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The Future

The Future

Twenty years ago today was a normal day. Nothing much happened. I woke up and I drove myself to the gas station across from Daddy Maxwell’s, and I walked over to the new machine in the corner. It was a cappuccino machine, and it whirled and spit out a sugary, foamy drink that in no way resembles what I know a cappuccino to be today. It was the highlight of my morning, and I’d sip it a bit over the mile of bumpy roads that led to my high school. Harris Road was bumpy then, and it’s bumpy today. In twenty years, it’ll be bumpy.

My homeroom was in the kitchen of Calvary Church.  My freshman class was made up of the same kids, but there were more of them then. After the freshman year, some of the kids left, through expulsion or systematic suspension, or because their parents got divorced or were thinking about getting divorced. The kids were there and then they weren’t, but the nucleus remained through the years. By the time we were relegated to the kitchen for our homeroom, there were just 12 of us left. I had my Saab 900 in gunmetal gray, my leather computer bag before people stashed tablets and laptops in them, and I had my cappuccino that wasn’t really a cappuccino at all.

Our lunchroom was our gym, and we’d eat quickly so we could work in games of 21 on the other end of the gym. Our classrooms were in the basement of that church, so on nice days we’d sneak outside to soak in the spring or fall sunshine. It was during one of these breakaways that I was yelled at by a school administrator that I know to this day. When I see him, I assume he remembers that day, and I secretly hate him for it. During a similar lunch break my friend and I pulled the fire alarm, because it was red and there and we were hopped up on faux cappuccinos and lunchtime basketball. We confessed only after being told the police department was on their way over to dust for prints. Our confession wasn’t entirely truthful, but they bought it and we weren’t particularly punished.

Most weeknights, I would take my leather computer bag and drive to Gateway Technical College to listen to some real estate person tell me what I needed to know about the business of real estate. That man told me what I should say and what I shouldn’t say, and while I sat in class with a throng of individuals who are nearly entirely no longer in the business, I took notes, diligently. When the class was over I’d stuff my notebook into my leather briefcase satchel and drive myself home. The next morning, I’d drive to the gas station, sip the sugary drink, then drive the bumpy road to school and park where the kids could get a good look at my Saab 900 that I bought for $3500 and pull up a stool to the kitchen island. This was my senior year.

These mornings, my wife makes me a cappuccino. It’s not really a cappuccino, it’s just a double shot of espresso and some steamed milk, which I suppose would make it a latte but the ratio of espresso to milk is 1:1 so it’s less like a late and more like an espresso with some milk in it. It’s tremendously good. I drink that drink and I wonder why it took me 20 years to buy a proper espresso machine, and then I wonder who the monsters are that still drink drip coffee when such fabulous espresso machines are available. Then I wonder about the people who put a puck of compressed coffee into a machine that whirls the expresso out and I think of that time I stopped at Williams Sonoma in Lake Forest and tasted one of these so called espressos. Then I finish the coffee and my kids load into the car and I drop them off at the newer location of the same school that I drove myself to 20 years ago.

Outside of this window, beyond this desk and beyond this large computer screen, I can see the office I started working at in August of 1996. I was barely out of high school, barely aware of anything at all, and I sat in that office wearing an ill-fitting shirt and a tie I borrowed from my dad’s closet and I’d hope the phone would ring. When it rang, I’d wish it hadn’t. I bought my first computer and I hooked it up to this new internet, and I’d email people and wait a few days for their response. I had a pager then, which I thought was a remarkable bit of mobile technology. All I had to do was wear it on my belt and it would vibrate when someone wanted something, though I couldn’t know what they wanted until I called them back. I wore it with pride in the way that a kid last summer might have worn his Apple Watch. But my pager was lame and I was lame for having it, but it was 1996 and things were strange and I still had that leather briefcase bag but no laptop to put in it.

Herb’s old gas station was still operating then, and his muffler shop next door hadn’t yet been torn down and replaced with an empty auto-repair shop. I’d stop in to see Herb for one reason or another, all of which related to mufflers, and it was during one of these visits when Herb told me that I wouldn’t be successful because I was too young. Who would work with me? I was too young, because this was before Josh Flagg squeaked and swaggered his way onto our televisions and back then, Realtors were white haired and they drove matching Cadillacs.  It was around that time that the Keg Room burned down.

The Keg Room is still burned down. Herb doesn’t own the gas station anymore, but there’s still a gas station on the corner. Daddy Maxwell’s still serves a heck of a cajun chicken sandwich, and there’s still a gas station across the street. Southwick Creek, where I saw my first trout,  is still flowing through culverts and still hosting a handful of trout that try so hard to stay alive. The beach is still where it was, and while there’s a new beach house I’ll bet that every once in a while a snapping turtle still follows Harris Creek into the lake and then the kids shriek and the beach mothers point and warn. Williams Bay today looks like it did twenty years ago, and that’s exactly what it’ll look like in twenty more.

Lake Geneva Winterfest Car Parade

Lake Geneva Winterfest Car Parade

Somewhere, high above the ruckus in a jet guzzling newly-cheap fuel, Al Gore puffed on his cigar and cracked some form of smile. Undoubtedly, he saw this story and forwarded it to his colleagues, assuming he has any left. I told you so, in the subject line. The link to a story, perhaps from a local newspaper, or a national one, or maybe from the German press (German’s love cars-fall-through-ice-stories) or the UK’s Daily Mail, outlining the folly of cars breaking through the soft winter ice. It was warm, the papers would say, too warm to park cars on ice, sunny and warm, just like all of the winters have been. In fact, this may be an omen of things to come, and someday, the papers surmise, we’ll all live in a world where it will be unsafe to park cars on ice. Al Gore, was right, they’d all say, and that Volvo S60 would know it better than most.

But what unfolded Saturday afternoon on Lake Geneva’s frozen water has very little to do with temperatures, and less to do with the melting power of an afternoon sun. Those cars, those 10 or 15 or was it 20, those cars didn’t really sink though melting ice, as the stories from here and there, near and far, tell us. The cars sunk because the ice sheet cracked along a seam, and when the sheet of ice those cars were on broke free from the strong ice around it, the cars began to sink. It wasn’t the warmth or the sun, it was just a many dozens of tons of combined vehicle weight that forced that ice into, and under the water. The cars simply went along for the ride.

Was this negligence on behalf of the car owners? Of course. Was it some rare variety of stupidity that caused them to do this? Not really. Cars park on that lake often, and in numbers far greater than the numbers from Saturday, and nearly every year this occurs without incident. This year, El Nino has kept the ice from freezing quite as thick as it might tend to, though I admit now that I was wrong in my prediction that the entire lake wouldn’t freeze. I wasn’t able to forecast that 3 day sub-zero snap in the middle of January, and so I was shamefully wrong.  Were the owners at fault for following the status quo onto the ice? Not really. Would I have been parking my car on the ice this year, knowing the conditions that have led up to a less than concrete freeze? Not really.

Some would say that it’s the city of Lake Geneva’s fault, that they should have forbidden this. This would be a kin to the city needing to post lower speed limits on the local roads during a snow storm. If the speed limit on Highway 50 is 55 during a summer afternoon, and it’s 55 during a fall morning, it’s still 55 during a February blizzard. If a traveler is on this road in the summer, 55 works. 55 is good in the fall, too. But during that blizzard, should the driver be driving 55? And if he is driving 55 and he spins out and dies in a fiery wreck, is it the fault of the city for not posting a lower speed limit that applies only during blizzards? The city didn’t tell people to park on the ice, it simply allowed it. It isn’t their fault that the car owners decided to go risk-on for Saturday without undertaking some due diligence.

There are reports circulating that the car owners were fined some significant sum of money for their folly. I don’t believe this to be true, though they may have to reimburse the city and towing companies for their time and efforts. No, there’s really no one to blame here, and I don’t think the people who parked there were, as the comment sections of every news story on this event would have you believe, stupid. I just think they were caught up in the fun of a most perfect Saturday at the lake, and they made a mistake that they’ll get to live with for quite some time. I do question how the owners had left their cars for so long that they weren’t able to join in the other car-owners who drove their cars off the sinking ice before it was too late, but alas, the revelry of a winter weekend must have gotten in the way.  As for the lake itself, it simply provided a gentle, fatality-free reminder that lakes are dangerous if you’re unprepared.

Cars Break Through Ice Lake Geneva

Lake Geneva YTD Performance

Lake Geneva YTD Performance

The year is young now, but not so young that we can’t judge it.  One year old children are young, so young that we shouldn’t judge them. But two year olds? Judge away. The market is now in its second month, and with a lifespan of only 12, our market is as a 7 year old, and we know very well that we can judge 7 year olds. If a kid is fantastically smart and sweet as a 7 year old, chances are that behavior will stick through his or her life. If the 7 year old is horrible, mean and ornery, we can, sadly, assume that this 7 year old will grow to be a horrible, mean and ornery adult.  The 2016 Lake Geneva real estate market is old enough now that we must judge it.

January was not a kind month to my biotech heavy portfolio, in fact, it was ruthless and homicidal. The year started with big index declines, and continued in this most miserable lower for longer pattern. The good news might be that the bottom seems to have held for now, so buyers have not been scared away in the same way that they would have if we remained in that free fall. Most segments are doing just fine today, with individual markets performing better than others. Remember, cheap oil means your portfolio looks awful and you won’t be retiring on time,  but never underestimate the life affirming power of $1.49 gasoline.

I had a closing last month in Geneva National. GN, as you may recall, had a fantastic 2015. The carry over has not yet been evident. Today, GN has the rare condition of owning 71 market offerings (single family and condominium) but not a single showing as under contract. I have little doubt that something is under contract there, but the MLS isn’t yet reflecting that. That’s rare, that’s odd, and it’s not good. Sellers in GN who entered 2016 thinking that things have been completely healed should rethink that supposition. The market is better, yes, but if a particular seller has not yet succumbed to the pricing realities that cemented in 2015, then don’t expect buyers to be rewarding GN with liquidity in the way they did last year. GN, pay attention and don’t get smug just yet. YTD Grade: D

Abbey Springs has somewhat high inventory at the moment, with 36 offerings. The good news for AS is that they also have at least five of those properties under contract. If GN boasted a similar ratio, we’d see 10 GN properties under market at the moment and everyone would proclaim the market as hot, hot, hot (Disclaimer: Many agents do this regardless).  Abbey Springs has just one single family home under contract, that of a reasonably nice home on Saint Andrews listed at $699k. It’ll be interesting to see if 2016 delivers some upper bracket buyers in Abbey Springs. That didn’t happen in 2015, but we’ll see if ample inventory provides a few of those rare $800k+ buyers to Abbey Springs. YTD Grade: A-

The lakefront condo market on Geneva has, since its heyday of 1998-2006,  stalled. Spurts of volume here and there do not heal a market particularly well. But alas, prices in this segment never cratered in the way that the residential lakefront market did, which always perplexed me. If you’ll remember back then, I was perpetually wondering why there weren’t more foreclosures in the lakefront condo segment. I was happy there weren’t, but still surprised. Today the lakefront market has some nice movement, with a bit of aged inventory in Fontana Shores under contract and a townhouse in Somerset that just closed this morning for $725k. Inventory remains light in this segment, which is good. The lakefront condo market chokes on inventory. So far, so good. YTD Grade: B

The lake access market surrounding Geneva is off to a quick start, with five properties pending sale today. A few new ones- a contract with buyer of mine on a Glenwood Springs property, and a new contract on an off-water home in Cedar Point. That home is listed for $825k. It’s a charming home, but off-water with no slip and a somewhat limited cottage design. It had sold previously in 2007 for $1.15MM. That was a peak price, and then some. Other pending properties are in the lower reaches, including on in Indian Hills in the $400s, and three more under $250k in Country Club Estates and Cedar Point Park. YTD Grade: B

Lastly, the king, the lakefront market itself. Inventory is tragically low, with just 23 true lakefront homes listed (and four vacant lots, including two that are my listings- Loramoor $2.34MM and North Shore Drive $4.475MM). Of those 23, six have contracts. That’s really quite remarkable, so let that sink in for a bit. Out of 600 or so lakefronts on Geneva, just 17 homes are for sale. If you think you’ve found an exclusive market somewhere in some mountain town, I assure you we belly laugh at your exclusivity. Pending today is the small odd home in Knollwood ($1.125MM). That home is proof that if you just wait forever and keep dropping your price, you’ll sell. Dartmouth Woods is pending ($1.35MM), and that’s a nice little place that I like quiet a bit. A newer build on LaGrange is pending just over $2MM. If you don’t know the house, it’s the one that sits in the shadow of Vista Del Lago.

Bonnie Brae has a pending sale in the low $2s, and once that closes we’ll have seen a rather significant turn over on that Snake Road street. In the past several years, the market has closed three other lakefronts on that short road, with this pending ranch about to become the fourth. That’s nice to see, as new owners generally undertake some level of beautification of the home, and the market benefits.  In the upper reaches, the old brick home in Williams Bay formerly known as Towering Elms (until Dutch Elm Disease killed them all) is pending with a $3.85MM ask. Expect that home to be knocked down once closed. Finally, I have my sale on Lackey Lane in the mid $4s pending to  buyer whom I’m proud to represent.  YTD Grade: A-

One small lakefront closed last month, that of the skinny lot on Outing, just to the West of George Williams. For $800k, a buyer snuck onto the lake. It’s a curious property sure, but it’s $800k and that, is that. The lakefront market won’t be making an encore of the 2015 volume totals if this inventory stays low.  I have some exciting lakefronts coming to market in the near future, and I expect other agents have their own off-market properties on their radars.  The South Shore Club continues to be absent a single offering, which means that club won’t be lending too much to our inventory totals unless there’s a sudden influx of inventory, which I’m betting there won’t be.

For now, so far, so good. No after school tutoring or behavioral sessions necessary for our little seven year old.

 

It’s Lake Geneva’s Winterfest Weekend, so please do come to the lake if you like cool things, like snow sculptures. It’s a really great weekend. If you’re planning on waiting in line for brunch tomorrow, you can do so much better.

Geneva Dreaming

Geneva Dreaming

I haven’t shared this yet, but I nearly won that large lottery back in January. The night before the drawing, my wife and I made no small plans. We would buy a large home on Geneva, which home exactly I cannot tell you out of respect for those homes that we didn’t choose. We would buy a home in the mountains, but not just any mountains, the Canadian Rockies. Why on the Canadian side? Because my wife is Canadian and it’s either I buy a mountain home near trout fishing or I buy a prairie home near Winnipeg. I choose the mountains, if I must choose Canada. Then, a home in warmer climes, but not Florida. I was in Florida last week and while I appreciate what it is and why it exists, I do not plan on owning real estate there for the duration of my life. Turks it would be, where I can fly fish from my own beach, and hunt for spiny lobsters when I tire of casting. I assume they have spiny lobsters there.  The house we picked on that island was in the $20MM range, which was reasonable given our certain winnings. We spent an hour that night picking and planning, and what fun it was. The only thing better than a dream house are dream homes.

The picking of these homes was fun, simple, so easy even an Illinoisan who vacations in Michigan could do it. The next day, when we didn’t win, though we did amass a fine collection of at least two matching numbers out of the small pile of numbers we had purchased, we weren’t upset. We knew the exercise was one of intense futility, but we also knew it was fun to dream, if for an evening. We had, after all, effortlessly picked the location of our dream homes and the homes themselves. We envisioned a snippet of life in those homes, of a summer spent here, and a winter spent wading through the flats of a nameless turquoise bay. The entire process, from start to finish was enjoyable and easy. Dream home shopping is like that, but only when it’s pretend.

A real dream home search when playing out over a real life schedule, is anything but fun. For those who have dreamed of the ability to find that ideal house, when money is no object and when time is as plentiful as these Benjamin’s, the process is fun and carefree, a whimsical dream of fancy.  When the dream house must fit a budget, no matter how dreamy, and the geographic confines of the house makes the choices rather limited, and the kids have hockey two nights a week and STEM class on Saturday, well, this thing isn’t as easy. Nor is it entirely fun. To those who have never looked, you might not know what I’m talking about. To those who have looked, far and wide, down this little lakeside lane and that one, in the Bay first, and then Fontana, and Linn and Geneva, you know what I’m talking about. In fact, you may know so well what it is that I speak of that you’ve pushed this hunt to the background in favor of those things in the foreground.

