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Bluff Lane Sells

Bluff Lane Sells

Bluff Lane is a nice little dead end street on the south shore of the lake. In spite of its small nature, this street has been a near constant source of inventory for our market over the last several years.  My listing at N1939 Bluff has been for sale since the middle of 2017, first with another broker and then with me. It was a nice house, offering the sorts of things that most similarly priced houses in the 2018 market just can’t offer. In that, the house was complete. Five bedrooms, three finished levels, 70+ feet of frontage, a huge pier, perfectly landscaped grounds and a two car garage.  I closed this listing last Friday for $1,950,000, but like all sales, there’s a bit of a lesson here.

When the property was first introduced to the market in the spring of 2017, the price was $2,295,000. That seemed a fair target for a house that offers so much by way of living space and amenities. The market was interested, but after several months the property failed to sell. There was at least one offer during that listing, maybe more. Then, I took over for the prior broker and put my angle on the listing. Another offer, but no dice. The price was adjusted downward in small increments. Then, this fall, another offer. A contract. But that deal failed to close. Finally, a new offer from a new buyer who saw the value in this property, but only at a price that made sense to him.

After 16 months of marketing effort, the property sold for $1.95MM. That’s no unique surprise, since several of the other offers that were received settled in a similar range. Try as we did, we weren’t able to get that sales price to $2MM. That was the goal, after all, to make or beat that benchmark.  In spite of this goal, the property just wasn’t able to push a sales price to that $2MM level. Was it  the house? Was it the interest rates? Was it the stock market? Was it the street?

Nope. It wasn’t any of those things. It was simply the reality of a property seeking to sell for $2.195MM. To understand why this property struggled, you must understand the typical buyer and the different price levels that separate groups of buyers. There are buyers that will pay $1.9MM for a house. Lots of those sorts of buyers, actually, each one successful enough in their regular life to pursue this vacation life. But a $1.9MM buyer is often a buyer who would love to spend $1.7MM or less. A $1.9MM buyer is often a $1.5MM buyer who found a bit more motivation to take on a bit more risk.

On the north side of $2MM, there are very few $2.1MM buyers. There are upper $2s buyers, those who might feel comfortable at $2.4MM but would reach to $2.9MM for the right house at the right time in the right location.  But there are very rarely buyers who place a hard cap on their search at $2.1MM. In understanding the demographics and the price categories that most buyers align within, we can make more sense of the Bluff Lane sale.

Was it worth $2.2MM? Sure it was. But a $2.2MM buyer is often a $2.5MM buyer, and if they spend a little more they often find a property that more closely resembles their weekend dream. When the dust settled and the property closed, it closed as it likely should have. For $1.95MM, to a buyer who found his way to the lakefront at a price that made market sense for both buyer and seller.  To the seller who allowed me to represent this fine lakefront home, I’m grateful.

Shore Haven Sells

Shore Haven Sells

The lake access market at Lake Geneva is not difficult to understand. In order to find this understanding,  one simply needs to be open to the facts. In the instance of real estate, the facts are limited to sold comps. This is the only fact that exists in this business. Current value? Opinion. Future value? Opinion.  Sold listings? Fact. If you’re open to the facts, then you must embrace the sold comps.  If we’re looking at lake access markets, then the first comps to look at are inside of the association itself. If the immediate association cannot provide us those comps, then we’ll have to look at the broad market. In that there is an issue, because comparing associations? Opinion.

Last week, there were two lake access sales that caught my attention. One was important because I represented the buyer. The other was important because it just so happened to close for the same price, on the same side of the lake, during the same week. If there were ever two comps to be examined, these are those.  The sale that I closed was in Shore Haven, this of a home that I have sold in the past. In fact, I sold it just last year for $675k when that seller was in the process of upgrading to lakefront.  The home is nice, with some meaningful upgrades, a very desirable, large transferable boat slip, and terrific proximity to the water. This time around, I brought in the buyer, and the home was listed on a Friday and by Sunday we had it under contract. Did I enjoy negotiating only $5k off of a $720k list? No I did not. But the market, man. The market.

The other sale was in The Highlands, or the Lake Geneva Highlands, that association just to the East of Black Point.  The Highlands has been gentrifying quickly over the past decade, and more so over the past few years. It’s a nice enough association and one of the few remaining on the lakefront where a lakefront home can reasonably be expected to trade under $1.5MM. The home in the Highlands was a cottage style home with limited parking, a scattered tree lake view, and a transferable boat slip. It was updated, quite cute, and in that desirable location just one home from the lake. In this description, you can tell that the Highlands home was closer to the lake than the Shore Haven home, and the view was much better. The homes were both of average size, though Shore Haven had a garage and parking while the Highlands home was more challenged on this front.

That’s the background, and here is how the market works in each association. In the Highlands, there have been five MLS sales per MLS of off-water, non-lakefront homes that have closed over $470k and under $587,500. Per the MLS, the highest sale for a home not located on the lake or on the lakefront parkway, was $587,500. The fact that five homes have all sold in this tight window proves the primary market range for a Highlands home located off-water. The home that just sold closed for $715k, and now that it’s sold we can all agree that it was worth exactly what someone paid for it. But in the context of the market, that sale price set a new upper end in the Highlands.

Looking back to Shore Haven, we see in the MLS has printed 10 off-water sales priced over $500k. Of those, all but one was over $624k, with the most expensive sale being at $1MM, and five over $800k. The sale that I just closed for $715k, looks to fit right into the middle of the Shore Haven range, especially when considering proximity to the lake and size/location of the boat slip.  Was I deeply in love with $715k for this Shore Haven home? Not really. But did it make a load of market sense, particularly during this period of tight inventory and high buyer demand?  You bet it did.

Both sales were fine for our market, but now you have a slightly opened window into the way that I view these lake access associations. Every association is unique, every association is nuanced. Some are capable of printing high numbers that make little sense, and others are range bound, now and perhaps forever.  These two sales showcase the fall 2018 lake access market, and I think they both prove something important. Our market loves boat slips. It loves proximity. It loves a view. And sometimes it looks at historical sales patterns and determines they don’t matter very much.   To the buyer who just allowed me to represent his family in their Shore Haven purchase, a sincere thank you.

