show: It’s something you should do, but it’s not something you’ll necessarily love doing. It’s a cool show because it’s here and we’re here and you’ll like the boats and the scene is fun, but it really is a show about old wood boats. I love old wood boats. I always have and I always will. But old wood boats are sort of like shoes. It’s neat to have a few pairs, but if you have 200 pairs and you look at them all at once they just start to look like a bunch of shoes. There are newer shoes that look like old shoes, and there are old shoes, and there will be some shoes that you’ve never seen before. But at the end of that day, and at the end of this weekend, these shoes are our boats, and our boats are your shoes.

That’s not to say this isn’t a good weekend to be at the lake, because every weekend is a good weekend to be at the lake, but it is to say I don’t want you coming to the boat show and expecting to be remarkably entertained. There will be some music, some food, lots of boats, and trinkets of boat-related interest offered for sale. Some old guy will sit by his boat, the one that you don’t care much for, and you’ll feel somewhat obliged to walk down his small pier wing and take a look at his boat. By then you’ll have already seen a hundred or so boats, but you won’t be able to ignore this man’s boat because you know he entered the boat in the show because he loves his boat. You feel like you should too, so walk down the pier and look at his boat and nod like you appreciate what it is that he has there. This is proper boat show etiquette.

I always feel sad for certain boats in the show, those boats that travel from Minnesota or Michigan or Iowa or Ohio to be here. Those boats spend their lives toiling in some dirty-water-lake in some other state and for just one weekend a year they get to ply our waters. They get to see how the other half lives, and for these boats this weekend is everything. They’ll arrive today and some tomorrow and they’ll push into our water and they’ll frolic for a few days. They’ll float and their hull will soak in the goodness that is Geneva Lake and then, without much ado, they’ll be dragged from the lake, kicking and screaming, snorting and huffing, and they’ll be towed, against their will, back to the lake from whence they came. It’s a good weekend for us, but a sad weekend for these out of state boats.

Come up this weekend, indulge the boats and the scene. If the weather cooperates it will be a perfect lakeside weekend. If the weather doesn’t cooperate, as the forecast threatens, it’ll still be a nice weekend. What would you be doing instead, hanging out at a mall or standing in line for brunch?  Hopefully I’ll see you at the lake this weekend.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

The entry level lakefront market is a perplexing little market. On one hand, it’s obvious that a cheap lakefront on Geneva will always find an audience. This is unavoidable. On the other hand, the inventory is slight in this segment and yet there have been two entry level lakefront homes toiling under $1.4MM for much of this year and nearly for all of last. In the same segment, a new lakefront was listed last week and has since gone under contract (I’m not involved in the transaction). Not only is the new home in the same segment, it’s on the same street, and it sold without much ado even as the other two sit. This bothers me, but it proves the market absolutely loves new inventory and at the same time finds something distasteful about aged inventory, no matter what benefits the aged inventory can offer. New inventory good, old inventory bad, or so the market proves.

Last month the wide frontage on Basswood closed for $3.55MM. Lest you think this was some amazing, full depth Basswood lot, I assure you that it wasn’t as ideal as it first sounds. The property was wide at the lake, beautiful indeed, but the lot angled back to a sliver as it headed towards Basswood. Compare this to my listing on Basswood (more money, granted) that runs a complete rectangle from lake to Basswood, full of old deciduous growth. Still, the lot that sold is nice and the house could very well be renovated. I’ll be curious to see if there’s a sizable renovation there, or just a lipstick renovation, or if the structure follows the well worn path towards demolition. Time will tell.

That sale was the seventh lakefront this year to print at or over $2.75MM.  Not coincidentally, of those seven sales, I represented either buyer or seller in five of them, including the three highest priced sales of 2016. Last year at this time we had closed just four lakefronts at or over $2.75MM, so there’s little doubt that the market at the higher end has much more strength now than it did before.  As I wrote last week, what this upper bracket markets wants now is more inventory. We can’t sell what we don’t have available, and so there are buyers on the hunt and increasingly less game in the field. My large lakefront in Fontana is under contract, leaving just 11 lakefronts priced over $3MM for sale. Of those, two or three of them are in no danger of selling, perhaps ever.  The highest priced listing to grace our lakefront this year has just been reduced from $16.45MM to $14.5MM.

And that brings us back to the entry level market and the lesson of the week.  In this lower inventory environment, new inventory will always be met with excitement. Sellers who are thinking of waiting until next spring to list their lakefront home are doing themselves a disservice by not taking advantage of the market conditions that exist today. Why trade the relative certainty of today for the complete uncertainty of some time far into the future? The thing is, even with this low inventory environment, there are deals to be had. There are aged bits of inventory that look appealing to me, but that’s because I’m value driven and I know that just because the market hasn’t been excited by a property that doesn’t mean there isn’t value hidden under all those days on market. Below and above, my Basswood estate listing.

North Lakeshore Sells

North Lakeshore Sells

Sometimes, there’s not much to write.

There’s a seller and a buyer and they get along and they’re both honorable and they complete a transaction. Sometimes, the house is perfect, the price is accurate, the deal pure. That’s what happened with W4449 North Lakeshore Drive in Linn Township this summer. I listed this home in July, and it closed yesterday for $9,950,000 (the fully furnished number, transfer will be less). The print is wonderful for the lake, wonderful for those of us who care about proving liquidity at the high range. If you offer perfection and you present it to the market in a  way that proves the pedigree,  good things will happen. In this case, I was honored to represent the seller who trusted me with this fantastic listing.  I’m beyond grateful.

This sale puts me over $37,000,000 closed on the year. That’s a humbling total that’s nearly double my next closest “competitor”. If you’re a lakefront buyer or seller with a Geneva aim,  I’m here to help.