This is easy to do, when schedules are tight and vision is limited. It’s easy to do when the vacation home is viewed as an unnecessary luxury, as something that exists in the background as a dream that needn’t be fulfilled because it’s just that, a distant dream and we the serious know that distant dreams shouldn’t interfere with the work that must be done today. But is it this way? Is a vacation home just a dream that might be fulfilled when we have superfluous time and excesses of money? Should a vacation home search be only executed when time permits, when the schedule opens for a day, or a few hours, or a week next August? Is this something meaningless, that looks like fun but has no bearing on real life? Is a Lake Geneva vacation home just another something, rather than nearly everything? Does any of this actually matter?

I’d tell you today that it does, and you won’t be surprised that I think that. But why do I think that? Do I think that solely because unless I do my children will starve and I’ll be forced to pull your next espresso shot at your favorite Lake Geneva area coffee shop? Or do I think that because I’ve seen it, because I see the families that come here and commit to this place and I see the way their lives are changed? I’d be lying if I told you it was all of the latter and none of the former, but it’s more of the latter than you might presume.  It’s easy to get to Lake Geneva, to drive on a Friday night that short direction North and some to the West, but it’s not easy to establish that as the routine. It’s easy to wire money when the money is available, it’s easy to receive the keys, and it’s easy to show up on a Fourth of July Weekend whenever everyone with a lake house does the same. But it’s difficult to aggressively pursue the hunt, and it’s difficult to make it to the lake house as often as you know you should, and it’s yes, it’s difficult when you have too much work and not enough time.

In my life, it’s the difficult things that are rewarding. The easy things, the immediate things, the things that have no choice but to be done, those are the things that mean little.  It’s easy to forget about Lake Geneva in the dead of a Midwestern winter, even if the winter is as this one, which feels more like mid March than early February, but forgetting about your summer in the middle of winter is the best way to ruin your summer. Dream homes that only occupy our dreams are easy. Dream homes that require effort of us are hard, but the rewards are endless, the satisfaction palpable.

 

Ban The ‘Toon

Ban The ‘Toon

Most things built for some specific purpose look appropriate when doing that purpose, even if they look awkward and unwieldy in another setting. For instance, a big airplane.  How sleek it looks when cutting through the sky, how nimble, how purposeful. Or a slalom ski in action, cutting and slicing, tethered to the users’ foot, effortlessly accomplishing whatever a shift in weight commands it to.

But if the plane was on Geneva Street right now, what a mess it would be. How would we turn it into the gas station for fuel, and how would we maneuver it down to Harpoon’s for lunch? It would be a mess of clipped trees and confrontations with cars.  People would gather and some would remark, why is this plane here and now what are we to do with it?  The ski, so graceful when directed by the skier, so out of place when that skier tries to wear it into Starbucks for his morning coffee.

This morning, I was minding my own business. It’s Monday today, which is meaningful for most people but insignificant for most Realtors. It’s just another day, indistinguishable from the others. I prepared for my day as I have for every day since that day in October when my new espresso machine was delivered by the friendly UPS person. The coffee this morning was good, as is its way, and the kids behaved and my wife wasn’t mad at me anymore and so things were as I wished them to be. My driveway was icy,  the humidity from Sunday clinging in its frozen, glittering form to anything that would let it. It was another beautiful winter morning, the sky washed pastel, soft and calm.

The truck rumbled towards me from the East, bouncing down that bumpy rural road with quick intent. It was heading somewhere to the West, but how far to that direction I could not know. The truck was nice, big, shiny, looking as though the owner was concerned about it and washed it with some routine in this winter to rid it of salt and sand. Behind the shine I could see something following, something close, something blue and wrapped tight. But what could it be? A delivery of some sort? Secret and classified maybe, heading somewhere important where people with clearance would unwrap it and stand back and say with satisfaction, that’s it. 

But it wasn’t anything important at all, because under the blue plastic wrap protruded three aluminum cylinders, each pounded and smoothed to a rising bow.  The blue wrap tattered towards the stern, flapping in the wind, revealing what I already, by then, knew. It was a pontoon boat.

While the plane slices through the air with nearly unbelievable grace yet stumbles on a village road, and the ski carves the water with ease yet scrapes and clacks down a city sidewalk, the pontoon lumbers through the water just as it lumbers down a town road. I was feeling fine this morning, feeling optimistic and fair. Feeling as though winter, in this new month, was nothing to fear, and that its grip was already loosening. I was feeling primed for a new day, a new week, a new month. And then I saw the pontoon boat and thought that maybe February isn’t so great after all. If I can’t avoid a pontoon boat in the country during the dead of a rural winter, how can I expect avoid them on a lakeside summer afternoon?

Loramoor Lakefront For Sale

Loramoor Lakefront For Sale

My kids like to make time-lapse videos. Some people make time lapse videos over the course of an entire day. The sun comes up, quickly, then it moves across the sky, quickly, and then it sets, quickly. It’s a full day, quickly. My kids don’t make time-lapse videos like that. They make ones that last a few seconds, that feature them doing such interesting things as standing still, or sitting at the island counter. Their videos are terrible. I’d like to see a time-lapse video of the lakefront on Geneva, say, over the period of the last 20 years. It would be fun to go back 100 years, but also very depressing, as grand old homes were razed to make room for subdivisions and associations. If we did have that 20 year video, we’d see new construction abound. All varieties, some small and some large, others monstrous. We’d see large homes wedged next to small homes, and small homes delicately crammed next to large homes. We’d see all sorts of things, and in the haphazard nature of it all we’d see uniformity.

LORAMOOR AERIAL

The magic of Geneva is found in this mix. Old and new, small and large, alternating along the shoreline. But one thing is certain- if we had our druthers, we’d position like kind homes next to each other. We’d have sections of the lake where estates rule the day, and we have that on Snake Road. We’d have areas where large lots rule, with large homes and estately prices, and we have that on Basswood and North Shore Drive.  We’d also have a tidy, dead end lane where large lakefront homes are spaced well and appropriately, where one new home is not out of place next to another.  We have that in Loramoor, and today, you have an opportunity to join that most exclusive lane. Enter Loramoor Lot 7, the obvious solution for any house hunt that finds a buyer seeking new construction in the $4MM or less price range.

I sold this lot a year ago. There’s no secret in that. I sold these 110 level front feel to a buyer who simply couldn’t find what they desired in our existing home market.  We have a noticeable absence of quality homes in the $3-4MM price range. We have plenty of nice properties, terrific lots with old, bad houses, or terrific houses on sub-standard lots. In this parcel, the buyer found what they wanted in the existing vacant land, and knew they could build the exact lake house that would scratch all of their weekend itches.  At 1.43 acres in size, the lot is larger than similar properties that have sold in the last few years as tear downs, and since it was already vacant there would be no added cost involved with deconstructing an existing home. The property was perfect, and unlike others in this range, it is surrounded by ample homes of newer birthdates, very obviously a secure location to add value in a new build. Compare this to a vacant lot in the $2MM price range that’s located next to smaller, lesser priced properties. It makes more sense to have a $3.75MM house next to other houses of equal or greater value and here, in Loramoor, we have that.

 

Loramoor Lakefront Parcel

 

The buyer set about permitting and planning, but when a childhood home was available for purchase, the pull of that powerful nostalgia was too much to resist. The Lake Geneva dream would have to wait, and it’s for that reason that I offer you this wonderful parcel for $2.34MM, available today and ready to build your own dream home on without delay.  The owner has been working with Scott Lowell to design the perfect lake house, and to the right buyer we can include those plans. A sneak peak of the elevation is above, and while you’d be well served to build this home on this beautiful lakefront parcel, you’re free to design your own if you so desire.

 

Loramoor Survey Shot

 

You can buy 100′ lakefront lots on this lake with some routine between $1.9MM and $2.5MM. These lots will host older, lesser homes, and if you like the older home and intend solely to remodel it, then you’ll be making a wise decision. But all too often these older homes are sold and torn down, and in that we must consider our surroundings. If you build a $2MM home on a $2MM lot, and you’re surrounded by $2MM built homes, do you suppose that’s usually a terrific idea? Of course not.  There’s safety in building in a  neighborhood with a proven tendency to support your target value, and that’s why this Loramoor lot is better than the others in this price range. There is no association immediately adjacent, no shared driveway, no sloped frontage or rough landscaping. There is only a beautiful canvas, grassed and treed and ready to host your lakefront vision. At $2.34MM,  there’s value here, and if you’re a buyer in the $4MM range you owe it to yourself to consider this parcel as your first, and finest option.

Because you’re super smart and reading this blog, you know about this property before the rest of the market does. It’ll be available to the masses next week, but in the mean time, I’m happy to show it this weekend should you desire. dave@genevalakefrontrealty.com

Lake Geneva Negotiations

Lake Geneva Negotiations

I could have negotiated this deal in 10 minutes if you had put me in a room with him. This is what I hear. I hear it often. This is the refrain of those negotiating pros who buy and sell real estate through a broker. When a deal comes together, I hear this. When a deal falls apart, I hear it then, too. I hear it so much I hear it when I close my eyes and I hear it again when I open them.  That one kid heard dead people, I hear this.

Many buyers and sellers feel that the deals could come together if only they had a chance to handle the deal directly. This might often be the case- that the deal would come together in spite of a broker, not because of one. But this assumes that the deal was an easy one to put together, that neither side needing the convincing that can only come from a market backed perspective. This also assumes that both sides are in a hurry to make a deal, which is generally far from the case.  Consider, some of the best deals I’ve put together have come together only as a result of long enduring negotiations. Time might heal most wounds, but it also bridges many negotiations that might have failed if they were on the clock.

In 2010, I negotiated the purchase side of 1014 South Lakeshore Drive, Fontana. That deal started slowly, as many do, and after a few months of negotiations, we had an accepted contract. Then we negotiated throughout the deal, over another three months, and finally closed on the transaction. What a fantastic deal that was. And many more like it have come about the same way- only through buy side patience, as a seller is worn down through a recognition that his or her property is just not quite as desirable as originally thought.

The problem with this, of course, is that 2010 was a year void of an abundance of buyers and 2016, though the year has started ominously with indices in an funk, has an abundance of such vacation home buyers. Long enduring negotiations only work in the absence of a competing bid. Lately, there have been competing bids.

Two weeks ago I was going to show a listing on Bonnie Brae to a buyer of mine. We set up the showing, we were ready to pounce on a property that was purported to be able to be bought right. We ended up canceling our showing, because the property sold earlier that week to a buyer that had just a bit more motivation, or schedule flexibility, than we did.  A year ago this month I negotiated an offer on a lakefront listing I had on Oriole Lane. That humble, odd home, didn’t sell in 2015, but throughout the year my buyer reaffirmed their earlier offer. The sellers didn’t bite.

Then, a couple of weeks ago, a change in seller sentiment, and our deal was ready to be locked. On Friday, we had a deal in principle, on Saturday, the seller took a bid from another buyer.  I had negotiated patiently with a lakefront buyer for exactly 12 months, and when victory was nearly ours, the property sold to another buyer. Sniped, again.

This week, a deal on an off-water home in Glenwood Springs was apparently nearly complete. A buyer of mine who had seen that home in the summer of 2015, inquired of the property. It was available, I told him, but nearly under contract. He jumped, we offered, we have the property under contract and the other buyer, the one who was patiently working the seller to his favor, is on the outside looking in. This is the trouble with negotiating slowly. It leaves open too many variables beyond the negotiator’s control.

Of course, the most important aspect of any negotiation is in sensing the direction of the market and its response to that particular property. That’s not quite as easy as it might sound. In the case of the Oriole Lane property, I wrongly assumed that time was on my side. I assumed that a property that had languished on the open market for years would not sell in the dead of a Wisconsin winter, on the heels of a volatile week in the markets. I was wrong. So today,  a quick admonition. If you like a property, watch it with me, and we’ll work to strangle the seller together (figuratively, of course). If you love a property, buy it, before someone else does.

The Hunt

The Hunt

How I wish I were a doctor. When you’re a doctor and you travel, you get to tell people what you do. You’re a doctor. That’s what you do. It doesn’t matter what sort of doctor, because if you’re a doctor that’s really all that matters. In the same way that if you’re a mechanic and you work on cars, no one cars that you’re a BMW mechanic, with some credintials abbreviated below where your stitched name adorns your company provided shirt. You might as well be a small town garage mechanic where you specialize in tire changing because you’re not any good at anything else, and you don’t own one of those plug in car doctors that they advertise on television and in trade magazines. Doctors are doctors and mechanics are mechanics and Realtors, well, we’re Realtors.

That’s why when I visit an open house in a far away land, I feel obligated to tell the Realtor that I, too, am a Realtor. I don’t want them thinking I’m a doctor, or something otherwise noble, so I tell them early enough and I remind them often. I’m just a Realtor. But I listen when these other Realtors talk, and I try to learn what it’s like to be a consumer, which is why I only tell the host Realtor that I’m also a Realtor after they’ve given me some information. How else can I learn if I don’t subject myself to the Realtor schtick?

And learn I do. I learned on Sunday that there are three distinct markets on this island, three different places where everyone wants to be. I found that I’m skeptical of this direction. I’m skeptical because I don’t know if this Realtor who just so happened to be holding open this house is any good. How could I know? I see their car, I see their sign, I see their face. I see these things but I have no idea if they’re good or not, and so I ask questions and look for clues. One guy I met on Sunday seemed nice, but I wouldn’t ever work with him. One lady seemed nice, but I wouldn’t work with her either. How could I work with someone whom I had just met on a lark because the day was too cold to do anything else but explore houses I have no intention of buying?

It dawned on me today that what a Realtor needs to do is be present. They just, really, have to be there. This is generally enough. But there should be more to this game, more than just showing up and hoping. The more should be the aptitude that only comes with experience. The knowledge that can only be gleaned from the day to day, from the work that must be done. I traveled an island full of open houses, full of Realtors, full of expectations and hopes and whims and I wonder what it’s all about. Is real estate really this unsophisticated? Is this business really still just this?

At the end of day I decided that, yes, that’s exactly what this business is. That’s why success is fleeting, and that’s why someone else who desires to be present longer can, and will, be as successful as someone who knows why they’re present. Skill in real estate is measured by the ability to be present, to be there when the phone rings on floor and to be there when a buyer in a sports car pulls up to tour houses that he only thought about on the drive up.  From my perspective as a veteran of this game, how can I best express to you, to the buyer that I haven’t yet met, that I am in your best interests?

That’s the question of real estate. Some choose to ask and answer the question in full page newspaper ads, with a smiling or pouty face and a promise of glittery success. Some answer it by simply being, by hoping that if they  exist long enough, they’ll find success. Some, like me, hope to prove worth over time, by being discerning in all things, by pointing out the positive and the negative, the good and the bad, no matter who it might offend. By doing that and mixing it with a track record of unrivaled success.  At the end of this and every day, each approach is the right one. Each approach will have some success. Just like the guy at the open house today who will, after some number of more Sunday’s, sell that house to someone who drove onto the island on a whim. This is real estate, and I don’t have to like it.

The Keg Room Proposal: Another Miss

The Keg Room Proposal: Another Miss

I have not lived in Williams Bay since 1998. Williams Bay, however, is my home town and it is the town that I will name whenever someone asks me where I’m from, no matter where I am when they ask, or where I live at the time. I am from Williams Bay.  Because of this, I’m concerned about Williams Bay, and I wish nothing but the best for it. That’s why I’m once again having to explain what happens when out of town developers invade small communities.

Kane County Shodeen has once again set his sights on development in Walworth County, this time in Williams Bay. It wasn’t enough that he once proposed 4000+ units in Delavan Township, and now has 623 nearly approved near that original proposal site, with 180 more approved in Walworth, and 123 proposed (soon to be denied) near my house in the country. His appetite for development is seemingly insatiable, and now Williams Bay is in the cross hairs.  His development proposal, according to a Lake Geneva Regional News article, is for the Keg Room property on the corner of Geneva Street and Walworth Avenue. For those unaware of that location, it is, quite simply put, the most visible corner in the village.

The plan seeks to cram 31 units (28 small condominiums and up to 3 commercial spaces) on a corner that was previously approved to host just 16 units. The small one and two bedroom condominiums will range in size from 900-1100 square feet. The corner is busy now, with traffic pouring down Walworth to Pier 290, and Geneva Street buzzing past on the North. Everyone who knows this vacant corner knows that it needs to be developed. What I know, as a Williams Bay business owner and a Williams Bay native is that this is the wrong development for our marquee corner.