Lake Geneva Ski Season

Lake Geneva Ski Season

I write with disappointment today.  Today is opening day at Alpine Valley, the ski hill near Lake Geneva where my family spends considerable time during these coming winter months. Last week Monday was the day that I braved the cold, eschewed the wetsuit, and rode my Superjet from pier to pier and onto that winter trailer. The time lapsed from that day to this day exceeds one week. For the prior two years, the span was one week, no more. Last year it was three days. If you don’t believe me, check my Instagram. Everyone knows Instagram doesn’t lie.  This year I have failed. But I can’t run from it, because it’s something I cannot change. I can look to next year and seek redemption, but for 2018, the dye has been cast.

Alas, in spite of these failings, I know what must be done. I must ski. My son must ski and my wife must ski, and my daughter must board. She’s more of a falling leaf, but she has some terrific stickers on her board, which, as far as I can tell, makes up a significant part of the snowboarding culture.  We weren’t always this way, in fact, this ski thing is remarkably new to us. It was born of winter boredom. One winter not too many ago, my son was whining about there being nothing to do. This was before he had a phone, back when he still wanted to do something other than engage that mind numbing screen. Nothing to do, he’d say.  So I forced him to do something, and we went to the Grand Geneva to ski. He was awful, as was I. But something took and tens of thousands of dollars later, here we are. Skiers.

Those early days at the Grand Geneva were fine, but they weren’t great. The Grand Geneva is a complete resort, perhaps the most complete in the entirety of the Midwest, no matter how the boundary lines are drawn. But the ski hill isn’t much. It’s Wimot Northwest, which isn’t an enviable monicker.  Finding the Grand Geneva to be too small, even for our modest skill set, we were drawn to Alpine Valley. Alpine isn’t much either, but in local context, it’s as good as we can expect, and so that’s where we went. Several years later, that’s our hill, and while it doesn’t compare to any ski experience out west it is still a hill and the snow is still white and the skis still slide.

There are those among us who won’t stoop to the level of skiing our small Midwestern hills. Breck or bust, say the annoying people. But these are the sorts of people who might as well never swim in a pool ever again, assuming they’ve once floated in pastel caribbean waters. These are the sorts who won’t eat a sloppy joe, made with Open Pit and relish, because they’ve eaten at Alinea. These are the sorts that won’t ride in a Ford because they’ll only ride in a Porsche. Yes, the mountains offer better skiing. But can you drive to a Vail on a Saturday morning, ski for a bit, and return to your lake house for lunch and the afternoon football game? In this, we are the kings, and the west seethes with jealousy at our easy proximity.

Skiing makes the winter more meaningful, and I can confidently tell you this because it has changed the way I view winter. Winter is no longer to be abided as if we are long suffering prisoners, held against our will and in a place we dislike. Winter can be this way, and is this way for many. I find this to be a terrible shame. Winter isn’t for existing, winter is for thriving, and skiing, no matter if the hill is only 400′ tall and the cafeteria is maddeningly cash only, is an activity worth pursuing. It’s one of the things that makes your Lake Geneva house worth visiting in all seasons. You can’t ski in the city. But you can spend the weekend at your lake house and toss in a bit of skiing to help make the weekend that much better.  If you’re going to ski this winter, ski here, ski Alpine Valley, and don’t forget my advice: If you’re skiing on the weekend, get there in time for first chair. The midday skiing on a Saturday will make you long for the solitude of a boat cruise on Geneva Lake. At 2 pm on the Fourth of July.

Ivan’s On The Square Fish Fry Review

Ivan’s On The Square Fish Fry Review

The full title of this restaurant might be “Ivan’s On The Square Unique Dining”, but there’s a similar chance that it’s actually “Ivan’s On The Square, East Troy House Tavern”.  I can’t be sure. No one can be sure. Ivan, he’d be sure. But I didn’t see him there, and I don’t know if he’s the owner.  Ivan’s is dog friendly, according to the internet, so the odds that Ivan is a dog and that this place is his are strong to quite strong. Still, it was a Friday and a friend said Ivan’s was worth a shot, so I drove myself to East Troy’s small square and settled into a four top near the old-timey bar that guards the north wall of this in-town establishment.

If you’re a snob, then odds are you won’t admit to liking the smell of Burger King. If you look yourself in the mirror and allow your honesty to prevail, you’ll confess to being enthusiastic about that smell. Those smoky plumes rising from the roof of that greasy establishment,  carrying with them the smell of grilled burgers–there’s very little that I find objectionable to that pronounced smell. I would subscribe to the theory that they do this on purpose. They do it to draw your attention. The other day I drove by Burger King in Elkhorn, and the smoke was billowing from the rooftop. There were no patrons inside, no cars in the drive-thru, perhaps two cars in the entire parking lot. Someone had to be working there. Yet the smoke was rising, signaling to passersby that the new burger had indeed been chosen, and it was flame broiled.  The smell, man. The smell.

With that in mind, the smell in Ivan’s was of a particular cleaning agent. It might have been straight bleach, mixed with a bit of water and used to wash the tables and chairs, the bar and the windows.  It was aggressively sterile, and the smell didn’t help develop my hunger, and my hunger needs so very little prodding to develop.  The smell would bother me throughout lunch, and I thought that a terrible shame since the remainder of the lunch experience was delightful.  A note to Ivan’s, stop using the cleaning agent, and if you ignore my request,  then at least don’t use it shortly before lunch service begins.

Once I forced myself past the abrasive smell, I was onto the menu. It looked good. It looked like it should. The restaurant promises a bistro dining experience, and as far as I can tell the only thing that differentiates a bistro experience from a diner experience is nothing. The menu was full of sandwiches and assorted, proper offerings, each of which looked tempting in their own way. But it was Friday, and I am born of Wisconsin, which meant it was a day for fish, and I am a man made for fish. The fish here would be cod or perch, handed breaded and baked or battered and fried. The perch was only available hand breaded and baked. That’s a common theme for perch offerings in this region, perhaps owing to the more delicate nature of perch and its unwillingness to stand up for itself in a fryer.  We hacked the menu with my friend ordering the breaded and I the battered, so we could exchange a piece and sample one of each when the time came.

There would be little time to consider the wait. The fish was out in short order, perhaps less than ten minutes, which I can always appreciate. The plate looked nice, with two pieces of a rye bread, a lemon wedge, small tubs of applesauce, tartar sauce, and coleslaw, along with two potato pancakes and the aforementioned fish. The bread was placed on top of the fish, which warmed the bread nicely. There was no butter here, no foil wrapped rectangles, no generous bowl of soft, beckoning butter. But the two slices were pre-buttered, which is the first time I’ve encountered this method. I can’t say that I didn’t like it.