On a corner in Fontana, The Tracy Group is building a six unit townhouse development (pictured above), and they are absolutely beautiful.  The land that Tracy is building six units on is roughly one half acre. The land that Shodeen wishes to put 31 units on is roughly one half acre. Am I the only one who sees the problem here?  Tracy is putting 6 high end units in Fontana. Shodeen wants to put 31 units in Williams Bay (pictured below, courtesy the Lake Geneva Regional News). Why should Williams Bay deserve anything less than Fontana? Why would Williams Bay seek to approve a development that would render their prime corner a Kane County Special?

Kane County Keg Room Proposal, courtesy the Lake Geneva Regional News

Williams Bay has, for quite some time, wished for a revitalization of their downtown. I helped the cause, building a beautiful cottage style building for my real estate office. I built a small, shingle style property that blends with the surroundings and respects the historical aesthetic of Williams Bay. But I did this because I’m from here, and I care what my hometown looks like.  I want your view, as you drive through my town, to be pleasant. A Chicago developer comes here and sees only dollar signs, and if a 45′ tall building with underground parking and an apartment appearance is perceived to be the best way to make money, then that’s what will be proposed.

It’s back to the question of density and of style and of our intentions with this lovely county we call home. What are we trying to achieve here? Are we trying to grow and grow and by doing so lose our native appeal?  I’m not anti-development on the Keg Room property, I’m anti-this development on the Keg Room property.  I love the village of Williams Bay and always will, and it’s for that reason that I’m forced to fight for its future.  Some will say that the future is development, and it’s best to let it happen. Those are the people who see development in all shapes and density as a positive, and those are not the discerning people who each community needs in order to protect its identity. The lazy response to development is to sigh and approve it, to say it’s inevitable. The responsible approach is to question every aspect of it and if it doesn’t fit with the community, it should be quickly, and effortlessly denied.

I recognize I’m sounding a bit too Erin Brokovichy lately, but unfortunately I have to be this way. I care too much about this lake, this village, and this county, to idly sit by and watch a developer from Chicago change the nature of this place. I sell real estate here because I love it here. I live here because I love it here. I am raising my children here because I hope that they, one day, will recognize what a special place it is. For those reasons I must fight, and I need your help.  I want to keep Walworth rural, and I want to keep Williams Bay’s most important corner free from density.

If the developer wishes to withdraw this plan, I shall wash my eyes with bleach and consider the next plan. If the next plan looks like the Tracy development in Fontana, with 6-10 units in total, I’ll be the biggest proponent of the new plan. Until then, it’s a fight, and I’m far more motivated to defend my community than anyone might have previously guessed.  Please reach out to the Village of Williams Bay officials and tell them we don’t want this development front and center in our quiet beach town. Actually, we don’t want it anywhere in our town.

Email your board:

Jmarra.president@gmail.com
jkillian.trustee@gmail.com
wduncan.trustee@gmail.com
Wbclerk@genevaonline.com
Wmsbay@genevaonline.com
M.engquist.trustee@gmail.com

Geneva National 2015 Market Review

Geneva National 2015 Market Review

In 1992, a small one bedroom condominium in Geneva National sold for $92,300. I imagine how happy the new owners were. They’d come up to golf and to swim, to tennis and to walk, to explore the area and when the day was done, return to their tidy little condominium.  It was a slice of heaven, I suppose. In 2005, that small condo sold for the second time, for $129,900. Seems a reasonable ransom for that little bit of Lake Geneva bliss. If you’re worried that you missed out on that deal, don’t worry, the same condo is available today for $69,900.

It’s not easy to offer a property in 2016 for 75% of what it sold for in 1992, but Geneva National can do it.  2015 was a most spectacular year for GN. 81 built homes and condominiums sold. Consider in 2014 only 44 sold. 2013 had 56 such sales. 2012 just 35. In fact, you’d have to go all the way back to the peak market year of 2006 to find more annual sales (91). Geneva National found favor last year, and anyone wondering why need only consider the sad tale of that one bedroom condo. Prices are still down, values are still obvious, and as a result, the liquidity is profound.

I’ve written often about Geneva National. Indeed such a large development in such a small overall market deserves considerable coverage. It’s no secret that I really like Geneva National. I like like it. It’s a terrific development, and as a guy who generally despises development Geneva National is an exception. It’s a fantastic development and our market needs it to bridge the gap between lake access homes on and near Geneva and everything else. The only problem with Geneva National is that it’s too big. It requires too many buyers annually to keep it moving forward, which is why it stalls when things in the market go sideways for a while. But its size isn’t its fault, it’s the fault of the developer who saw only dollar signs when he should have been contemplating the long term ramifications of such a large development. Perhaps a certain Geneva, Illinois developer should learn from Anvan’s mistake?

Value today is apparent in GN. There are deals, and there is value, and in that, Geneva National should continue to capture the attention it deserves. I sold two properties  in GN last year, and I have a terrific townhouse pending sale right now.  The sort of condo that you can buy in Geneva National for $200k doesn’t exist in Abbey Springs even up to $400k. If you want to affordably hang your hat and have a quiet launching point for a Lake Geneva weekend, is there anything better than Geneva National?

While the 2015 volume was comprised of plenty of smaller condo deals, it was nice to see some higher value properties print as well. There were 7 MLS sales over $500k, which is a positive for GN.  When I built my home in GN in the mid 2000s, I figured the primary market would take to GN and drive up prices as my generation sought to upgrade and improve their housing situation. I was wrong, of course, but Geneva National should be on the radar of any primary home buyer seeking a Walworth County residence in excess of $450k.  Additionally, a vacation home buyer seeking a $500k vacation home should generally try to be as close to Geneva Lake as possible. If that sort of cottage isn’t  desirable, then a GN home should at least garner a look.

Inventory in GN has dropped, with just 62 homes and condominiums for sale as of this morning. That’s way down from the traditional inventory levels that hover over 100, and I expect this will help GN in the first quarter. The properties that are for sale largely represent value, and low interest rates should help fuel some solid spring sales. I’m not sure how GN will fare over the course of 2016 if this stock market blip turns into a real slide, but I would expect a drop in volume from that most excellent 2015. A return to normalcy would be good for GN, so if the association can print 50-60 sales I would think that to be a fantastic year.

These Things I’ve Learned: SEWRPC

These Things I’ve Learned: SEWRPC

There are things in life that you must learn. Most of these must learn items are things you must indeed learn to survive, or at least to thrive. You learn at a young age that water can drown you. You learn that stoves are hot, though mostly that’s for a prior generation to have learned and taught us. Our stoves were already insulated by the time we were old enough to wobble over to them. You learn that girls are sweet but that girls are mean, and that if Becky really, truly, loved you she wouldn’t have gone out for pizza with Billy. You learn, later, that reply all is a function best left unused, though Jim in accounting learned that lesson later than most.

I have, at this ripe age, learned most of the things I needed to learn. But I’m not yet done learning, of course. Now the things I learn are things that I must learn to further success, or to further knowledge. Some things must be learned simply for the sake of learning them.  Ever since I was poked in the eye by the blight of development that threatens to invade my rural back yard I have been learning. I’ve been learning about subdivisions and approvals and the process through which town board members are elected, indeed the process through which they will soon be recalled. I’ve learned more than I thought I would, and in this process I have stumbled into a subject that I never desired to know about before: Regional Planning Commissions.

I am still a novice on this subject, but I am now educated enough to be dangerous, to take this figurative pen and paper and relay my knowledge to those who have yet reason to learn about this topic. Regional Planning Commissions exist all over this great country of ours, or at least in the urbanized regions. I’m not sure if north central Montana boasts an oddly powerful board of this variety, but they might. I assume out there the commission is tasked with preserving beauty and nature, whereas planning commissions in urbanized areas are tasked with the opposite. Their goal is to develop counties.

In this they are both the judge and jury, both the plaintiff and the defendant. Walworth County is “governed” by an organization called the Southeastern Wisconsin Regional Planning Commission, or SEWRPC (pronounced SewerPack). Here’s the way this works. The commission was founded in 1960. It is comprised of an appointed board, with “representatives” from each county in its district.  SEWRPC will be quick to point out that the appointed committee members are generally elected officials from their county, but this is a generality intended to make it appear as though SEWRPC is somehow representative of a county’s best interests.

But about being both judge and jury, both parties to a suit, everything to everyone. SEWRPC funds its $7.5MM annual budget through Federal Grants and Regional Tax Levies, which means it’s your tax dollars funding this organization. SEWRPC formulates growth and transportation plans for districts, and in this case, they are the group behind the Walworth County 2035 Master Plan.  This is the plan that arbitrarily assigns growth corridors. The plan is meant to be a guideline for growth, based on suppositions and estimates and assumptions, but in the county and township hands this arbitrary document becomes the Gospel.  If a particular farm field was designated by SEWRPC through the 2035 Plan as being fit for future development, a developer proposes a development and the county, reflecting on the Holy 2035 Plan, approves it. The issue here is that the subjective plan was put into place by an organization who has no elected authority over the township, the county, and the citizens.

The process in rife with contradiction, but one constant remains: SEWRPC is in charge. They are a government body, not directly elected but somehow still in charge. They are granted tax dollars and then they maintain the growth plans for the county that falls under their oversight. The county feels obligated to SEWRPC and generally votes to approve anything suggested by SEWRPC even though the officials at the county level are elected democratically to serve their constituents and not simply bend to the whims of their SEWRPC overlords. This is the conflict.

Do you suppose a professional developer who owns large parcels of land that he wishes to someday develop is aware of this? Do you suppose a developer is keen enough to quietly lobby SEWRPC in hopes that they’ll see his development vision and allow for it in their master plan?  If we were naive, we might think this not to be a possibility. But we’re smart, because we’re learning, and we know better. The county is run by SEWRPC, by officials who were not democratically elected yet still, somehow, dictate to us what our county should and will look like in the coming years.

SEWRPC recommends certain development in certain areas based largely on their population and demographic projections (FYI- I’m discussing primary neighborhoods here and rarely, if ever, lake access type properties in the Lake Geneva vacation home segment). These are just that- projections-  guesses made based on seemingly good faith that are viewed as infallible truths by the counties that bend and sway to SEWRPC and their holy whims. Most of the development goals for Walworth County were set based on estimates of population growth. Let’s look back and fact check SEWRPC to see just how accurate they have been.

In 2010  the population of Walworth County was 102,228.  SEWPRC, in 2010 produced the arbitrary 2035 Walworth County Master Plan. No word if it was printed at a press or handed down directly at Mount Sinai. That plan made growth predictions for Walworth County, with three different projections for High Growth, Medium Growth, and Low Growth. Most of the development guidelines in the cumbersome, holy document were based off of the Medium Growth predictions.  SEWPRC projected that the 2015 population of Walworth County would be 109,800 (High), 106,800 (Medium), or 104,800 (low). This was the growth map that the county adopted in 2010, and it is because of  this assumed growth that the county has been approving subdivisions.

So how did our dictates at SEWRPC do in their estimates? How accurately did they forecast Walworth County growth?   Walworth County population is currently estimated to be 103,527.  Those at SEWRPC overshot all of their estimates, even their low estimate.   How did they miss the mark so badly? Well, in part, because they failed to read their own report. Walworth County’s population is aging more rapidly than the surrounding counties. They reported this but they cannot fathom the reason. Walworth County chimes in and suggests that the reason we haven’t grown is because we don’t have enough vinyl ranch homes on the market.

The reason Walworth County isn’t growing in full time population has everything to do with demographic trends. Millenniums are moving to cities and staying put. Gen Xer’s did the same thing. The jobs available to full time residents here are dominated by those in the hospitality and tourism industries, because that’s where this county’s bread is buttered. How would I know this? How would I claim to understand Walworth County’s demographic trends? Because I’m a 37 year old kid who grew up here and watched his friends move away to big cities where corner coffee shops and jobs awaited them.  But this isn’t about me or my friends, this is about my county and the problem with following the guidelines of an organization that has demonstrably missed the mark.  Why then, if we already know the 2035 plan is falling short of the initial population projections, should we continue to adhere to it without a thorough revision?

We shouldn’t, of course. SEWRPC should have no control over us. Why would we allow un-elected officials to create and impose growth plans for our towns and villages? Why should we sit here and quietly absorb blow after blow to our county’s legacy by a group who cannot even predict growth over five years, let alone 20?  Shouldn’t we question a group that presented “VISION 2050”  when they’ve already been proven discredited after failing to correctly see VISION 2015? If you share my concern, email the following and tell them Walworth County shouldn’t be beholden to an organization that has failed to accurately predict growth and should, as a result, no longer dictate which farm fields get turned into empty subdivisions.

 

mcotter@co.walworth.wi.us

soldenburg@co.walworth.wi.us

lurm@co.walworth.wi.us

shaydin@co.walworth.wi.us

Information deemed reliable but not guaranteed.

Sounding Winter

Sounding Winter

I can see the cold of this winter through the window in my house. All of the windows face this cold, but one window in the living room is the window I’ve chosen to look out of more than the others. This is a very fine window. It’s white and it’s wide, facing the cold and the snow and the pencil drawn tree line in the distance. I looked out this window a few days ago, at the dull of the sky and the honed white ground, and I decided I should go outside.

I knew it was cold out by the way the birds chattered about on the feeder. They weren’t lazily pecking at the suet like they would in the summer months, rather they flew up quickly and pecked quickly and then flew back, quickly. Where they flew to I cannot be certain. I guessed that it would be just as cold where they flew to as it is at the feeder that they nervously and hurriedly pecked at. They like the sunflower seeds more than the other seeds, so much so that they whole field of sunflowers I had planted and left to whither on their stalks have been pecked clean of their seeds. The birds did this, ruthlessly and efficiently,  and they’re cold no matter where they fly. They can’t escape it. It’s too late now to try to fly south.

The snow was crunchy under my boots, which wasn’t a surprise. It’s always crunchy. When walking outside in the winter, it’s the crunch that we’ve come to expect, and so I, too, expected to step and crunch, crunch and step.  I walked over to the pile of wood. What a magnificent pile of wood it is, oak and walnut and wild cherry.  I had expected that I would chop so much wood on that day, that I would take up my axe and swing it until I could swing it no more. I thought I would reduce that messy pile of wood to a neatly stack.  At first, I swung with vigor, my hands and face cold, the birds watching from the brush, my boots shifting with each swing, crushing the clean, white snow.

I carried on for some time, but really for no time at all. It was cold. Through that window I could see the warmth of the inside, the glow of the fire reflecting and dancing and teasing me.  I steadied my swing, and aimed and swung, the blade wedging through some pieces with ease, while other pieces were more belligerent and refused to yield, no matter how hard I swung, or how true my aim. I was colder, still.

I paused to listen, to hear the sounds of winter, to look towards that window and then away from it, to the sky and to the brush and the brown scrabbled tree line where the birds hid from my view. It was silent. My breath puffed into the air like I was smoking the finest cigar on the warmest island beach. There was no wind in the air that day, no rustling of leaves for they’ve all fallen and been hidden under so much new snow. The trees were still, painted that way, and birds that sing so loudly and happily in the summer made no sound, none at all.   I looked back to the house, to that window where the television played and the fire crackled. Where my kids argued and my wife read. I stood still enough and long enough to listen to the sounds of a Wisconsin winter. What did it sound like? It sounded like nothing, like nothing at all.

 

2015 Abbey Springs Market Review

2015 Abbey Springs Market Review

If we had our druthers, we’d be Abbey Springs. That’s assuming we weren’t we, but we were in fact a large association of homes and condominiums. If that’s who we were, we’d do so very well to be Abbey Springs. We’d laugh at our friends, presumably they’d be other large associations as well, because we, as a large association, wouldn’t consider hanging out with smaller, lesser associations. We’d have our friends, those bloated associations just like us, and we’d sit around and talk about life, about associationy things.  We’d laugh about people who stand up and complain about dues, and we’d laugh about the association presidents who desired, for one reason or many others, to be an association president. We would have fun being this massive association, because if we were Abbey Springs we’d be revered among our peers.

That’s because Abbey Springs just is. It’s just the way it is, the way it’s been, and those ways have found reasonably routine favor with the vacation home buying masses that smartly find their way to Walworth County.  In the way that Geneva National has been sexy at times because of its feast or famine nature, Abbey Springs has just existed.  There was a blip when the association decided to spend trillions (millions) of dollars and update the facilities and grounds. That was a battle and in that there was some sizzle. But otherwise, Abbey Springs is just a 592 unit association on the southern shore of Geneva Lake that plods along without a whole lot of market adversity.