After swapping fish, I tried the battered first. It was crunchy and well salted. The fish was flaky and moist. The batter may have been beer based, but the beer flavor was muted, which is preferred, and I enjoyed this fish very much. It was also the first fish fry I’ve eaten in several months, so perhaps my bar had reset lower over the summer, and Ivan’s fish easily cleared it. The next piece was the hand-breaded. It was like a shake and bake breading, but it was quite well seasoned, perhaps even salty. The fish was similarly tender, which I thought to be a feat, considering the two fish were treated and prepared differently.

The potato pancakes were smaller and thinner than is my lasting preference. They were crunchy, which was nice, and they weren’t saw-dusty like some of the pancakes I’ve choked down on this tour. But there was something slightly odd in that I detected the slightest hint of ginger in the cake. I have a distrust of ginger, so the ginger bothered me, if only slightly.  I was in the company of one of these apple-sauce spreaders, but I did a fine job ignoring him as he slathered his applesauce on top of his potato pancake, like some sort of masochist.

The waitress was pleasant, if not overly so. My water went dry at some point during lunch, and as I write this morning I cannot recall if it was ever refilled. But Ivan’s does not disappoint, and the issues I had with the lunch, the bleach smell aside, were nuanced. The fish was excellent, the scene fitting, the little square in East Troy on a November afternoon, charming. A big thank you to my friend for the invite, and if two kids from Williams Bay can find their way to East Troy for some Friday fish, then perhaps you should, too.

Ivan’s On The Square Fish Fry 7.5/10

2087 Division Street, East Troy, WI

$10 hand breaded cod or perch, or fried cod

 

Bonnie Brae Sells

Bonnie Brae Sells

Over the past few years, there have been some Bonnie Brae sales.  Priced between $1.6MM and $3.8MM, these sales have all made market sense. The street is nice, the North Shore location desirable, the approach along idyllic Snake Road hard to beat. Of these sales, three in total, each property that sold has since been transformed by the new owner. One of the homes that sold was torn down to make way for a splendid new lakefront retreat. Another was significantly renovated and expanded, so much so that you’d be forgiven if you thought the current structure was built recently from scratch. The other home that sold has been improved, updated, cleaned and polished. Lakefront owners like to improve their homes, this much we know.

This week I closed my newest lakefront sale on Bonnie Brae,  for $3,800,000.  This one of wide frontage and delicious, dark, deciduous depth. The home was the renovated and remade Ryerson boathouse, one of the last few remaining on this lake, and likely the only one that stands on a large estate sized parcel of land.  You can read about it here, and watch the video below. It was a great house, and it was no wonder that it sold shortly after coming to market in late September. Certain sales befuddle and certain sales confirm what it is that we already understand. This sale was obvious. Beautiful dirt with a charming, historical home, all at the end of Bonnie Brae, which finds its way along Snake Road. What’s not to like?

For me, I remain appreciative and grateful to those clients and customers who choose me to represent their fine vacation homes. This market is loaded with competition. Every agent is the best, the newest, the most amazing. I’m just here in Williams Bay, sitting at this desk that’s really just a few long oak boards bound together by glue and screws. I’m thankful for the chance to assist all of my clients, and this seller was no exception. To the seller, a sincere and lasting thank you. To the buyer, who now gets to experience this place from the front row, congratulations.

November Swim

November Swim

There’s a thing about my dad that you wouldn’t otherwise know. He’s a quitter. Sure, he’s been married for a long time to my mother, and yes, he taught school in the same building for several decades, but don’t let that deceive you into thinking there’s some steadfastness here. He quits. He starts something and then when it’s started he’s worried about the ending. He leaves for vacation thinking about the drive home. He naps on a Tuesday because he’s worried about having to stay up until 8:30 pm four days later. He starts things and then he stops them. He’s worried, alright.

But none of these worries, and none of this quitting are quite as pronounced in July as they are in October. He will enjoy certain things, for certain periods of time. He’ll enjoy a swim now and then, though this is less than it once was and less than it should be. He’ll enjoy a boat ride, every great once in a while, which is also less than it once was and less than it should be. But mostly, he’ll enjoy July just fine. It’s Labor Day when things change, or the week before that holiday weekend starts.  September, the month we know to be one the finest months ever included in a calendar, this is not a month for him. Anticipation builds to a crushing weight, and while the rest of us are frolicking in the midst of a late summer glow, my dad is worried.

September fades to October, and the colors dim before they force out one last dying display. We like it when this happens. But my dad doesn’t.  This display is a head fake, and he knows it. He’s in this for the long haul, and he’s been here before. It’ll be winter soon. He can smell it in the air and feel it on his old skin. October is nothing but warm, colorful winter.  While others think of a trip to the lake or a trip to the cabin, he thinks only of that pier and those boats and why hasn’t the pier guy come yet? It’s October 10th, it’s 70 degrees, and winter is coming soon. There’s nothing else to worry about. Nothing else to think about. Winter. Soon. Repeat. Gaze at the fall colors all you want, youngsters.

When October ends, things get serious. Real serious. The boats the pier, the buoys and the ramp. The things that he worried about in July and thought about in August, and stressed over in September and nearly died over in October, some of them are still there. Still in view. Still in the water. That water that somehow hasn’t turned to ice yet. But it will, soon.  Water always turns to ice here, and he knows it. He can sense it. You know what happens when you don’t get your pier out in time? The ice comes and takes your pier away to the depths. He saw it happen once. Never again. Not on his watch. Winter is coming and he needs to get ready.

But he can control the boats, and so they’re already out. Tucked away in their barns where they spend most of their days. The pier, that’s still there. Still bothering his view and interrupting his winter thoughts with a stubborn summery holdover. But the one thing that really drives him to insanity is my little jetski. Yamaha’s Superjet, to be precise. It’s his white whale. The thorn in his side. His nemesis.  And I know this. Which is why I leave it in the water as long as humanly possible. Long after he thinks it should have been out. Long after everyone else thinks it should have been out. Long after the water has chilled to a level that humans should never experience against their skin. That’s why I wait, and that’s why this week I was left with no choice. I pulled the superjet.

I don’t pull it like you pull yours. I don’t call the company and have then deliver it to a heated storage unit. I wait until it’s November and my dad has nearly lost what’s left of his mind, and then I put on my swim shorts and I strap on the life vest and I coax that cold little engine to life. Then I drive it, near the piers and close to shore, inside the summertime buoys that have no control over my November path. And to the launch. The ride is cold. The ride is wet. To fall is to die, because this isn’t some sit down waverunner with seating for four. This is a water jet, built for those of us who were kids in the 1980s.  My feet lost feeling, allowing me to only notice the cuts left by the mussels and the rocks once I returned to the heated indoors. The ride is difficult, but I wouldn’t have it any other way.  It’s the last piece of summer, and I hang onto it as long as anyone ever has. Sure, it’s only to bother my dad, but it’s worth it.

 

Traps

Traps

There are things that I dislike about this business. You know this. I dislike the lack of respect that plagues this career, even while I understand it. I dislike the compensation model, as surprising as that might seem since that model continually supplies softened butter for my warmed bread. But mostly I dislike the markets themselves. I dislike the cycles, the ups and downs, the product that ebbs and flows, and the traps that it all creates.  The problem with these traps is that they always exist, in the good times and in bad. They exist here, there, and in every market in the world. I dislike these traps, and while I understand them I find extreme frustration in my inability to warn everyone against them. Perhaps when I do quit this job I’ll just write a blog wherein I identify market traps, because that would be fun. It would be like a devastating Zestimate, but instead of pushing a secret algorithm I’d actually explain the market and why that particular house, or condominium, or piece of dirt is nothing but a market trap.

Alas, I can’t do that now but I can do some further explaining of how to avoid these traps. I’ve written about this before, but after a couple of million words, at some point everything will be redundant. This morning I perused the new MLS listings and didn’t think much of them. A new ranch here, another condo there. But in the middle of it all, sticking out like a painfully sore thumb, there it was. The trap.  Do I possess some otherworldly knowledge of the real estate market? Of course I do, but that knowledge isn’t important when determining the location and description of these traps.

These traps exist on the lake, just as they exist in the country, but they are difficult to identify in those markets. Why? Because those are nuanced markets that fluctuate based on the whim of the wealthy. This is why you can see a lakefront house listed for a price that doesn’t make any sense, then a few months later you can watch it close. Then, while still in your befuddled state, you can see that house meet the wrecking ball. Lakefront markets often won’t make sense, just as high end off-water vacation home markets won’t.  In the same way, is a house in West Palm Beach worth $135,000,000? Is a spec house in Beverly Hills worth $200,000,000? The answer is not really, until someone buys it.

That’s why we’re ignoring the vacation home or otherwise wealth influenced markets and we’re focusing on neighborhoods where primary homeowners live. These neighborhoods can be in Williams Bay or Wheaton, Elkhorn or Elk Grove Village. For that matter they can be in  Toledo or Topeka. A primary home market that operates without the influence of extreme wealth typically follows the same rules, no matter the geography. The housing traps exist in hot and stagnant markets alike, but they’re far more likely in hot markets. There’s a simple reason for this.

Developers, be they professional or hobbyists, are increasingly challenged to find adequate inventory inside an accelerating market. Knowing this, they look to fringe locations, fringe neighborhoods, areas that aren’t quite there, but certainly might be next. In larger cities, this sort of thing does exist, it’s called gentrification. But in primary markets that are existing without the promise of Google or Amazon moving in down the road, these fringe areas are likely to remain fringe areas for lengthy periods of time. Developers know this, but they’re counting on low inventory to trick you into not knowing it.

There’s a neighborhood you like. There’s even a house you like. But after you looked at the house and before you could get your offer in, that house sold. You made the decision to move, to upgrade. Your loan approval was in place, and you started the mental exercise of moving, but then your house was no longer available. No worries, you’ll look around a bit more and find something else. After some time, there isn’t anything else. Nothing in that neighborhood, nothing nearby. But Zillow showed you a new idea, this one of a similar home in a different neighborhood. Sure, that neighborhood typically sells for $250k and this house is $450k, but in the good neighborhood that house would be $500k. You like the “discount”, and you pursue the new home. Congratulations, you’ve just fallen into a trap that is going to bury you when the markets calm, or worse, reverse.

Today in Walworth County, with limited inventory and a still-vibrant primary housing market, these traps exist in every single municipality. Want to walk into a huge mistake in Williams Bay? That’s possible.  Want to bury yourself in a terrible and lasting mistake in Linn Township? Welcome Home!  I’m guessing the situation is the same in your town, no matter where it might be. What to do to avoid these mistakes?  First off, work with an agent that wants you to find the right house more than he/she wants to make a sale. Once that’s done, question everything. Why should I pay $300k for this vinyl ranch when the three vinyl ranches down the road are $225k?  Most importantly, if you’re in the market for a primary home and you’ve been noticing a tempting home that appears to be overpriced for the neighborhood, just settle down and watch it. If it sells, congratulate the sucker who bought it. If it doesn’t sell, congratulate yourself for avoiding the trap.

Cedar Point Sells

Cedar Point Sells

After some good old fashioned pot stirring on Monday, it’s time to get back to the business at hand. Specifically, the business of the lakefront market. A few weeks ago I listed a home on Cedar Point, right up next to the tippy top.  Like all listings, the work to secure and bring that property to market had been done over the prior six or more months. Now, at this date in late September or early October, the work would show its result. A new listing, $2,595,000 on the outward facing corner of Cedar Point. Photos were scheduled for this property, but the weather was dark and dour and I am not one to impose a false blue sky above one of my listings. Nor am I the sort that would paint our Midwestern water with a Caribbean brush. Because of the weather and my photographer’s schedule, the listing would be held back for a couple of days. Just a couple.

When you’re dealing with lakefront homes, a couple days is often the difference between an available home and a sold home. In the case of 254 Circle Parkway, I ended up selling the home on the very day I brought it to market. A showing, an offer, a contract. A closing at full price less than a month later.  That’s how this business works every once in a while, and in the case of this Cedar Point home, the right buyer was made aware of the property and that buyer didn’t hesitate. Many buyers view this market as one homogenous mass. A home over here is the same as a home over there. A view to the South is just like a view to the North. These buyers have it easy, because geographic preference is meaningless. If you can choose to be a sort of buyer, choose to be this sort of buyer.

But for others, location is everything. It’s the neighborhood they grew up in. It’s the neighborhood they admired, always from afar. It’s the street where grandpa had his cottage, the basic one without fancy that meant everything to that family so many years ago. When you’re a buyer in this market and you are face to face with a buyer who has geographic bias, you should admit your defeat and move towards the next listing. The one that might be here or it might be over there, but it doesn’t matter to you, remember?