When times were really good, in 2006, Abbey Springs sold 28 total units. Of that mix of single family and condominium properties, just one closed under $200k and four closed over $794k, including one at $1.3MM. That was one heck of a year.  When the market re-set in late 2008, what followed was an adjustment that was necessary and needed. Prices corrected, volume slowed, and what wasn’t well known was how deep and how long this particular correction would endure. While Geneva National muddled along in those rough years, Abbey Springs jus sort of was.  There were 17 sales in 2010, 14 in 2011, 17 in 2012, and 22 in 2013. Abbey Springs, even though prices corrected and volume dropped, fared as well as any large association ever has.

2015 was a very good year for Abbey Springs, but it wasn’t remarkable, nor was it special. It was just a year and Abbey Springs was just Abbey Springs. There were 22 units sold last year, with five of those printing over $500k and seven closing under $200k.  In 2014, there were 20 sales, in 2013, 22. This is a pattern of normalcy at Abbey Springs, and the association should be rather proud of itself for producing such a steady and consistent flow of transactions. Geneva National should be envious of that stability (though Geneva National had a fantastic 2015).

While it’s understood that $300-500k buys a pretty nice condo in Abbey Springs, and that $450k-$900k buys a pretty nice house (including one on Saint Andrews that I sold last fall for $746k), the unique part of Abbey Springs is the lower end segment that thrives. If you came to the lake with $200k to spend on a vacation home, I applaud your sense of purpose. Many in that range would opt for a smaller, lesser lake, where they could buy a similarly small, lesser property. This would be their mistake. Abbey Springs will gladly take your $200k and offer you a small condominium with full access to the unrivaled Abbey Springs amenities, which include, as a reminder, the following: Indoor pool, outdoor pool, restaurants, sand beach, basketball courts, tennis courts, exercise facilities, racquet ball court, game room, in/out service, pier system, and 18 hole golf course.

If you’re looking for a vacation home here, and you’re amenity oriented, there’s nothing like Abbey Springs. The market is sound, the volume predictable, the prices easy to understand. 2016 should be a repeat of 2015, which was a repeat of 2014, which, oddly enough, was a repeat of 2013. Expect around 20 sales here, with stable prices. Low interest rates should encourage buyers, and left over buyers from 2015 should be pleased to find new spring inventory coming to the market this month and the next. If we were Abbey Springs, we’d be awfully proud of ourselves, but we’d try to keep it to ourselves for fear of coming across as too smug.

2015 Geneva Lakefront Market Review

2015 Geneva Lakefront Market Review

The real estate market in 2006 was not yet aware of the trouble that awaited it. I, too, was not aware.  The lakefront market on Geneva was firing on all cylinders, performing well on a high octane mix of low inventory and high enthusiasm. The market was on fire. That year, we sold 19 true lakefront homes on Geneva Lake. That was a nice year, though I admit at the time I was less involved in the lakefront market than I was in the whatever-I-could-sell-market. That’s because I was paying my dues, which gave me the education that I appreciate today. Experience is not gained in times of excess, it’s gained when you’re hungry. 2006, 19 lakefront homes.

In 2015, we sold 33 lakefront homes on Geneva Lake. I say we, because the market did that, though I had a less than starring role in those sales. I wrote lots of offers, fielded many more, but when the dust settled I had only sold four lakefront homes. Only a few select agents can boast that sort of tally for 2015, and I am pleased to be one of them, though I felt better in 2014 when I was the top agent by so many millions that the next closest agent wasn’t close at all. Anyway, the sales.  What a year it was.

It was an unrivaled, record year for sales, sure, but it was also a year where the lakefront market changed. It changed because of new players in the market, players that have told us they’re experts, but haven’t proven it. A rhetorical question this morning: If you take a beat up 1991 Chevy Impala and put it in the shiny showroom of a Porsche dealer, what does the car become?  In real life, we know that Chevy is still a Chevy, but in real estate, a Chevy that is pushed into a Porsche dealer is, inexplicably, advertised as a Porsche.  But it wasn’t only new players who told us of their expertise, it was a year of a new model.

Auctions reared their MUST SELL NOW heads in 2015, and Lake Geneva featured at least three auctions on our hallowed waterfront.  The first was an auction on Geneva Oaks Trail, one of a house worth somewhere under $5MM. The house sold for a number that, once fees were paid, exceeded $5.5MM. On that momentum, two more auctions were scheduled. One auction would be at Stone Manor, the other of a home immediately to the North with a  shared pier. The home sold, the Stone Manor residence did not. Auctions, if you just started paying attention, batted 2 for 3, which, if you batted that over your career, would give you three more votes for the Hall than Ken Griffey Junior received.

But 2 for 3 is deceiving, because sometimes you can dribble the ball off the end of the bat and reach first. Other times, you can squeak one past the third baseman, and I know this because of my handful of career little league hits I count both in my repertoire. The two auction homes sold, sure, but to whom? Where did these elusive lakefront buyers come from? Were they dredged up through the slick ads and drone photography? Were they tempted by the shiny signs that pointed the way?  Of course not. Both buyers were buyers who were already in the market. They were already interested in a lakefront home. They were buyers who likely would have bought no matter the vehicle used to complete the sale. Auctions in 2015 looked exciting, but they were boring, providing more seller risk than is worth the market reward.

One lakefront (pier 511) sold as a For Sale By Owner. This was an interesting decision by this seller, as most sellers of lakefront homes have no interest in fielding phone calls from gawkers and buyers and agents, like, all wishing for some sort of angle.  The property ultimately sold, as it should have because it was pretty interesting in the mid $4s, but it sold via an agent who brought in the buyer.  The seller paid nearly a full commission on this deal, and handled the annoyances of the transaction personally. Did the buyer show up at the property because the buyer found out about the listing in some rare way, through some shiny ad in some large glossy? Don’t be silly. The buyer was another lakefront owner who was playing musical homes, which is, as a point of fact, the favorite game of local Realtors.   The buyer of that home sold his lakefront home to a neighbor.

Of the other 30 homes that sold, most sales made sense, but not all. There was a heavy sale of a house on a cliff in Fontana, north of $5MM. A few other sales here and there were excessive, but most did make sense. A nice price for around 100′ of frontage and a reasonably fair house hovered between $1.95 and $2.65MM all year, and that’s a fine range to win lakefront ownership. 2014 ended with an average price per foot of lakefront nestled at $21,144. 2015 ended at $25,161.  Those here who love to explain how data works would tell you that lakefront prices rose 20%. They’d tell you that it was such a hot year that if you didn’t buy you made a huge mistake! But they’d be wrong on all fronts.

The lakefront market did appreciate in 2015, as it’s likely to do some in 2016, but it didn’t move 20%. It might have moved 5%. Might have. But it didn’t move 20% just because we sold some expensive lakefront homes that skewed our averages higher. Want to know what raw lakefront is worth right now? Somewhere around $22,500 per foot. How can I tell you that, when the average shows a much higher number? Because data only makes sense when you understand the context.

2016 should be more of the same, with moderate price increases but no where near the amount of volume. Prior years had us closer to 20 lakefront homes sold, and I expect we’ll fall somewhere around 22-24 total lakefront sales in 2016. The South Shore Club won’t be there providing loads of liquidity, and the entry level lakefront likely won’t have the heavy inventory that it had last year. We enter the year now with a few lakefronts under contract, including my buyer on the Lackey Lane property listed in the mid $4s, and a buyers on a two small lakefronts in Williams Bay.  There’s a deal on the large tear down in Williams Bay listed in the high $3s (another buyer that would likely have done better to explore the built inventory in the $6-8 range rather than build new).  There will be inventory coming, some of it rare and exciting (better call me if you want to know about them before everyone else does). There will be plenty of sales this year, but sellers should glance again at the market indexes before thinking it’s going to be a repeat of 2015.

 

 

Blood Red Markets

Blood Red Markets

Another January morning. Clear pale blue skies, soft low light, index futures off triple digits. It’s been a trend this week, the skies pale blue and the markets in blood red.  It’s alarming, sure. But what does it all mean for the Lake Geneva real estate market? Will this sell-off escalate to such a level that the vacation home market will grind to a halt?  Or will this sell-off be short lived, another 10% correction that is quickly and efficiently erased over the coming weeks and months?  The reason I type in the mornings is because I don’t know the answer to those questions, but I do know that the red start to 2016 will impact the Lake Geneva market.

When markets are oft green, it’s a good thing for our market. This isn’t a surprise to anyone. To understand the stock market and its impact on our housing market, you must understand that people don’t usually buy vacation homes when they feel broke or uneasy. They buy vacation homes when they feel confident, and fiscal confidence is no higher than during a period of inflated paper wealth. Buyers don’t buy just because they have enough liquid wealth to pull off the weekend-changing vacation home purchase. They buy when they feel better about their finances, not just when their liquid finances are better. It’s emotional, this game, and paper wealth inspires confidence in a  way that a 5% pay raise cannot.

This is why there’s a basic chart on my homepage that shows you the price per foot for lakefront homes, and the early January S&P print for that year. When our housing market is up, it’s predictably up on the heels of an increased index. This is just the way it is, and the historical perspective proves the point. When buyers feel good about their position in life, they buy. When they feel uncertain, they stand pat.  This isn’t always a smart idea, as the only economy that really matters is your personal economy. In 2011, when the housing market was feeling an intense amount of pain and uncertainly was everywhere, I sold a lot of lakefront homes. Why? Well, silly, because the buyers felt their own personal economy justified such a life-improving purchase. That’s why.

The benefit of an early red start to this year is a benefit that buyers will feel. Any seller paying attention should see these worrisome signs and adjust their bull thinking. If an autumn 2015 seller thought his $2.5MM house was worth $3MM, perhaps a few days of bloody red ink will make her think it’s really only worth $2.75MM. It’s still high, of course, but it’s not as high. January is the month where Lake Geneva adds much of its spring inventory, which makes prices this month exceptionally important.  If all the numbers come out too high, that’ll set the tone for a slow spring season, excepting the irrational buyers that might work with other brokers who cheerlead them into submission.  If the listing numbers come out a bit more subdued as a result of this rough start to the year, our spring housing market will be the beneficiary.

Mortgage applications for the last two weeks of December fell dramatically. Housing bears will look at this and say “see, I told you, the housing market is weak and couldn’t even withstand a teensy, tiny rate increase”. This is absurd.  In 2014, I was blessed with $37MM in sales. What a tremendous year that was. In 2015, I was blessed with only $19MM in sales.  Does this mean my business is crumbling because I sold only a little more than half of my previous year total? Of course not, it just means in 2014 I put lots of buyers in lakefront homes, and I entered 2015 with a bunch of happy homeowners who were no longer hunger house hunters.  The last two weeks of December was slow for mortgage brokers because the first two weeks (ahead of the rate increase) were so busy. When a car dealer puts a sale on for the last week of June, do you think the first week of July is particularly busy?

2015 Lake Geneva Lake Access Market Review

2015 Lake Geneva Lake Access Market Review

The real estate market in 2011 was pretty bad. It was fun, if bad, because sellers wanted to sell and buyers, though fewer than now, wanted to buy. It was a great year, and the Lake Geneva markets functioned as they should. Few buyers, few sellers, plenty of motivation for both sides. What’s not well understood now is that the market is no longer healing. It’s no longer mending. It’s no longer about to be something. It is something. It’s already there. It’s four full years into this new housing boom. To suggest that the recovery is somehow nascent is to either misunderstand the word or the markets, possibly both.

The lake access market on Geneva had a most terrific 2015.   2014 was similarly good, and in that year we sold 61 single family lake access homes near Geneva Lake. This year just ended we sold 70, making the good of 2014 look small and weak compared to the splendor of 2015. Both years saw activity in all segments, as the woes of individual off-lake segments have long been left in the dust of 2011 and 2012.   Both years experienced their share of anomalies, with 2014 printing a parkway home in the $1.5MM range and 2015 trading a Knollwood house for $2.2MM. Outliers they are, but still proof of a market truth: Shiny sells, if the implementer of the shiny is willing to take a bath on their shiny bad investment.

Proving that Lake Geneva can indeed be a market for the masses, we sold 17 lake access homes under $250k in 2015. I would have expected that number to be higher, as interest rates hovered at their lowest levels since Cain asked Abel for a short term loan to buy a very heavy rock, and this market should be especially sensitive to interest rates.  We sold another 48 lake access homes priced between $250k and $1MM.

Of interest in this meat and potato portion of our off-lake market is that two parkway homes in Cedar Point sold just under $1MM. For those who were not feverishly watching this market in the early and mid 2000s, you cannot appreciate the spectacle that is two parkway sales in one calendar year. For a while, during the escalation years of the prior cycle, Parkway homes were mythical. They were sometimes available, most of the time not. They were rare. To catch a glimpse of one on the open market was akin to a Yeti sighting, or to Tim Allen actually vacationing in Michigan. They were elusive, and they were desirable and the market loved them. That affection has returned, and prices up to and just over one million dollars is a reasonable ransom for such a rare property.

In that segment there are two other market tales, both sad tales, sure, but both telling an obvious market story. In 2007, a large log-ish home in Somerset came to market for $1.1MM. Two years later, it was raised to $1.295MM. The years that followed featured a vast array of For Sale signs in the front lawn, including a stint where my sign was there. The price dropped and dropped, as the market didn’t particularly enjoy an off-water home that lacked a slip but did possess a $20k property tax bill. In 2015, the home finally sold. For $600k. The heat of the last three years of bull market didn’t touch that property until last summer, and at $600k one could hardly suspect the transaction gave the seller any warm feelings.

Another sale that tells a similar story, but on the other side of the lake. It is no secret that the Lake Geneva Club is one of my favorite lake access associations. I like the street, I like the feel, I like the aesthetic. A home came to market there in 2007 for $829k, hoping to ride the coattails of a sale I had just closed for $790k in the same association. My sale was of a cottage one home from the lake, this offering was much, much farther away from that water epicenter.  This property came to market at various prices over recent years, on and off again, under contract at least once, then back to market after a failed deal. That home mercifully sold last summer for $500k. What was it likely worth in 2007 when it listed for $829k? Around $500k.  Medicine is often best taken quickly and without hesitation, because the longer you dwell on the smell and texture the less likely you will be to swallow it.

I’m not sure how I feel about 2016 in this segment. In theory,  market returns for 2015 will not make anyone feel particularly paper rich, especially if they went long TWTR with me in April. Interest rates will be rising, sure, but slowly, and anyone with any historical perspective will not be too upset by 4.75% interest rates. I expect the market to remain solid, and there will be outliers in 2016 just as there have been in recent years. Brokers love to whip markets into a frenzy, and all it takes is some shiny photographs of a Wolf stove and voila, some naive buyer will pay a lakefront price for a lake access home. Want to avoid that sort of amateurish buying behavior? Work with me, because I know the difference between an outlier and value.

Happy New Year

Happy New Year

Some day, I might stay up late enough to greet the new year in the company of family and friends. Some day, I might celebrate the year that just ended by toasting the one just arrived. Some day, I’ll be able to enjoy the wins a bit more. But for now, I’ll keep looking forward to that some day. It’s a new year, and a new chance.  Happy New Year from Lake Geneva.  2016 holds much promise, both for the housing markets here and for the community, and for each of us. I’m looking forward to it, and I’ll be here to help if your 2016 needs a hefty dose of Lake Geneva.

2015 Lakefront Condo Year In Review

2015 Lakefront Condo Year In Review

I’m just going to say that it makes sense. It makes sense that the lakefront condo market remains stuck in neutral. It doesn’t make sense because of some large demographic shift, and it doesn’t make sense because of some market dynamic that isn’t explainable. It makes sense because entry level lakefront homes are also stuck in neutral, and as long as prices on the low range of the lakefront market remain soft, there’s no reason that the lakefront condo market should succeed.

The thinking here follows very simple principles of market demand, and the reactionary pricing that exists when one market is closely tied to another. If a buyer can spend $600k on a lakefront condo, that’s tremendous. There are many buyers that would find that to be their upper limit, which is a lofty limit by any standard. But many in that range can sneak upwards, they can reach to $1MM, or $1.1MM, maybe even $1.2MM. If they could spend $600k easily but $1.1MM with a stretch, that’s the sort of buyer that would generally be well served to stretch to private frontage, and that’s likely what’s been happening within the lakefront condo market. It isn’t that there aren’t buyers, it’s just that the buyers are being tempted by single family homes that are competing for their vacation loving dollars.