With my recent lakefront sale, I’m happy for the seller whom I represented and the buyer I assisted in accomplishing what I believe was a lifelong goal. In the end, a Cedar Point home with five bedrooms and a dynamite boathouse sold to a family with Cedar Point ambitions. In the world of real estate, where much of it is cutthroat, this was a sale that should have happened, and I’m appreciative to the buyer and seller for letting me connect the dots.

Big Foot Referendum

Big Foot Referendum

I went to high school in the basement of a church.  To be fair, not all classes were in the basement. Our homeroom was in the kitchen of Calvary Community Church, which was on the ground level. Even still, there were no windows. I’d like to think the lack of windows helped me focus on my studies, but it didn’t. Our gym was carpeted, and while that may seem like a disadvantage, can you imagine the superior grip? Even though I later learned that wood gym floors have some bounce to them that purportedly help an athlete jump higher, I never jumped as high as I did off of that carpeted concrete.

That little gym wasn’t much to talk about.  But a kid from our little school would later go on to become the all time collegiate scoring leader for the state of Michigan.  It seemed that practice was indeed the key to this whole sportsing thing, and that if you shot free throws every day for an hour after school while your school teacher parents were finishing up their days, you’d get pretty good at them. I’m reminded of the scene when little Hickory High walks into the state championship game. Coach Dale AKA Hackman instructs his players to measure the length of the court and the height of the basketball rim. Basketball, it seems, is the same sport whether played on a carpeted gym inside a high school or a massive arena.

With this in mind, you should understand why I have a hard time swallowing a $7.8MM athletic field for the Big Foot School District.  Currently, the fields look pretty nice to me. My kids attend Faith Christian School, which is the same school I attended. Today they have a fancier gym than we once had, but their soccer fields are still pitched awkwardly and the weeds maintain an easy advantage over the grass. In spite of this, every once in a while our little school puts together some mighty fine sports teams. The facilities currently enjoyed by Big Foot are leaps and bounds better than anything little FCS could ever hope for. Yet, the cry for bigger and better remains.

It’s easy for a plan like this to gain momentum. Coaches and teachers build up the improvements as though they are indeed necessary. Parents love the idea of their kids being part of such a superlative scene. People in town buy into the ignorant pitch that if you love the kids, you’ll love spending money to improve their education. But it’s easy for me to wish for these children to receive a fine education and at the same time realize that a $7.8MM sports facility is not crucial to that goal.   But what is the goal? Is the goal to turn out well-rounded children who will one day become well-adjusted, productive adults? Or is the goal to build a sports facility that the parents and coaches will feel tremendous pride over? These two goals are not the same.

That’s why I’ll be voting no next Tuesday. The referendum isn’t required, and I hope it fails. If Big Foot wants to attract more students, it should work on its academics first, and everything else a very distant second. The pitch from the school district is that taxes will go down no matter if you vote for this referendum or not. Ah, but there’s a trick in that math. Yes, they’ll go down either way, but do you know how much more they’ll go down if the referendum fails? The answer is: More.  Let’s stop abusing tax payer dollars on vanity projects, and let’s vote to keep our district fiscally responsible.

 

Lake Geneva YTD Performance

Lake Geneva YTD Performance

When you’re part of an industry that puts significant focus on calendar year performance, you tend to look up in late October and realize you’ve run out of time. In the same way, I have a theory that I gladly share with dinner guests and random acquaintances, but this theory has to do with life and not real estate. The two, no matter what your agent says, are not the same. My theory supposes that when a man, or a woman, is in their late 30s, they are no longer about to be something. They are no longer going to do something. They are no longer on their way to some different goal. In your late 30s, when you look in the mirror, you likely are what you are. Some people find this depressing. I find it oddly comforting. When the 2018 real estate market looked itself in the mirror this morning it wasn’t about to be something different. At this late date, 2018 is what it’s going to be.

But what has 2018 been, exactly? When the year began, I was worried. Worried about the stability of the stock market, worried about inventory, and slightly worried about interest rates. If the first two caused were gaping knife wounds of worry, the last one was a paper cut, and not one of those finger tip ones, either. If sellers wouldn’t sell into this market, then buyers would slowly lose patience, and they’d either jump ship and run with their tail between their legs to Michigan or some other terrible place, or they’d just hunker down in whatever it was that they already owned and wait for the inventory to arrive. At this point in 2018, the inventory did arrive, but it didn’t exactly satisfy the masses of buyers.

Still, inventory presented and then inventory sold. Some aged inventory sold as well, and it this late date in 2018 we’ve closed 20 lakefront homes with three more under contract as of this morning. The only three lakefront homes under contract (per MLS) are all my listings, which is nice. For context on that lakefront performance, consider YTD 2017 we had closed 24 lakefront homes. Does that mean the market has slipped? Of course not. It just means 2017 offered more inventory to choose from. The better context is to look back to 2012, the year that marked the low point in our recent cycle. YTD 2012 we had closed just 16 lakefront homes, and that had little to do with inventory and everything to do with worry.

The broad vacation home market, those homes with lake access with typical pricing between $200k and $1.7MM, has had itself a solid year as well. Inventory deficiencies plague this segment as well, but in spite of that concern we’ve managed to close 58 lake access homes in 2018. An additional 12 are under contract as of this morning per MLS.  The condo market is fairly similarly well, with 31 YTD sales of condominiums possessing lake access to Geneva. This is a vague measurement, as it includes some bits of inventory that I wouldn’t normally consider when adding up these totals (like dockominiums, etc), but it matters if we’re just assessing the overall volume performance of the segment. YTD 2017 printed 34 sales, and YTD 2012 had closed 30.  Keep in mind, this is including Abbey Springs and others, so it isn’t a pure measure of the lakefront condo market performance.

Speaking of that lakefront condo market, it’s moving quite nicely at the moment. There are two lakefront condominiums under contract as of this morning, leaving just 8 true lakefront condo units on market.  As we steam towards the end of 2018, expect to see some sellers following the move of my Bay Colony seller, as price reductions hope to tempt buyers towards a few pieces of overlooked inventory.  My Bay Colony listing, by the way, is now $799k, with a slip and likely the most high end interior space of any condominium on Geneva lake, excepting Stone Manor, of course.

Expect inventory to remain low through the end of the year, but don’t be surprised to see some new bits and pieces come to market over the next 30 days. Price reductions should increase over the coming two or three weeks, and the market will wind down by printing much of the remaining pending sales. 2018 has been a good  year, and looks to leave us staring at 2019 with an eye on the stock market, and the hope for new inventory.

Above, my Bay Colony offering. $799k for so much lakeside luxury. 