It’s not just lakefront, mind you, it’s off-water single family stealing the condominiums’ thunder as well. If you could spend $550k for a lakefront condo with a slip, I like that idea. But what if you wanted a yard of your own because your dog is super obnoxious and you don’t want to bother condominium neighbors? Well, then you could drive down some road here and find a lake access cottage with a slip for similar dollars. The condo market isn’t flawed, and it isn’t dying, it’s just facing stiff competition.

In 2015, nine lakefront condominiums sold per our MLS. That’s a nice number, and it included condominiums of all shapes and sizes. Someone paid just $187k for a one bedroom lakefront condo at Fontana Shores, and a customer of mine paid $1.195MM for a fabulous lakefront condo at Eastbank with finely appointed finishes and furnishings, a lake view and a canopied boatslip. Other notable sales this year included a couple at Vista Del Lago, a couple at Fontana Shores (including one I sold for $335,500), one at Bay Colony, and a couple at Geneva Towers. It should be noted that one developer’s plan to upgrade Geneva Towers into a building bursting with $1MM+ condominiums didn’t really work as planned. They sold some units, but the initial pricing goals were not met.  All in all, it was a fine year for the lakefront condo market on Geneva.

Currently, there are 13 lakefront condos available on Geneva. My fabulous Stone Manor unit is still available in the high $5s, and my lovely two bedroom condo at the Fontana Club remains unsold in the high $400k range. The market is light on inventory at the moment, which is a good thing. The lakefront condo market functions at its absolute best when the inventory is limited. Too many units available in any one condo development and the market senses trouble, even when there is none. If we can keep the inventory total down in 2016, I’m expecting a similar year to 2015.

Low interest rates should provide plenty of fuel for continued condo sales. Remember, 2014 boasted 11 lakefront condo sales on Geneva, so our 2015 total is sagging behind a bit. I think 2016 will be more in line with 2015, as the market absorbs the remaining aged inventory at somewhat discounted prices. If you’re a $500k buyer and you want your own yard so your horribly loud dogs can bark away, I understand. But if you’re a $500k type buyer and you just want an easy place to hang your hat on the weekends, the condo market deserves a look.

Sleet

Sleet

The woman is running. She’s running on the other side of the street. The sidewalk. She’s running from East to West, but I haven’t been here long enough to know if she has already completed to West to East part. She might have just started, but she’s running and she’s winded and she’s running up hill. She’s not really running, she’s skipping, she’s skipping. Her knees lift up high with each skip, and it’s as though she’s running more vertically than horizontally, but she’s moving forward and she’s running, though it’s really a skip.

She doesn’t want to run like this, but she must. It’s sleeting now, and the sleet has made the sidewalk slippery, made the road slippery, made everything so slippery. She’s out of view now, up the road somewhere to the West, skipping with those high kicks, wondering why she decided to go for a run that turned into a skip on this day when the rain turned to sleet and the sleet never turned to snow.

I wished for a white Christmas, I did. I know it’s nice to have fifty degree winter days, but I also know that my kids wish for snow, and so I wish for it on their behalf. I wanted it to snow, as did so many others.  A white Christmas, that’s all I really wanted. But it didn’t happen for us, no matter how we wished, and so this morning it’s sleeting and it’s sort of white and that lady is skipping somewhere up Geneva Street.

In the summer, the farmers wish for rain. Their fields dry and their corn withers. The ground cracks open to show its dry contents, like a beggar turning his pockets inside out to show you that he truly has nothing, nothing at all. The farmers till their dust, and inspect their drying and dried crops. They shake their fists and pray for rain, while others quietly hang their heads in desperation and pray.  They need rain, just a bit, just a light drizzle that lasts a day, or a downpour that lasts all night. They need the rain and they wish and they pray and they beg. The corn wilts, the beans sag, the lines in the farmers faces grow as deep and wide as the cracks in the soil.

The lady is back now, skipping. She cautiously ran down the hill, now she’s skipping back up it. She’s wishing it would stop sleeting, but it won’t. It’s going to sleet some more, then it’s going to rain, and the kids are wishing for snow. The farmers are wishing for rain. No one is wishing for sleet.

The New Game

The New Game

There’s something changing in the Lake Geneva real estate market. The change is mostly involving the lakefront market, but there’s little doubt that this change will make its way through the different segments, eventually engulfing everything, everyone.  The change is subtle to the casual onlookers, but it’s game changing for the players in the market, both buyers, sellers, and agents, alike. When something is described as game-changing, that usually reflects positive change. Like, this new phone/device/tablet/thing is game changing! But in this case, it’s game changing in the way that it makes losers out of us all.

The new rules of real estate are not at all like the old rules. The old rules involved some decorum, some particular process that was generally respected by those in the business. Real estate has always been cutthroat, as is most commission based business where the barrier to entry is the skill that is a continuous but methodical pulse. The business will never cease to be that way. Even as Redfin, Opendoor, and others have tried to change the old commission method with new technology, it’s obvious now that the model preferred by the consumer and agents alike is the old format of commission for results.

In this hunt for results, the new model has taken sellers and agents to extreme levels. Sellers, under the old model, would interview the agents that they thought gave them the best chance at selling. Sometimes, this agent was their sister’s hairdresser, or the lady who they know from the PTA. This wasn’t generally the best way to find an agent, but it worked and it worked for decades, for generations. Today, sellers in competitive markets interview agents, but mum is no longer the word.

Sellers interview, then sellers play hard to get. This is fun for the seller. The result of playing hard to get is a bidding process by the agents who know of the property.  The first time in the door, for that initial meeting, the agent told the seller the home was worth $3MM. The agent knew it would be easier to sell at $2.65MM, but she came in high, because the business is important. The seller fields these initial numbers, then goes quiet. Then, after some quiet, he tells the agents that he’d consider selling if he was able to get $3.4MM. The agents think, ponder, call back. They have someone interested.

Because they always have someone interested. I have someone interested, usually. At $3.4MM it’s no longer any representative of market value, but it’s a price and it’s a lakefront and that’s the game.  Agents looking to make a name for themselves, or further a name they already own, will pounce at the opportunity to list high and sell, maybe someday much, much later.  But the seller won’t list, and so the calls resume, and the agents tell the seller that it’s time to sell, for $3.5MM, maybe. Or perhaps it’s $3.6MM that will make this deal happen. The negotiations are between the seller and the agent, and in a market that some incorrectly perceive to be torrid, the price is always driven higher.

Without committing to an agent, the seller thinks he has many agents working for him, when in fact, the agents are working only for themselves. If they have a buyer, one that might think $3.5MM is a reasonable ransom for a $2.65MM house, they’ll bring the buyer to the door. They’ll show the house, and they’ll try like crazy to tell the buyer it’s the right house at the right time, because hurry! If they don’t buy it someone else will. This is the refrain of the ignorant, unless it is employed only when the case dictates such a sensationalized phrase. If your agent tells you this every time, you need a new agent.

The seller is at a disadvantage in this scenario, because he truly has no one representing his best interests in the sales process. He is flying blind, and by the time he does ultimately list, the bloom is off the rose and the market has already heard of his property, and they’ve already dismissed it as being overpriced, ugly, and bad. The traditional model would have better served this seller, if he had only chosen an agent, listed the home, and marketed effectively without first crying wolf at those artificially, agent-inflated numbers.

While the seller is making a mistake, because he thinks, erroneously, that he’ll be saving money, it truly is the buyer who is making the worst decision here. Buyers put their trust in agents, and the idea is that the agent is serving the buyer’s best interests in all of their advice. I effort daily to follow this, and I’ve talked myself out of far more deals than I’ve ever talked anyone into. But if the agent has the goal of selling the house quickly and quietly, before the market can even know of the property, has the buyer been receiving the sort of objective information that she should be entitled to? Highly doubtful. But this is the new game, and the new game isn’t engineered to serve the buyer or the seller, it’s engineered to serve the agent. In that, there should be concern, because the game has changed and it’s changed at the expense of the consumer.

For now, this: Merry Christmas. I’ll be back on this small keyboard on Monday, though I’ll be working this weekend should you require some assistance. Ideally, you won’t require assistance on Christmas Eve or Christmas Day, but Boxing Day is an embarrassing Canadian Holiday and I take pleasure in working while Canadians rest.

Christmas In Nashville

Christmas In Nashville

A Nashville Christmas sounds terrible to me. I feel like I’ve seen snippets of these Nashville Christmases, though the image in my mind of Kenny Rogers riding in a sleigh, wearing a Christmas sweater and smiling, that might just be something I imagined without having ever actually seen it.  I picture a country farm, with bright lights in the trees and large horses plodding through the fresh white snow. I picture the Nashville Country Christmas appearing on screen, lit as with twinkling white lights, and I see Kenny singing with his friends, Dolly and Reba, those sorts.  I don’t know if this has ever happened, but everything I know about television, Nashville, and country music stars of a certain age tells me it has.

But it’s all a lie, that Nashville Christmas.  It doesn’t snow like that in Nashville. The horses down there would freak out if it did, because they also know that the snow is fake, not for them, not for Nashville. It’s for television, like Dolly’s puffed lips and Kenny’s new chin, and that sleigh isn’t a sleigh at all but rather a stage prop that will now immediately and dangerously crumble after being exposed to so much fake snow. Those lights aren’t really that bright, it’s the lens on the camera, made to blur them into a twinkle so we don’t notice Dolly’s exposed skin. And that singing, it can’t be real because it’s too good, and why is Kenny talking to Dolly while they’re singing? Who told Reba she could even be there?

The hot chocolate isn’t necessary, not at all. It’s 61 degrees as of that filming, and no one has ever gladly drank hot chocolate when it’s 61 degrees outside. Little kids wouldn’t even do that, and we know Kenny and Dolly can’t taste anything anymore, the injections long ago killed off that sensory staple.  Why is Reba wearing those black jeans, and why doesn’t she look like Reba anymore? Who told the horse to stop neighing?

This whole thing is crap, really. I can see behind that barn and there’s green grass. It’s mostly brown, but there’s some green in it and a stage hand smoking a cigarette. And why do the carolers have rosy cheeks? Why are they sweating so profusely in those winter jackets? Why is the one kid drinking from a gatorade bottle instead of from the hot chocolate mug? There’s no way that’s hot chocolate, because it’s 61 degrees outside and those horses are jostling the sleigh around so much that any chocolate would have already spilled all over Kenny’s Christmas sweater. Reba is standing now, crouching a bit in the way that singers of a certain age crouch when they sing. She’s singing Let’s Give Them Something To Talk About, but it’s set to the tune of Jingle Bells and neither of those songs are hers.

Christmas in Nashville has been a huge disappointment.  I prefer Christmas in Lake Geneva, but it’s raining here now and the trees are budding and it’s only a matter of time before that Magnolia tree on Geneva Street shows its bright, gaudy blossoms.  If I wanted a rainy Christmas I’d move to Nashville, because I know that’s what it does there and this television special I’m not sure I’ve ever seen was probably filmed in Wisconsin.

Pikewood Estate

Pikewood Estate

My grandmother was not necessarily a memorable fashionista. The was too old by the time I was old enough to recognize style, and by then I recognized that she veered towards the loud, and the sparkly. She wore bright red lipstick often, and later in life she would generously apply it in the general area of her very old lips. She was a lovely woman, but she was not a style maker. This is why it was curious that her favorite house on the lake was the understated Pikewood Estate on Pebble Point.

Pier 162 was never the loudest house on the lake. In fact, it looked under built compared to the behemoths both of very old and of very recent. The house was built in 1923 for the family of a barbed wire magnate, which, coincidentally enough is something that I’ll be buying a lot of in the coming years (see here). Later, it was owned by the well known Goes family, of Chicago. It was a classic home, perched confidently in the deep woods of pebble point, with 181′ of level frontage and a view to Black Point, Majestic, and beyond. It was a fantastic house, one that my grandmother admitted often was her favorite house on the lake.

Pikewood Gardens
Hardscape and Perennial Gardens

The original Pikewood home went the way that so many of the old builds; it fell to the wrecking ball. Neglected over many decades, the home had fallen into ill repair and needed either massive restoration work, or it needed to be removed from the estate. In that sentence there is a not so obvious truth- the estate of Pikewood remains, it’s just the house that has been torn down.

The driveway for Pikewood used to be as understated as the house that graced the lakefront. It was gravel, boring, dippy and rough. On a section of the lake that houses some of the most prestigious lakefront homes ever built here, this driveway was out of place. So the current owner took to building a proper entry, with proper landscaping, and stone walls crafted by artisans to reflect the walls of the original era.  Earth was moved, dead trees were cut down, new trees were planted. Grass was made to grow by the irrigation that was installed. The property, over the past three years, has been the focus of significant and meaningful restoration. But the restoration and revitalization of this property has been focused on the landscaping, on the site, on the estate itself.

The site, all 181 level feet, all four wooded acres, rests just to the East of Pebble Point. On one side, the magnificent home that is reminiscent of Frank Lloyd Wright’s famed Falling Waters , on the other, an incredibly beautiful dutch colonial that was built just a few years ago. Behind, off the lake, a huge tract of deep woods where a conservation project is underway to restore those woods to their natural glory. This site is insulated from some of the things that plague other sites. High density nearby, there’s none of that. Associations within ear shot, of course not. Just beautiful land that has been remarkably improved over recent years. And by now you’ve guessed it, Pikewood is for sale.

 

Four Acres of Manicured Gardens
Four Acres of Manicured Gardens

But it hasn’t been without much deliberation. The owner purchased this property years ago with the intent of building his lakefront masterpiece. That is why the impeccable landscaping was done. The bridges were built of stone by meticulous masons. The site designs were completed, the engineering done. Permits were applied for and received, irrigation was installed. Landscape lighting, too. The septic field was installed, subtly, out of the way, where it needed to go. Trees were cleared, and the stream were cleaned. This is a site that has been the subject of intensive work, and now that the work is done, it’s time for someone to build a home here.

This lake likes to sell expensive parcels of land. The Basswood sale for $3.95MM just this fall is a prime example.  What the buyers of tear down homes fail to understand is the actual cost of undertaking a new build on a lakefront lot. The math, in the minds of those who wish to build, is erroneously simple. Buy the lot for $4MM. Build a 5000 square foot house for $2MM. All in for $6MM. If only it were that simple. The soft costs, or those costs that are poured into a property before the first footing is poured, those are the costs that eat up budgets and make a $6MM build a $7MM build. This site is available today, on the open market for the first time in what feels like forever, and those soft costs are already absorbed by the current owner. What’s left to do now is take one of our included construction plans (by Scott Lowell), and build a house.

The property is, by many miles, the best parcel available on Geneva Lake. Other properties have too many entanglements, or they’re limited by the presence of an existing house that’s somehow too good to immediately tear down, and not good enough to actually want to live in. This site has been readied for construction, and the new owner gets the benefit of some $700k in soft costs that have already brought a raw property up to this polished position in the market. The ask is $4,475,000. If my grandmother were still alive, and if she had the money, I would have already had this estate sold.

Geneva Won’t Ice Up

Geneva Won’t Ice Up

I must  apologize for being so preoccupied over recent days. It was one week ago today when I glanced at the Lake Geneva Regional News and first learned that the Walworth Town Planning Commission had voted 5-0 to approve a conceptual development plan that would turn the rural town of Walworth into a congested extension Shodeen Development Group’s hometown in Kane County. The vote was taken without a single peep of community involvement, without a single shred of evidence that shows how egregious the initial mistake was, and without a single concern for upholding the zoning laws of this county. I’ve been fighting it ever since, and the portion of my brain that thinks of things to write about has been as clogged as those proposed streets.  Please continue to share the Ruining of Walworth post with your friends and family and anyone who is concerned about the future of Walworth County. For now, this:

Geneva Lake isn’t going to freeze this year. Even though it is still meteorological fall and not at all yet real winter, it’s late enough in December that the ruling is in. No ice this winter. Geneva Bay might freeze during some cold snap that will assuredly come in January or February, and Williams Bay may ice up to Gage Marine, but the vast majority of this lake will not see ice over this winter. You can carve that in stone, though it would be easier to carve it in ice, but as I mentioned, there won’t be any of that lying around.

Geneva has gone iceless a few other times. The 2001-2002 winter never brought us ice.  1997-1998 was an El Nino winter, and we didn’t freeze then, either.  1997 wasn’t that long ago, but I can’t remember a bit of it. I sold real estate that winter, and in the years before this blog and before any pattern of sales, I’d sit in my office and wonder what it was I should do. I wore a shirt and tie then, I tried so hard. There was a boutique next to my office then, and I figured that the men would want something to do while their wives and girlfriends shopped for trinkets. So I spray painted a big piece of plywood with:  “BEARS GAME ON INSIDE”. No one ever came in to watch, and it’s a good thing they didn’t, because my television was an old tube TV and the reception was scratchy. How embarrassing that entire winter was, both for me, and for ice.