Cold And Frosty

Cold And Frosty

What a mundane life it would be if we missed mornings like these. Mornings like this. The cold morning where you’re not really cold. The foggy morning where nothing is obscured, but everything is hidden behind the thinnest of veils. To think that people miss these days on purpose. What a mistake. What a tremendous and enduring mistake. There’s nothing like these days. The heat and warmth of an early southern morning feels wrong to me. Why wouldn’t I want to be here, to see this, to feel the way a morning like this feels? If I were captured and hauled away, I’d forever miss this sort of morning. This distinctly Wisconsin morning, where the sun will come soon enough, but not before the fog has its say. This is one of those things that we do better than anyone else, and to miss it would be an eternal shame.

I suppose it’s just another cold and frosty morning, and there’s not a lot to say.

Vista Del Lago Sells

Vista Del Lago Sells

After a market downturn occurs, we must set our aim towards the goal of complete and thorough recovery.  If that goal is to return a specific market segment to full health, then there are several steps that must be followed. There is no shortcut to this health, and you cannot out-volume a market issue any more effectively than I can out-lift my horrible, no good diet.  If the market was bad and we wish the market to be good, then the steps must be followed.

The first step is to weed out any weak hands. Financially troubled owners have a tendency to drag on a market, negating any market gains with the constant, worrisome threat of foreclosure. If volume is printing but prices are still falling, this is generally acceptable, and will, over some period of time, work out in favor of the ownership. But if there are pieces of weak ownership that have the ongoing possibility of some form of distressed sale, this creates market drag that volume alone cannot overcome. This scenario occurred in the South Shore Club in the early years of this current decade, and the only way the SSC moved forward was by eliminating those trouble spots, which unfortunately only occurs after an owner has lost their home to the bank.

With the weak spots identified and fixed, then we need volume. Plenty of volume. We need sales in all price sectors within that segment. Some prices will be low, and we cannot be too concerned about this. If an average price in the segment is $500k, and over a particular duration there are two sales around $400k for every sale around $500k, that’s not a big deal. It’ll feel awful, but remember, the goal is not immediate health but rather a path towards it. It’s painful to watch low sales print when you know they’re creating an issue for those who wish for higher sales, but  I never said this path was going to be fun.

With the weak owners flushed and the volume on the rise, the third step is bright spots of higher valuations. A sale here and there over the expected average of the segment. If we’re in this $500k range, then we’ll need to see some sales print higher- $525k, $550k. There will still be lower sales, sure, but the momentum is achieved by raising the expected ceiling.  Higher sales beget higher sales, and all it takes is one or two of these sales to move a market higher.

Step four is the strengthening of volume. We need more sales. More and more sales. New listings, shorter Days On Market. Movement, that’s what we need now. Liquidity is important to both establish the market pattern and introduce new, energized ownership to a segment. The reason new owners matter is because they tend to make improvements. Remodel the kitchen, update the bathrooms. New appliances, new tile, new paint. This shows a potential buyer that they’re surrounded by neighbors who value what it is that they own. Increased volume is vital to return a market to health.

The last step is a tightening of inventory.  True price gains cannot be realized if there is ample, sufficient inventory. We need limited inventory, tight conditions. We need buyers asking about product in that particular segment, be it a specific association, condominium, or price range. Without this last, crucial step, a market cannot return to full health. If you doubt these steps, consider each and every step has occurred in sequence within the South Shore Club over the past eight years. The good news for the local condominium market is that Vista Del Lago appears to be following the same, successful path.

Last week, I closed on another four bedroom unit at Vista Del Lago. I sold one in May for $520k, and I sold this recent one for $515k. Both sales represent meaningful volume for this association, and both sales prove that Vista is on the path towards full health. If you’re a condo buyer on Geneva, you generally have options with two bedrooms. Some association have three bedroom units, and some have four bedrooms. But the four bedroom condominiums tend to be pricey, located in higher-end associations like East Bank. Vista offers four bedroom units for $520k, and as long as families want a view of the lake, a slip, and a place to sleep, Vista will have a market.  Speaking of the market, there are only three available units at Vista this morning, and none of those are four bedroom units.  Vista isn’t yet finished with this plan, but as you can see, it’s well on its way.

Decisions

Decisions

On a day last week, in the afternoon of that day, there was a choice to be made. The sky opened after a period of rain and a period of warmth. The day had been hot. Hot for October but hot for any month, really.  Only the most ardent admirers of heat could pretend that it wasn’t. It was humid, too, and revelers took to the water and captioned their posts something about this being the last. This is it. This, this span of a few days during this month, this was all that we had left.

That afternoon, after the sun warmed and the southwestern winds pushed in the summertime air, there was something of a choice in that sky. To the south, towards Fontana and beyond, the sky was dark. Not formidable, not stormy, but darker than pale. It looked like it might rain. Like the it might spread over the lake and then the houses and the corn and bean fields. To the East, to Williams Bay and then Lake Geneva, the sun was still shining, the sky still blue. The brightness was a stark contrast to the darkness, the separation jarring. A decision would need to be made.

In Williams Bay, the sun. The warmth. A chance at some warm fall, or some slightly cooler summer. The leaves were just beginning to change, and if you squinted and looked away from the maples you might be forgiven if you thought August had somehow returned. There was a chance to live out another day, or another afternoon, or at least another moment, under that sun and in that place. A warm place. Summer, extended. To sit on a bench on that northern shore and be cleansed by the pleasant southern wind.  To crunch over shore path leaves with t-shirts on, to take the boat for another ride on top of those blue, excited waves. To embrace what is almost over.

To the south, to Fontana, the clouds. Ominous, but not really. The temperature was the same, but it looked colder. It had to be colder. The gray sky hanging low over the field that was, just a week prior, standing tall and upright. Now the field was reduced to stalks, and the leaves on the trees looked frail. They were fluttering from view, ripped by that wind, matting on the ground under the tires and boots. Boats were being hurried into their winter caves, hatches were being battened. Winter was coming, but first a blustery and cold fall. The colors failing, the wood stacking, the fireplaces lit.

Two options, one choice. I could live out the summer into October, or I could move to fall, to the colorless gray that I know so well. I chose the latter, because I’m ready for this new season. And I was heading to Fontana anyway.

389 North Lakeshore Drive

389 North Lakeshore Drive

There are three things that attract people to houses. Yes, there are renters who rent based on price and convenience, those who say they won’t be pinned down, won’t be tamed. But for the rest of us, the regular people, houses simply attract us. The reasons are many, sometimes bold reasons like colors and sometimes nuanced reasons like the way a front door beckons when you first pull into the drive. But really, there are three main reasons that houses either attract us or repel us.