The 2001-2002 winter is one that I can’t remember, either. I was recently married then, and 9-11 had just occurred and left us preoccupied with thoughts of war and revenge, with scenes of burning buildings and horror. I don’t remember doing anything special that winter, though I do know I went on my honeymoon to Hawaii in September and then in December I surprised my new wife with a vacation to Florida. I know now that I completely ruined any positive response from any spontaneous vacation from then until now, and from now until I die. You can’t take your new wife on vacation in September and then take her again in December, because by February she’s disappointed in you because you didn’t take her to Fiji. This was my error that winter, and the lake never froze.

This winter, it’s not going to freeze either.  The good that comes from this is tangible. There will be far more fish in the lake next summer. The ice fishermen, if not able to drill holes and sit on upside down buckets, won’t be cleaning out hundreds of thousands of panfish as they would in a normal, frozen winter. They won’t be jigging for lake trout and harvesting 100 or more over a winter season. There will be far more fish next year, because the fish will rest this winter, unmolested and free of the baited hook.  As there will be no action on the lake this winter, less trash will end up in the lake. Nothing will get lost in the snow and melt into the lake in early April. The lake will be free of trash and free of fishermen and next summer we’ll be swimming far earlier than normal.

The bad that comes from this is also tangible. Though Geneva doesn’t struggle with weed issues like Delavan and every other lake in the area, it does have seaweed, because it’s a lake. Without ice and snow cover, light reaches those weed beds all winter, and the growth of those weeds never entirely ceases. A thick cover of ice and snow blocks the light, and in a heavy cover winter the seaweed will die, and it will die hard. This year, it won’t, so next summer we’ll be swimming earlier, surrounded by more fish, but also with a few more weeds to contend with.

I’ll look back at this winter in another decade, and I’ll hopefully remember that the ice never came. With any luck, I’ll also remember this winter as the start of when Walworth County took back control of its land, and preserved its farming heritage while beating back the developer’s plow. I hope and pray I can remember this winter fondly.

The Ruining Of Walworth

The Ruining Of Walworth

When will this county stop bowing at the feet of Illinois developers who wish to turn our rural, recreational countryside into an extension of their crowded, congested suburbia? A new week, a new Shodeen development on the front page of the newspaper. A new promise that this development is needed and exciting, that this plan to turn a corn field into a mirror image Hoffman Estates is just what we hayseeds of Walworth Township need. Sadly, the development is none of that and should be unceremoniously and quickly dismissed before the first angry townhall meeting (January 5th, be there) is held.

The development, according to the snippets of information that have been released, is to consist of 120 homes on the North end of Walworth Township. This is intentionally vague, as the real plan likely includes the future development of adjacent lands, bringing the total homes to somewhere between 200-300 new homes (or duplexes, condominiums, etc, this is not for sure, just a common sense opinion based on adjacent lands). The Illinois developers have promised us that this will be a “conservation community”.   They must not realize that we know conservation community is a disingenuous label. It’s a zoning term that implies high density with some paths of grass, but mostly it’s a marketing label that developers use to pacify township boards. If conservation is the goal, then the developer should plant native prairie on the entire parcel and turn it over to the municipality for use as a park. We can walk our dogs there and watch the wildflowers bloom. I’ll donate the first bag of seed. But conservation is never the goal, it’s just a simple buzzword that developers use to placate us simpletons who live in the sticks. It’s also a word that describes a development with horrible clusters of high density, intermixed with some trivial open lands that the developer wasn’t going to be allowed to use anyway.

Shodeen currently has 623 planned units in Delavan Township.  Hundreds more wished for on the south end of Walworth, in Walworth Township, and perhaps thousands in the lush fields south of town in the Big Foot Prairie. (Exactly how many units are going where is uncertain to me.) There’s also the new 18 Townhome development overlooking the post office in Fontana.  But what they say we need is even more development, because, because-  growth! And apparently the rich agricultural fields of Walworth Township is where they think we deserve subdivision after subdivision so we can be indistinguishable from the developers Illinois hometowns.
There’s some odd adherence to a belief that this county needs continual population growth. Why? We live in the country because we love the country. We moved out of the city and into these townships because we wanted our neighbors to be the cows and the roosters and the sunsets over wide fields of corn. We didn’t move to the country to wait for the developers plow to come and provide us with the sort of housing that a Chicago consulting firm determined our planning commissions would likely approve. We didn’t move here so a developer can make millions of dollars while destroying our sweeping countryside views and stealing our quiet with new homes and bulldozing in roads where there previously were none. From 1963 to 2000, 22,971 acres of farm land in Walworth County has been lost to development. Isn’t that enough?

There are many thousands of plotted, vacant lots in this county. Residential Lots, not farmers fields. Actual platted lots in subdivisions that developers dreamt up, petitioned for, aggressively built, and marketed for sale. These subdivisions were needed, the developers said. The demand is palpable, they told us. Really? Please consider the following:

Woodstone 42 “conservation” lots in Linn. Only 10 homes built in the last 10 years. 76% vacant.

Meadowview 35 “conservation” lots in Linn. Only 3 homes built 91% vacant.

Bailey Estates approximately 190 platted lots walk distance to Williams Bay school, city water and sewer. 28 built homes in almost 10 years. 85% vacant.

Whitetail Ridge 25 “conservation” lots in Walworth. 9 built in almost 10 years. 64% vacant.

Cliffs of Fontana. 66 lots in Fontana, walking distance to the lake. 14 built in almost 10 years, no word how many are specs or otherwise unoccupied. 79% vacant.

Walworth Prairie. 69 lots in Walworth, walking distance to school and downtown. 4 built properties, including sales center. 94% vacant.

96 approved units Townhall Road. Previously town of Walworth, annexed to Fontana. Sitting vacant, unbuilt, undeveloped. Just waiting to flood the market with more inventory. 100% vacant.

Darien Ponds. 61 platted lots in Darien, walking distance to town. 9 built homes. 85% vacant.

Prairie View. 98 platted lots, walking distance to Williams Bay school, city water and sewer. 43 built in nearly 10 years. 56% vacant.

Troy Hill Estates.  6 built homes. Today, there are 48 vacant lots. At the current absorption rate, the development should be filled to capacity in the next 48 years.

Sugar Creek Preserve.  52 lots,  10 built homes (including one under construction currently). There are 42 vacant lots that are empty today. The 10 built homes were completed over the past 10 years, which tells us that we have only 42 years left before the vacant lots are filled with happy homeowners.  

The Oaks of Delavan Lake. 16 lots, conservation style. Today, there are 2 homes built. There are 14 vacant lots in this lovely development.  At the torrid absorption rate of 1 home every 4 years, the development should be full of happy homeowners in 56 short years. 

Sharon Green. There are 32 lots in this subdivision, with 3 built homes. Not all is lost, however, as a farmer has been farming the vacant lots and bails of hay now line the single cul-de-sac road, and those hay bails do lend a nice country vibe to the empty subdivision. With 3 homes built in 10 years, it will only be another 96 years before the development is full.

Highfield Glen on Stateline Road (Walworth Township) was proposed in the early 2000s and completed in 2003. That’s just about 13 years ago. It’s a beautiful cul-de-sac, fully wooded, for 100% privacy of both the residents, and the township neighbors. The lots were in demand, they said, and so the town approved a subdivision of 15 lots. Since 2003 there have been 4 homes built. If you know anyone looking for a vacant lot in Walworth Township, there are 11 of them over in Highfield Glen. Two were foreclosed on. Growth is good, except there’s no growth when there are no buyers.

 

Current Town of Walworth Market Statistics: 16 available single family homes per MLS. Average lot size of those 16 homes is 9.64 acres. 

 

And there are many, many others already approved and platting and sitting vacant. This ignores all of the examples in Elkhorn, Lake Geneva, and outlying townships. These figures are approximate, but represent a startling truth. Overdevelopment is an epidemic, and it’s one that our planning commissions have caused by siding with developers rather than the constituents that they were elected to serve.

The zoning boards and neighbors and those in position of some authority felt they needed to comply, because growth, they’ve been told, is good. What they failed to understand is that growth is determined only by demand.  The demand, as evidenced by these examples (there are many more), is no where to be found. We built it, and they didn’t come. And if they didn’t come during the largest housing boom in history, why would they come now on the heels of a soft recovery with the promise of rising interest rates looming on the near horizon?  The questions are rhetorical, because the answer is obvious to everyone who isn’t a greedy developer.  Basic market studies would show the townships and county board that currently there are more than 771 vacant Walworth County lots listed in the MLS. There are many more listed for sale by owner. More still when you consider most developments will not list every available lot in the MLS, keeping some back to show less daunting inventory totals.  It isn’t a stretch to assume there are more than 1300 vacant lots for sale in Walworth County today. How many does the MLS tell us sold last year? 154. That means we have at least eight years of market inventory now, not counting the approved developments that have not yet been started (likely around two thousand or more vacant parcels that are coming soon). Not counting the platted lots that are not on the market now but assuredly will be. What reasonable person could read these actual statistics and suggest we need more housing?

From a market perspective, unnecessary, superfluous development puts downward pressure on existing homes, and discourages the improvement of the existing housing stock. Why remodel what’s already built when there’s always another corn field about to be bulldozed? There are more than 1300 built homes and condominiums available in the MLS today, which means we could sustain years (a decade?) of growth by just absorbing our current built inventory.

Unwarranted, unnecessary development changes the nature of a community, and I do not recall the Walworth Township Referendum wherein we all voted to trade our farm fields for tract homes. If every development proposed was to be constructed in the backyards of those on the planning commissions, no development would ever be approved. This new Shodeen proposal is in my back yard, a back yard that I love dearly. The back yard that I built my family home on, the backyard that should be protected by adjacent Agricultural Zoning. If I had a vote, I’d vote no, this is obvious. But I’d vote no because I know that Illinois developers do not speak for this county, and I’d vote no regardless of whose backyard the development seeks to destroy.

To my Walworth County loving friends and elected board members, this development is a problem that we can fix before it even begins. Tell them no.  If they don’t listen, tell them no again.  I hear Schaumburg would love 120 new homes. Contact the Town of Walworth and Walworth County offices to let your voice be heard, before we have another farm field welcoming homebuyers that don’t exist. Let’s keep Walworth County Rural. 

 

Email or call 262-275-9800 to register opposition

clerk@townofwalworth.com

lurm@co.walworth.wi.us

joeabell@charter.net

supervisor1@townofwalworth.com

supervisor2@townofwalworth.com

clerk@townofdelavan.com

pvsod@hotmail.com

bhuza@walcomet.com

sewrpc@sewrpc.org

jsurinak@hotmail.com

 

Update 12/28/2015

An interesting rebuttal of my opposition came to light today.  I was asked by an individual if I had indeed tried to buy some of this development parcel in the past, and if the fact that I was turned down by the owner has something to do with my opposition. This is, of course, absurd. I did indeed offer to buy a part of this A-2 land, and was indeed turned down. The reason for my offer? I wished to preserve the land as farm land.  Far from making that a conflict of interest, it proves my interest was aligned with conservation of larger parcels of land, before any development was proposed.

 

Update 12/26/2015

The following details have been sent to all board members. I encourage everyone to contact Walworth County, the Town of Walworth, and their respective municipalities and share this information. These officials need to be reminded of the list of subdivisions that they should have never approved. Thanks, David

 

Walworth Prairie

This development wasn’t always called Walworth Prairie. In 2007, when it was approved by the Village of Walworth, it was called Windmill Prairie. The development is adjacent to the village of Walworth, with city water and sewer and easy access to Highway 14 and 67. It is a stone’s throw from the Walworth Elementary School, and a short five minute walk to Big Foot High School. It is walking distance to all of downtown Walworth. This is the sort of development that deserved to be approved because it followed the county guidelines for smart growth. It is close to town, close to school, close to everything. It’s affordable, it’s convenient, and it followed the smart geographic growth plan for any municipality- it’s adjacent to the established community.

In 2010, this proximity didn’t matter much and the developer failed. The bank took back the sagging silt fences and tattered signage, and for four years the property sat empty, ugly, unwanted. In 2014, a new developer bid on the defunct plot of land, and everyone was super excited to see this development move forward. It’s now the end of 2015, and the only progress in the development has been the addition of some curb and gutter work, which should attract throngs of homebuyers in no time.

I’m unsure exactly how many lots exist here, as there are varying accounts. The PDF from the developer’s website says 69 lots, so let’s assume that’s correct. There are four duplexes built, of varying obsolescence. Since 2007, the development has, for the sake of this formula, built 4 residences (no word if they are occupied). There are 65 vacant. At this clip, we should see Walworth/Windmill Prairie reach 100% occupancy in approximately 130 years. Remember, this is a 69 lot subdivision with city water and sewer, next to the school, where kids can walk and ride their bikes to town. Shodeen has proposed 123 homes (first phase, the entire development will likely expand to somewhere between 200-300 homes). If 69 lots in town next to the school and ballfields can’t sell, you know what can? 250 small lots next to nothing.

This development was the right development for Walworth. It was next to town, next to transportation, next to the schools. It was the perfect subdivision. And yet it failed, miserably. I would suggest that any homebuyer seeking a small subdivision lot in the Walworth area would much rather live next to a park, where their kids can walk to school in the mornings and home again the afternoon, rather than in a rural location where they can walk to nowhere. Then again, the nice thing about walking to nowhere is that the walk is very short. The lots, it should be noted, are on average, some 30% larger than the “conservation” lots at the soon to be turned down Shodeen Development on North Walworth Road.

 

The Ponds of Darien

People love ponds. The Hilmoor would-be-developer was so enamored with ponds that he told the city of Lake Geneva that if he couldn’t build his pond, then he wouldn’t buy Hilmoor (the wise city of Lake Geneva board just turned him down because even they know that not every development is a good idea). In 2005, Darien was bustling. It had a new library and a thriving agricultural base. As a meaningful aside, if you looked at the town of Walworth from the sky and then looked at the Village of Darien, you’d see two very similar municipalities. Ground was broken in 2005 for this new 61 home subdivision, on land immediately adjacent to the developed village. The new subdivision would be nice, with city water and sewer, walking distance to town. Less than a mile to the Elementary School, and just 1.2 miles to Highway 43, for easy commuter access. Quickly, four homes were built. The lots average 90’ in width (Shodeen wants to jam 70’ lots down our throats, which shows how much he respects/understands the historical density of our town).
In 2009, the developer bailed on the failing project, and the bank took it back. It is now owned by the same developer who is seeking to revitalize Windmill Prairie, the failed development that we learned about earlier this week. Today there are 9 built homes in The Ponds Of Darien. There are 52 empty lots, 10 years after the development first displayed a FOR SALE sign. At the current break-neck-pace, it’ll be another 52 years before the tranquil sounding Ponds of Darien is at 100% occupancy.

Shodeen has 623 units coming soon to a corn field near Delavan, and I have a most novel idea. Let’s wait a decade or two (or three or four) so we can see how well that turns out before we welcome the destruction of yet another high yielding farm field and introduce a future failed development that will forever mar the rural town of Walworth. Who’s to say the Chicago developer will even be interested in plowing over this rural farm field once he realizes just how different Walworth County, Wisconsin is from Kane County, Illinois?

 

Troy Hill Estates

In 2009, Troy Hill Estates was created out of a rolling field on Townline Road, just 1 mile from downtown East Troy, 1.2 miles from East Troy Schools, and 1/4 of a mile from I-43. The development featured 54 larger lots, one acre varieties, because every developer in Wisconsin knows that no one outside of Lincoln Park pines for 70 foot lots. Initially, some lots were sold in the $39k range.

Nearly 7 years after it first bulldozed a productive field of beans or corn, Troy Hill Estates has 6 built homes. Today, there are 48 vacant lots, though you wouldn’t be able to tell that by reading the development sign, because it’s tattered and falling over, mostly illegible. The roads are beautifully paved, providing easy access for the throngs of residential home buyers seeking large lots in the $35k range. At the current absorption rate, the development should be filled to capacity in the next 48 years.

Creating more vacant lots when there is an existing glut of supply is a disservice to the developers who have already begun their developments, and a disservice to every resident of Walworth County. These developers deserve the chance to sell their decades worth of inventory, and what they don’t need is the approval of more vacant parcels that compete directly with their already empty subdivisions. If developments with easy commuter access to robust job markets, short walks to school, and low, low prices can’t attract buyers, which development can? A corn field development adjacent to nothing, but walking distance to no where?