Lake Geneva Lakefront Homes For Sale

First things first, there’s the approach. Curb appeal,  some would say, but that’s assuming you can see the house from the curb. The approach itself matters to homes, which is why homes have gates. It’s not to keep people out so much as it is to provide a visual enticement that something important lies beyond. If I had a gate on my house, no one would stand out front and wonder who lives inside, but they might stop and think there must be something slightly interesting back there.

The lot itself, that property beyond that gate, the trees and the grass and so many boxwoods. How is that lot? Is it wide enough, deep enough? Is it hilly or flat? Does it catch my interest. And if I’m looking towards something, what is it, exactly? Just more trees? Too much grass? Basic landscaping, or elevated landscaping? A path to the lake that feels right, or a path that feels like the owner gave up on the project long before every making her way to the shore?

That lot, where is it, exactly? Is it on the side of a busy road? I was driving with my kids last week and reminded them that under no circumstance shall they ever purchase a home adjacent a busy road, to say nothing of an actual highway. The reasons are obvious, but mostly because there is never an actual reason to do so. The nuance of the front door positioning on the house and the quality of the backyard is meaningless if the house faces that busy road. The lot, the thing that we need as much as a leak-free roof and some hardwood floors, is the single most important part of home.

Lastly, it’s the style of the home itself. Tudor or Cape Cod, Colonial or Mid-Century? What suits your style? Moreover, what suits the style of your market?   A recent plague on construction in this immediate area has no real symptoms except a general lack of consistent style. If the home is to be traditional with a twist towards modern, like Michael Abraham might encourage, that’s terrific. If the home is traditional to the core, with bold, classic finishes, that’s fine as well. There is no error in design as long as the design is consistent. But whether or not that design attracts the interest of buyers and passersby alike depends on the style itself.

With those aspects of desirability understood, I introduce  389 North Lakeshore Drive in Fontana. Where is it? Along the curvy, wooded road that bends and whispers from Fontana to Williams Bay. What’s there? Only some of the most beautiful newer homes on the lake, mixed with some of the traditional homes that effortlessly anchor our scenery to the past. The approach is as it should be: A simple gate with no pretension.  The entrance drive turns through the trees, past a fitting four car detached garage because who would want a lakefront estate without room for a few extra toys?

The home itself is more than 10,000 square feet of turn key efficiency. There’s a main floor master suite, dressed in marble. Upstairs you’ll find five more bedroom suites including a bunk room that’ll hold nearly everyone you know. On the lower level that walks out to the water, there are two more suites, a theatre room and a screened porch that does double duty as a summertime gym.  What’s more, this home is nearly new. Finished in 2013 by Orren Pickell, this shingle style home doesn’t waiver from what it is.

What is it? It’s a shingle style home on 2.4 lakefront acres built recently to exacting standards and elevated for a hassle free lakefront experience by the current owners. Where is it? It’s on the North Shore of Fontana, with views long and wide, a short stroll to Gordy’s and Chuck’s even while the home and property feel tucked away and secluded.  What does it look like? It looks like the sort of house you’d build if you were in the market to build a new house here. But why would you do that when this home is here, now, available and practically perfect? $7,895,000

Entry Level Lakefront Market Update

Entry Level Lakefront Market Update

I’m not sure if there’s a more interesting segment in our market than the entry level lake access market. While other segments exist because particular homes move in and out of that defined value range, the entry level market is truly the only range for which their is no defined price structure. When times are good, entry level might mean $1.5-2MM. When times were bad, we learned that entry level meant $800k-$1.2MM. If we look over any particular decade in our past, there’s nothing consistent about the pricing of this segment. In that, it’s a curious segment, but beyond that, it’s also our most important lakefront segment.

Yes, yes, we know liquidity at the top end is the most unique attribute of our market. We know our liquidity makes every other vacation market in the Midwest look like a low quality timeshare rental. But still, in spite of that robust upper bracket strength, the entry level market is the market that matters to more people. The goal of vacation home buyers, if the budget affords, is to find lakefront.  Knowing that the entry level market is directly connected to the upper-end off water market, we know that if the entry level market struggles then the off-water market struggles. If the off-water market is strong, then that must mean that not only is the entry level market strong, but it’s light on inventory. These two markets are connected, and 2018 has proved that once again.

This isn’t about the off-water market, even though it is remarkably strong and liquid as a direct result of the low inventory and sales patterns of that entry level lakefront market. This is about the entry level market itself, and what 2018 has done to it, and for it.  This year, there have been four lakefront homes sold between $1.1MM and $1.25MM.  All four of those properties had around 50′ of frontage, and three of the four were on Walworth Avenue in Williams Bay. If you’re familiar, Walworth Avenue is the road to the North of Pier 290. The other sale was in the Elgin Club.

The fact that there have been four sales in this segment isn’t surprising. It is somewhat surprising that the prices, in spite of the spectacular market activity of 2018, have been somewhat stagnant in that tight, low buck range. While the homes that sold were certainly habitable, it wouldn’t be a stretch to suggest that they are all in need of some additional attention. Whether that comes in the from of wide-scale renovations or surface improvements, that is up to the new owners. Will any of these four be scraped to make way for a new home?  No one, except the owners, can answer that question.

Walworth Avenue hasn’t shown any real strength over the mid-million dollar market. There’s a giant newer home on that road, one that represents a significant investment, but is that an individual pursuing what is best for that individual, or is that a market market-minded play? Will Walworth Avenue soon be home to more tear downs, to more new construction? And if so, will that new construction find favor in the market?  I honestly don’t know the answer to my own questions. I’m inclined to suggest that new construction in that location wouldn’t be a wise play. But I know the tight inventory markets on the lakefront between $1.8MM and $2.5MM, so it wouldn’t be crazy to suggest an owner could pursue new construction here, even though the neighborhood hasn’t shown the ability to support it.

There have been a few other happenings in the entry level market this year, notably a pending foreclosure in the Lake Geneva Highlands and a private lakefront sale on Outing Drive. You’ll remember the Outing house, as I had it for sale earlier this year, and another agent had it for sale for a spell as well. The home sold in what appears to be a private sale for a price (as shown in the transfer rolls) of  $1,525,000. That’s a reasonable price for that house. The Highlands lakefront is one that was on market last year and under contract (per MLS), but failed to close. That home is likely valued in the mid $1s, and I’ll be curious to discover if it comes back to market as REO, or if someone takes a stab at it through the sheriff’s sale.