 

Sugar Creek Preserve

In 2004, the Sugar Creek Preserve was proposed on 260 acres of beautiful land just two miles south of I-43, barely 5 miles from downtown East Troy, 15 minutes from downtown Lake Geneva, and minutes from Alpine Valley. There would be just 52 lots in this conservation development, with ponds and miles of walking trails and more wild flowers than anyone could ever count. The development adhered to strict guidelines for harmonious, natural development and was sure to be a huge success. In 2005, it burst onto the scene with those walking tails and ponds and oak groves on rolling hills and so many flowers. Further, it was pushed far into the trees, so far from the road and from neighboring houses that everyone both in the development and outside of the development maintained their tremendous privacy.

Of those 52 lots, there are 10 built homes (including one under construction currently). There are 42 vacant lots that are empty today. The 10 built homes were completed over the past 10 years, which tells us that we have only 42 years left before the vacant lots are filled with happy homeowners. This development caters to those Walworth County residents who work in the plentiful Milwaukee job markets, and is easy access to Lake Geneva, Alpine Valley, East Troy, and Mukwonago.

It should be noted that this is a beautiful development, with parcels available from $49k according to the sign, though I’ll bet we could buy one for $39k. Lot sizes range from 1-3 acres, most are rather wooded. This truly is one of the highest quality, most affordable, empty subdivisions in Walworth County. The miles of walking trails through tens of acres of natural prairie are really something that must be seen to be believed, though after a decade of attracting only a handful of buyers, the market obviously thinks this conservation development is too good to be true. Oh, and lest you assume that surely a large developer would never commit such an absurd market error, this development was the work of perhaps the largest developer in Walworth County.

 

The Oaks Of Delavan Lake
Now this was a good development idea. 16 beautifully wooded lots measuring one half acre to 2 acres, just 1 mile from the East Delavan Shopping District, and 1.2 miles from I-43. Across the road, Delavan Lake, down the road, a fabulous golf course. Delavan Lake Sanitary District, high density surrounding it. The development would appeal easily to three market segments: The lakes area vacation home buyer, the full time family who presumably works in town, and the commuter who wishes to live in Walworth County’s woods while driving into the Milwaukee or Illinois job markets. This development was going to be hot, hot hot. Can’t miss.

In 2007, it was proposed. In 2008, it was off the ground. 16 lots, conservation style, so as to fit through the counties super stringent re-zone standards. Today, there are 2 homes built in the Oaks Of Delavan Lake. There are 14 vacant lots in this lovely development, begging for a buyer, or fourteen. At the torrid absorption rate of 1 home every 4 years, the development should be full of happy homeowners in 56 short years.

A board member recently asked me if it was the board’s charge to save developers from themselves. It was intended to be rhetorical, profound perhaps, but the question has an actual, obvious answer. If a board honors their fiduciary responsibility to their constituents, then they needn’t consider the developers’ personal, financial folly. They need only understand that excessive development applies downward pressure on the property values of the entirety of Walworth County, and if they understand that, they’ll turn down development that isn’t in the best interests of their neighbors and constituents. (Since Walworth County is currently operating with at least 50 years of unsold vacant lot inventory (stay tuned, the statistics don’t lie), that would render every development proposed over the next several decades unnecessary.) By turning down these unnecessary and unwanted developments they save the developers from exploring our bankruptcy laws, and they save their neighbors (who elected them) from the value destroyer that lurks in fields of unsold lots.

 

Bluestem Meadows

In 2006, Bluestem Meadows was born on 42 acres in Sugar Creek. The 11 lots are three miles from the Elkhorn shopping district, and just 2.6 miles from the intersection of 12/43/67, making it an easy commute to the robust job markets of Milwaukee and Waukesha Counties. The countryside there is beautiful. Elkhorn is a vibrant community of 10,000 plus full time residents, in addition to a thriving vacation home community in Lauderdale Lakes. This development was going to be snapped up by throngs of waiting buyers.

Bluestem was a conservation development, approved by the town and the county because the sign was pretty and the name, Bluestem Meadows, sounds like a nice field of flowers. In the past 10 years, there has been one home built. 10 vacant lots, one built home. Sagging silt fences line some of the lot boundaries, and for sale signs of varying shapes and legibility dot the landscape. For the township, it won’t be long at all until the bustling community fills those last 10 lots. Just another 100 years or so.

 

Sharon Green
Sharon Green is a very unique Conservation Development in Sharon. Walworth Township, as a point of fact, has far more in common with the density and aesthetics of Sharon than it does with Delavan.

This new development was really quite something. The homes were to be “green”, constructed by a builder who specialized in this desirable, earth sensitive construction. They would capitalize on the macro trends and the hottest housing market anyone had ever seen. In 2005, or thereabouts, the development burst onto the scene. These lots were conservation style, with some open lands surrounding the homesites. They were walking distance to town, with water and sewer provided by the municipality, walking distance to the grade school.

In 2006, a couple of lots sold in the $50k range. Today, there is one lot available on the MLS for $20,400, the other lots are unlisted, though a tattered sign at the pillared entrance tells us they are for sale. There are 32 lots in this subdivision, with 3 built homes. Not all is lost, however, as a farmer has been farming the vacant lots and bails of hay now line the single cul-de-sac road, and those hay bails do lend a nice country vibe to the empty subdivision. With 3 homes built in 10 years, it will only be another 96 years before the development is full. But time flies, so it might not seem nearly that long.

A common refrain amongst developers who are seeking to exploit our agricultural lands for their personal gain is to explain the connection we have to the Chicago labor market. If that is the case, please consider that Sharon Green is 93 miles from downtown Chicago. The North Walworth Road proposed development is 95 miles from downtown Chicago.

 

Highfield Glen

Highfield Glen on Stateline Road (Walworth Township) was proposed in the early 2000s and completed in 2003. That’s just about 13 years ago. It’s a beautiful cul-de-sac, fully wooded, for 100% privacy of both the residents and the township neighbors. The lots were in demand, they said, and so the town approved a subdivision of 15 lots. Since 2003 there have been 4 homes built. If you know anyone looking for a vacant lot in Walworth Township, there are 11 of them over in Highfield Glen. Two were foreclosed on. Growth is good, except there’s no growth when there are no buyers.

 

Update 12/15/2015

 

The township board has decided that they’d like to meet with me, not individually, but collectively. Sounds like someone upset their tidy little apple cart.  Currently, concerned citizens are formulating plans to fight any developer attempt to transform Walworth into Pottersville. 

 And because our common sense angle isn’t one that’s based only on emotion, but rather on cold, hard statistics, here’s an updated letter that I just sent to the elected officials who serve me and my township neighbors. 

 

Here are some development statistics for the Town of Walworth. This will help outline demand and absorption rates, in addition to using market data to define a typical property owned and sold by the residents of Walworth Township, the constituents of the board.
Over the past five years (since 12/14/2010) , Walworth Township and the Village of Walworth have sold a combined total of 11 vacant lots. As of this date, there are more than 108 vacant parcels actively listed for sale, not including by owner parcels and new development parcels not yet presented to the market. We have 50 years of market inventory currently offered for sale, assuming no further inventory is added.

It should be noted that interest rates for 30 year fixed rate mortgages have averaged 4.17% per Freddie Mac over those five years. The prior five years mortgage rates averaged 5.7%, some 37% more than the recent five year average. Forecast for coming five years is unknown, but assuredly more in line with the 2005-2010 rate average than the more attractive 2010-2015 average.

Three distinct market segments for the sold parcels:
Whitetail Ridge sold 3 lots, total. In 5 years.
Two vacant lot closings occurred in Walworth Township for properties hooked up to the Delavan Sanitary District. One sold for $7,500. That lot measured 150 x 100, or approximately 50% bigger than the lots presented to the plan commission, and these are Delavan Township market lots, not Walworth Township market lots.  The other lot was actually two lots, combined into one. That lot totaled one acre, and sold for $25k.

Six other vacant parcels sold in the Town of Walworth. These other parcels represent Walworth Township and reflect the density and values of the township. Those six parcels sold for an average price of $353,993. The average parcel was 37.33 acres in size.
There are currently 16 homes for sale in Walworth Township. Those 16 homes have an average lot size of 9.6 acres.

It’s not the fault of a Chicago developer that he doesn’t understand our market, it’s just a lack of understanding that comes from never having started or completed a successful development in Walworth County. RowHomes of Fontana, marketed aggressively since April, full time sales center all summer and fall during a banner year for the Lake Geneva vacation home market, bonuses and models and fancy brochures.
Total Rowhomes sold? Zero.
Stastics per MetroMLS 12/14/15

Information deemed reliable but not guaranteed.

 

South Shore Club Market Update

South Shore Club Market Update

As I grow more distanced from my youth, I remember things as though they happened on a movie screen. I remember being dropped off at the limestone steps of Northwestern Military Academy, the scene looking like a Wes Anderson score painted gray and brown. I remember walking up to the oversized door, but not before I took a deep breath to ready myself, to steady myself. It was just me and a friend or two from school, and since our small private school offered no course in Driver’s Ed, we had to take it somewhere. That somewhere was Northwestern. I remember the rotunda, smaller inside than it appeared it should be when viewed from the outside. The second floor balcony circled the space.  The three of us from the other school walked down the hallway, and I distinctly remember catcalls and whistles, directed, presumably, at the girls from my school. We found the room, escaping the watchful stare of the second floor balcony gawkers. We exhaled. We did this for however many weeks it takes to complete Driver’s Ed. It was a strange experience, and in my recall I can watch that scene unfold and it hardly seems as though I was the leading character.

This was my first experience on the grounds of what would become the South Shore Club. I played basketball in the gym there, against those cadets who, in the later years of the academy, hailed mostly from Mexico City. That year would have been 1994, and my presence there was more than the venerable academy could take. The school closed those oversized doors a year later, transplanting the cadets to a new campus near Milwaukee. The property sat abandoned for a few years, until the South Shore Club developers took control in the late 1990s and transformed the grounds into what it is today.  I lament not spending more time near that property during those late 90s years when it was unoccupied

But that was then and this is now, and the story that played out on those grounds between 2002 and 2015 has been well documented, especially here on this site. The short story, for those who have shamefully been absent from the discussion, is one of a new development. It’s one of a fast start, a soft middle, and a restructured price range that finally hastened the completion. The club is now complete, it’s done. There’s nothing more to see there, nothing left to do. Maintenance projects now take the place of construction projects, and nary one or two new builds are expected to take place there in 2016. The years of action in the club were 2012, 2013, and 2014. Not coincidentally, those were the years where I was at the helm of that previously wayward ship. Prices were adjusted, a new pitch was adapted, and those three years were significant. Aged inventory was cleared form the market, distressed inventory was sold off and replaced with strong ownership, vacant parcels were sold so they could no longer drag on the values of the built homes. The hard work was done, and when 2015 started there was very little left to do.

Very little, but still something. There was a home on Forest Hill that hadn’t yet sold, even though it languished on the open market for years. It was my listing. The price structure was never right, first in the threes, then every part of the twos, then the upper ones, before settling and closing in September at $1.45MM. Next door, the only other pieced of aged inventory, this of a vacant parcel that sold originally in the $800k range, back in the early 2000s when that seemed like a good idea. I brought a buyer to that last lot, and it sold for $420k.  2015 was a year of market inaction at the South Shore Club, but the only goal it wrote down at the beginning of the year was complete by October: Sell anything that remained.

The sales closed, the building rush of 2014 now just about over, the market looks to 2016. What will it hold? Will the South Shore Club rest now, finding the pause that it’s so badly needed for the last 14 years?  That would be the best possible scenario for the Club. Rest. Enter 2016 without available inventory, and spend all of 2016 without inventory.  Appreciation is driven by demand, and demand is fanned by absence of supply. If the SSC can withstand the urge to introduce properties to the market, it will cement itself as a desirable, and rare, commodity. If, however, it enters 2016 and some owners who got in right look to capitalize on their prior, timely investment, then the SSC will see new inventory. This is not what I’d like to see happen, but this is what I expect will happen. The temptation of a strong market will be too great for some owners to ignore, and built inventory will return to the market in 2016.

Will the prices be so much higher than they were? Will this brief absence of inventory mean prices have risen dramatically? No, of course not. It means the price structure that I suggested in 2012 is still largely in place, though adjusted upwards because the uncertainty of where that market goes has been removed. Expect homes on the lakefront to be sold in the high threes or perhaps low fours. Expect inventory from the lake back to the pool to achieve $2.5-3.5MM, the high end of that range only possible for exceptional homes. Beyond the pool, $2.2MM to $3.5MM is expected, the wide range reflecting a wide variety in the quality of the built homes there. Lastly, expect the Forest Hill properties to be anchored in the $1.6MM to $2MM range, which is where they always belonged. 2016 should be a terrific year for values in the South Shore Club, but the association would be better off ignoring the temptation of inventory. It’s time for the South Shore Club to rest.

Weekend Boredom

Weekend Boredom

Sadly, I hear the same things over and over again. This is this life. Why can’t you sell my house, why can’t you find me a house, why can’t you place a full page ad on the back page of the each London newspaper, because that’s where all the buyers are. These are the things I hear, and while the pitch changes and the versus are varied, the chorus is always the same. One of these things that I hear has to do with boredom, voiced often by those who fall easily into its clutches.  There’s nothing to do there in the winter. There it is. That’s the sentence. Like small children who must be presented with something immediate and shiny, this is what I hear. There’s. Nothing. To. Do. There. In. The. Winter.

My family hasn’t visited the county where I do most of my fly fishing for many months, and so on Sunday we took the long drive. I am a terrific driver, fast and nimble, route minded. But I do not enjoy the process even when I’m alone, and so how much worse the process is with two children in the back seat. My children I love, but regardless of their individual behavior, their back seat joint road trip behavior is absolutely toxic. No matter, we arrived to this town on schedule and sat down to have lunch at a place where we will often eat dinner when we’re out there. The kids like it, and so we eat there. The pizza was soggy, the salad bar beets tasted as though they had been canned decades ago, according to my beet eating wife. The waitress didn’t refill our water glasses, and when one family walked in they immediately hovered over the salad bar before taking their seats, no doubt coughing and yawning the whole time. Lunch was okay, I suppose.

As a strange point of fact, one thing we do when we visit this town is stop at the grocery store. It’s a fine grocery store, small and clean, expensive.  Another unique fact is that I have never left that store within spending at minimum $20. Hungry for a snack and bottle of water? That’ll be $21.45. But the people are different in that store, and so I enjoy the rare anonymity of an oft visit there. The fly shop is a traditional stop, but on a Sunday in this supposed Winter the fly shop is closed, and so if the fly shop is closed then the adjacent yarn shop will not be visited. Who would make a special stop for a yarn shop? Not me, and so we drove. The hardware store was next up, as I needed a small paint brush. The store had pictures on the wall of giant bucks that had been shot or arrowed over the recent season. Giant bucks every one of them, pasted on the entry wall for all to see. I don’t hunt, and I don’t like dead animals unless they’re cooked, but I marveled at the board as if I was searching for someone I knew. I wasn’t.

There’s a creamery in the next small town, cheese curds fresh daily. I’ll stop there once in a while to buy a bag of squeaky cheese, and I’ve been there enough to know that the freshest of the cheese is on the counter, not refrigerated. If you go there and all you can find is the FRESH CURDS in the refrigerator, you’ve been had. I know this, because I’ve been there. We didn’t stop this time, so we pushed north to the next town, to that town where there was some hillside land that needed looking over. Once the land was walked and looked at, we stopped at a Norwegian place that functions as the Old World Wisconsin of this area. There was an Old Timey Christmas thing happening, and so we drove in and paid the parking fee and wandered the old cabins that made up this first Scandinavian settlement in this particular part of the state. The old buildings lacked electricity and they were dark and damp, smelling of woodsmoke and the slow rot that will ultimately do each building in.

In one, a lady weaving some wool into yarn. In another, a blacksmith hamming some metal. It should be noted that upon entering the yarn weaver shop I asked how long I’d need to wait for a sweater, and once in the blacksmith shop I commented that the metal rod he was hamming on was transforming into a fine metal rod with sort of roundish end. Both comments were met with laughter, and so I decided that I liked this place, because they liked me. We walked around the soggy gravel paths, visiting the shops, sampling the lefse. My kids completed the scavenger hunt and were less than enamored with their selection of gifts- the dime gum ball machine variety. We left there shortly after, stopped at a few back road bridges to watch the trout fin in the current, and stopped back at the grocery store for two espresso drinks and a bottle water. $21.80.

We drove home, deep into the night, back to the south and the east, back to this place where we live most of our days. In that county on that day, there was nothing to do. Kids that lived there sat at home, bemoaning the lack of snow, playing video games and fighting with their siblings. The men watched football. The women were annoyed by the kids doing nothing and by the men doing nothing. There was nothing to do that day. But for us, we drove there anyway, and we went to a restaurant that we can’t go to at home. We went to the store that we don’t have here. We looked at some blacksmithing and some yarn weaving, and we walked some hillside land that couldn’t be found in Walworth County. There was nothing to do there, but we gladly went anyway, because it was a different place with different things to see and a different way to be.

This winter, you could sit at home in the city or the suburbs. You could sit there and say there’s nothing to do. Or you could come up to the lake, and wander around our town. Walk our shore path. Eat at our restaurants. When the snow comes, you can ski our hills and skate on our lake. You can do these things, which don’t sound all that exciting, until you realize that they’re infinitely more exciting that sitting at home.

 

 

Geneva Lakefront Values

Geneva Lakefront Values

I put a new graph on this new site, on the home page down at the bottom. It aims to smooth out the rough edges of our lakefront pricing by calculating the very simplistic, very popular Price Per Foot. For those who don’t yet know, that’s a very common way of determining lakefront value. It supposes that at the end of each year a collection of lakefront properties will have sold. They’ll be very different, some super expensive others only moderately so. It totals sales prices and divides that number by the total number of lakefront width sold, and voila, Price Per Foot. This year we’re trending at $25,161 per foot. This would take a 50′ lot and assume it’s worth around $1.25MM. It would take a 100′ lot and assume it’s worth $2.5MM. And if you’re light on math skills, it would take a 200′ lot and come to a $5MM valuation. Even though this is a remarkably unsophisticated way of determine value, it often holds up.  This is the case for 2015.

But the price per foot bothers me, because it’s so simplistic. The nuances of valuation here cannot be wiped away by some basic fourth grade math. This is why I prefer a formula that includes price per foot, price per square foot of overall land mass, price per foot of the residence, and adjustments for location and market conditions. Of course this algorithm is proprietary, at least until I sell it to Zillow for $50MM and retire. Once I bank that $50MM, I’ll consult with agents, telling them, usually, that their problem is that they’re too nice, too sweet, too understanding. Then I’ll double that $50MM and look to buy some hot biotech stock so I can destroy my newly created wealth. I’ll be like the Andrew Mason of real estate. Anyway, lakefronts.

What this valuation formula does is identify a narrow range of value, and this is the goal. The range can be tweaked up or down, depending on the market conditions at the precise time of the listing. The formula isn’t fool proof, but it allows us to dismiss outliers and identify obvious value. But no matter how many words I’ve spent to get to this point, this day isn’t about valuations or about my desire to sell something to Zillow. It’s about gauging the health of the lakefront market. It’s about the inventory and the sales, the averages and the predictions. The good news is that we have some data to help us in our measurements.  A common refrain among agents is to declare the market hot, no matter if it’s scalding or tepid, no matter if it’s just smoldering or fully ablaze.  Ashes are hot, too, but they don’t point to much continued heat.

It’s easy to look at our price per foot (PPF) and assume that points us in the right direction. It’s easy to look at sold totals, and guess how things are going. But beyond all of those stats is the actual dollar volume of transacted properties. This isn’t a number you see often, so it’s a number you’ll see today. Consider, at this late date in 2015 we’ve had $68,262,140 worth of lakefront properties change hands. This excludes South Shore Club listings, because I can’t measure their frontage due to the communal ownership of the lakefront. That’s a high number, right?  Yes, it’s high, but how high? If I were Josh Flagg I’d screech at you that these numbers don’t lie, but I’m not wearing my bedazzled leather vest today so I am most definitely not Josh Flagg. $68,262,140.

Last year was a terrific year for the lakefront market. I had my best year ever, which was nice. But the lakefront printed only $35,375,000 worth of sales. 2013 was a good year, but not as good as 2014, yet $45,495,000 in lakefronts traded. 2012 was a down year for values, likely representing the bottom of the recent recovery cycle, yet value hunters were common and the market pushed out $53,800,500 worth of sellers. 2011 was the pit of despair, with late year prices crumbling, and $33,580,500 traded. 2010 was a year where no one knew what was going to happen and only the die hard bought- $33,573,000 sold.  2009 had $24,659,999 in total. 2008 was the last great year of the prior great run, and yet just $36,732,134 printed. Even 2007, when things were not yet even hinting at a wind down, just $45,666,600 closed.

Looking at the numbers from here, they make complete sense.  When the market was hot, the inventory was low, fueling more appreciation. When the market went south, buyers were scared, and volume plummeted, along with prices. As the recovery progressed from 2010 through 2014, there were fits and starts, but mostly volume consistency. The anomaly in this is the 2015 total. $68,262,140. That’s an incredible number, especially because it has occurred in conjunction with rising prices. It’s mostly owned to some top end sales, and it’s especially significant when you consider that those totals didn’t include two auction properties that would have pushed the number to $75MM, and even more impressive when you consider it didn’t include the South Shore Club volume.

With that stunning absorption of both aged and new inventory, the market is heading into 2016 in terrific shape. Inventory is low, but not stagnant. Buyers are plentiful.  The stock market threw us for a loop this year, and returns will be mostly flat. Yet the market continued its march. To understand why, just remember that even this elevated volume represents a tiny, narrow market.  The entire lakefront market revolves around 20-30 sales annually, and I’d guess at least 40% of those sales are made up of players already in the market. If that’s the case, then Lake Geneva needs scarcely 10-15 new buyers annually to keep this whole thing moving forward.  It’s no wonder the market is as exclusive as it is, and no wonder it chugs along in years good and in years bad.

Lake Geneva Pocket Listings

Lake Geneva Pocket Listings

The business of real estate is a very big business. Prior to the last decade and a half, the big business players in the world of real estate were actually in real estate. They were Coldwell Banker, Century 21, ReMax and others. The biggest players in the real estate industry were the patrons of the industry, the behemoths that grew large and venerable because they earned it on the ground, in the trenches, at the closing tables and open houses. The big business of real estate today has very little to do with those old titans, and everything to do with start ups. Sure, Wells Fargo is still a big deal, but Avant is so much sexier. In the same way, Coldwell Banker is still the number one brokerage in Chicago (no matter what @&^&$ company would have you believe), but they are already what they are. Zillow is now the king maker in the industry, and Zillow looks at what it might acquire in terms of software and hardware, and the small start ups that make the next big thing are the new leaders of the real estate industry.

Both Zillow and the National Association of Realtors, through their various entities that they control, have business models that must continue growing, and at all costs. Zillow must behave this way because they have shareholders to answer to, and NAR must behave this way because they’re terrified that Zillow will make them obsolete (they will). They are looking for what’s next, thinking that some thing that some guys from MIT dreamt up might be worth the $30MM they’ll sell it for. Real estate is the largest asset class in these United States, so anything that can gain traction as part of the process has the potential to be big. Like huge. As the players scan the start up scene for some possible disruptors, they find companies like Opendoor.com. They are the purveyors of an interesting (lame) concept that allows homeowners to sell their homes the moment you’re ready!  The company promises that you can sell your house and avoid the hassle of the traditional sales model, and all you’ll need to do  is fill out a couple of online forms and they’ll buy your house from you. The company then re-sells your house. This is the online version of those bright yellow signs you see along the highway with ransom note style lettering spelling out  I BUY HOUSES. It’s a gimmick that works in an appreciating market, and dies a horrible, VC funded death once the market inevitably pauses or declines. Still, they might sell enough cookie-cutter Arizona ranches to convince some large player to buy them at a trillion times earnings (there probably aren’t any).

 

As the market continues its nice pace forward, more and more agents are entering the business. This is to be expected. As more and more leave their jobs as baristas, car salesmen, and hair dressers to transform their lives by the promise of immediate, unfathomable real estate wealth, the agents who are already established in the business do what they can to hold on to their market share. One way to do this is by controlling listings, because (s)he who has the listing has the power. Control the inventory and control a market, this is the way real estate is done. This is why new companies will list anything and everything. $35k caboose condo? Yes. $2MM lakefront house? Yes. Vinyl ranches as far as the eye can see? Yes. Rentals? Yes. They’ll take it all, because listings represent power. And why do listings represent power? Well, obviously because they ensure revenue by listing side commissions, but mostly because this forever evolving, technological business of real estate still relies on metal signs, pushed into the front lawn.

In an attempt to control listings, and to shield listings from the open market during periods of time when it isn’t in the seller’s best interest to present fresh to market, agents are increasingly turning to pocket listings. Before the MLS, every listing was essentially a pocket listing. Now, with the internet ruling our lives and this business, pocket listings have returned as a unique way to quietly market marquee, or otherwise rare, offerings. Getting back to our initial thoughts about Zillow, and their need to have their zestimatey hands in everything, they have a new feature that allows for agents to market pocket listings. They do this with the promise that it benefits consumers,  but of course we know that it benefits Zillow by having control over more of the inventory, whether it’s public inventory or not. Agents, as they fight to maintain some marketing relevancy, will hold their pocket listings back from these national portals, because if a pocket listing is listed online, it’s obviously no longer a pocket listing.

Lake Geneva has quite a few pocket listings at the moment. They may be true pocket listings, like one I just listed last week on the North Shore in the $4s, or they may be pocket listings of a different nature- unsecured properties that certain agents know are possibly for sale, while the majority of the internet searching world assumes they have the market canvassed. The cloudy, distracted message for today is simple. Want to know about pocket listings at Lake Geneva? Ask me. Want to know about pocket listings in Chicago? Ask a connected agent in Chicago. Want to sell your real estate start up that does something no one asked to have done? Call Zillow. Want to sell your super boring Arizona ranch? Opendoor has a few forms for you to fill out.

 

 

Winter Selling Strategies

Winter Selling Strategies

I’ve driven to Marco Island at least twice. I don’t think I’ve driven there more than that, so it must be at least and at most, twice. The days were those days before kids, or before they were in school, back when my schedule had nothing to do with basketball practice and swim meets, back when there was little that I absolutely had to do. Back then, my wife and I would leave for Florida just after Thanksgiving, and we’d stay there for three weeks. What a luxurious thing that was, and what a strange thing it was. There we were, young and lacking money, and we drove to Florida like some septuagenarians to spend some of the winter. The market afforded that opportunity then, because it used to be painfully quiet in the days that fell between Thanksgiving and New Years. The market wasn’t active, at least not for me, and so I’d spend some time hurling fresh caught mullet into the surf, and at least once I caught a giant Snook that my wife caught only glimpses of on video. She didn’t know how to zoom out.

But that was then and this is now, and our market doesn’t sleep. It doesn’t make allowances for three week winter vacations, nor does it particularly care if you’re not paying attention because you’re busy shopping and baking. The market churns, and it churns in July as it does on the last day of November, as it will on the 20th of December. Now, it does slow on Christmas Day, and on New Years Day, because only the very difficult or the exceedingly lonely would wish to talk real estate on those days. But the rest of this next month, the market will be moving. Last weekend, after the rain of Thanksgiving, there were showings on Friday and on Saturday and on Sunday. There was activity in a market that the casual observer would assume is on hold.  I’ve always said that the best time to secure value at Lake Geneva is late November through mid December. That’s still true, but that’s direction for the buyers out there. I generally ignore the sellers, except for today.

It’s a terrific time of year to be a buyer, but it’s not such a fun season to be a seller. Sellers know it’s not fun to be available during the season when every active buyer wants a deal, which is why they’ve taken their properties off market en masse long before the last day of November. This has been the conventional wisdom for quite some time,  but it’s the wrong way to handle the winter. If it were still 1998, I’d have time to go to law school to avoid selling real estate, but more importantly, we could take our properties off the market and sit around to pass some of the winter before re-listing the homes. This isn’t 1998, sadly. It’s very late 2015 and the market doesn’t stop, which means inventory shouldn’t be pulled. If you’re a seller and you’ve been floundering on the open market all year, there’s no particular reason to let your home sit out the next 8 weeks.

There are exceptions to this new rule. If, for instance, your home has been for sale for all of 2015 and it’s grossly and disgustingly overpriced, then pull it. But only pull it if you’re intent on letting the property rest before bringing it back to market in the spring (Late January) at a much reduced list price. If the goal is to let a property rest, then reposition it in the market for the new selling season, the most important part of that playbook is the repositioning. A property cannot be repositioned to appeal to a new group of buyers if the property is the same old crappy house at the same elevated asking price. If you’ve been for sale all year and everyone loves your house but hates your kitchen counter tops, then pull the property, install some new counter tops, and re-list in spring, no price adjustment needed. However, if your house is listed at $2.5MM and everyone knows it’s worth $1.8MM, then pull it from the market, let it rest, and bring it back at $1.99MM in late January. These are two scenarios where it makes sense to pull and then re-list, but for everyone else? Leave the property on the market.

Last Friday, I had two showings at a condo on the lake that hadn’t been shown since the first weekend in November. If that condo hadn’t been on the market and had, instead, been pulled as is the old-timey conventional wisdom, it would have never had two different buyers take a look at it. It would have been sitting with its head in the sand, hoping no one paid it any mind until it came back to market, triumphantly (boringly) in late January.  Sellers, heed this advice. Leave your properties alone. There’s very little more appealing than walking a lake property in the still of winter, just after a fresh snow, and if your property isn’t on the open market, it’ll just be you walking the property, and you’re not a buyer.

Happy Thanksgiving

Happy Thanksgiving

Even when it seems to me that there are lots of cars here, there aren’t really lots of cars. They meander past heading to one direction or from the other, minding their lanes and watching their speed. The men of the morning pull into the gas station to fill up their trucks and their gas tanks, to power their days of digging or plowing or cutting and clearing. They do this every morning while I sit here and watch it unfold. It’s always the same. The seasons change, the white I see now will be greenish and brown by next week, but who knows what the week after that brings. It might be snow or it might be rain, or it might be double nickel and sunny, there’s no way to know. The sky today is soft and blue, the air still. There’s a storm of sorts brewing on some plain somewhere, but it isn’t here today, so the men fill their gas tanks and I sit and type. Every day.
It might be that the world sees this as boring. That my life, here at this keyboard and there in the seat of that car, and later in front of a fire, that this is somehow boring and unexciting. They see this place, this Wisconsin and Midwest, and they wonder what it is that we do here, and why we choose to do it. There is so much more out there, they say, mountains and oceans and different people and different cultures. There is more out there, more than there could ever be here. This is why kids grow up in Williams Bay and then, in large numbers, kids move from Williams Bay. They move to small cities and to large cities, they move to other countries or to other counties, they move places where they can see different things and learn about different ways. They spend time here in this incubator and then, when ready, they catch the first flight to somewhere else. Only later do they wish that their somewhere else would be a little more like this place.

It’s not hard for me to be thankful. It’s hard to act in a way that proves it, but it isn’t hard to think it and to understand it. This life is a privileged life. I do not toil in salt mines, though some days I think it would be better to do so, because at the end of a day I’d have a nice, large pile of salt and someone would come by and commend me for my incredibly large, magnificent mound. I do not travel across the country weekly, missing my family and selling something to someone, sleeping on hotel mattresses and eating continental breakfasts of Fruit Loops and microwaved eggs. I live four miles from this desk, and in the morning I wake and drive with my kids to the East, two miles. I drop them at their small school, they walk down the sidewalk the same way every day, though some days my daughter dresses like an Indian and my son carries the weight of a basketball game loss on his still young shoulders. I drop them and drive out of the lot, passing people I know, heading still to the East, another two miles to my office where this long desk and small keyboard await. If I drove another sixth of a mile to the East, I’d find myself in the lake. My entire life plays out along one four mile stretch of road, and for that, I’m thankful.

The kids who moved far from here a long time ago will be back in town tonight. They’ll drive the routes they know, marvel at what has changed and remark that nothing has. They’ll tell their kids about their old school, about their old hangouts, about the old baseball fields and basketball courts. They’ll tell stories of school operettas and foursquare lunch breaks. They’ll spend some time here and then they’ll leave, and on Monday I’ll drive four miles to this office, which is one half mile from where I grew up, and I’ll be thankful that nothing has changed.