Today, the entry level market is once again void of inventory. The lowest priced home with frontage is over in Trinke’s, a property with the lagoon in front of it, priced at $1.85MM.  The next available lakefront is to the East of there, priced just over $2.2MM. This is a tight market, and a difficult one for would-be lakefront buyers.  What’s interesting here is that the lack of inventory and consistent sales really hasn’t translated into valuation gains in this segment. I’d expect that’ll change if the market stays tight for too much longer. Maybe it won’t change at all until someone breaks the pattern on these entry level streets and builds something new. Something that seems out of place, something that doesn’t make sense. Or at least it’ll feel that way until everyone else does it, too.

 

Cedar Point For Sale

Cedar Point For Sale

A couple of weeks ago, I started working on a new listing.  This lakefront house was in Cedar Point, on the very top of the point, where the view is as wide as it is long, where days last and last, where sunsets, no matter the season, cannot hide from view. The house was to be listed at $2,595,000, and I was ready to work on the sale. Photos were scheduled, details were arranged.

But then it rained. And it rained some more, and when it wasn’t rainy it was misty, which would be a terrific name for a horse. Photos were scheduled and the schedule changed. The weather didn’t cooperate. But in the mean time I told a couple of buyers about this house, and before the photos could take place, before the MLS listing could be set to ACTIVE, before all of those visible sales efforts could commence and before most agents knew about the property, the new listing on the hill went under contract to a buyer who knew he needed to be in the know. It’s in the MLS now, but it’s already sold.

Compass, Et Al

Compass, Et Al

It should come as no surprise that there’s a competition to be what’s next. In this context, we should capitalize What’s Next.  If you own a business that makes money, or you own a business that has a lot of customers but fails to make money, you know about private equity. You know they want to buy your business, to pay you a multiple that makes your head spin. Should you sell? Probably.  Those in this investment world that are tasked with finding the next big thing. Recently,  everyone has collectively decided that real estate is that thing.

There’s no debate that the business of real estate is big. The debate is over what that business is going to look like in the future. Will traditional brokerages and their traditional models continue to dominate the national landscape? Or will there be something new, something else, something more.  SoftBank’s Vision Fund recently invested $400MM each in two real estate “tech” companies. One is Opendoor, one is Compass. If you haven’t heard of these two companies, don’t feel bad about it. In time, no one will remember either of their names.

But I jest.  Compass is a rapidly growing real estate business.  The founder was on CNBC last week and talked about his “platform”. There’s all sorts of “tech”, apparently. But what is Compass? Well, it’s a real estate company. What do they do? They list your home for a fee and then they try to sell it. What’s their secret? Nothing, really. They have signs that light up at night, which is cutting edge, or so someone thought. They also have proprietary technology that enables their agents to better serve their customers, and to provide AI insights into markets. This sounds nice, and the fine folks at SoftBank really bought it, but is Compass revolutionizing the real estate business?

Headlines out of Chicago will claim it is. That’s why top teams of agents are leaving @Properties and Sotheby’s and the like to join this new, exciting, dynamic company with the signs that have lights on them. You know, so people can see them at night.  Consumers might assume there’s something here. Something unique, something rare. Something New. But what they don’t know is that agents are being bought. Brokerages are being paid handsome amounts of money to sell to Compass. Agents are typically happy with some free calendars from the title company. Heck, I don’t even get those anymore. Compass is paying them real money to join their company, and in the case of top agents and teams, that might mean signing bonuses of a million dollars or more.

Compass doesn’t want to talk about this, because they want the consumers and their target audience, the agents, to think there’s something here. @properties did the same thing over the past decade as they grew a real estate behemoth. They told the market that they’re something better. Something rare. Something unique. But really they were a traditional real estate model banking on a consumer who was looking for whatever was next. Something New, that’s all this game is about.

Compass is growing, Compass is moving into your neighborhood, but why? The answer, as with all answers relating to the growth of real estate companies, is that they’re simply poaching agents. There’s nothing new under the sun, especially in a business where the entire business lives and dies on one simple thing: a real estate agent.  Every real estate company that grows only does so by taking agents from other companies. These agents flee what’s old, and move to what’s next. They send out postcards. They issue a press release. I’m What’s Next!

OpenDoor wants to buy your home, I think. They also just bought a traditional brokerage in California, or maybe Arizona, so they want to be in the regular business of real estate as well. Maybe they’re hedging their own business model, assuming not everyone will want to sell their home for cash at a market discount.  This model has been around for ions, or at least a few years, and it’s working. Opendoor is reinventing the business of real estate, or so they think. They’re just like Amazon and Uber, the CEO says.  They’ve raised fortunes, led by a who’s who in the world of investing, including a big fat investment of $400MM by SoftBank. SoftBank knows one thing, they want in on whatever is next. Is it Opendoor?

Opendoor has a current valuation over $2B, yet they only operate in 19 cities more than five years after their launch. Why aren’t they in more cities? Why aren’t they everywhere? Well, because the model relies on algorithms to determine the current value of your home, as well as the value of your home in the coming weeks and months.  Opendoor will buy your home, without a pesky agent, and without that pesky market exposure, and then, once you’ve moved out and closed your deal with them, they’ll resell your house for a profit. That’s it. They’re the modern day tech company that has replaced the yellow signs on the side of the interstate that promise “I BUY HOUSES CASH”.

The model works as long as the market is appreciating. It also works as long as the market has a very tight pattern of sales. Would Opendoor work in Lake Geneva? Not in a million years. Will it work in Winnetka? Nope.  Will it work when the market falters? No.  The reason is simple. When a market stalls, consumers generally fail to recognize the slowdown for a reasonably long period of time. They are defiant. They are insistent. They are stubborn. If OpenDoor needs to buy your home for a 5% discount to actual value today (in an escalating market), what will they offer you in a declining market? 90% of the value? 80% of the value? Will consumers be willing to sign on for this initial, deep cut, without finding out if the market is indeed as poor as OpenDoor is telling them? No, they won’t.

Compass closed their last round at a $4.4B valuation. In 2017, Compass closed $17B in sales. There’s another real estate company in these United States, one called Realogy. Realogy owns some brokerages that you may have heard of. Some small companies like Century 21, Caldwell Banker, Sotheby’s, ERA, Better Homes and Gardens, among others. Realogy is a publicly traded company with total 2017 sales over $500B. Realogy’s market cap? $2.5B. The world, it seems, has gone mad.

As a small independent broker in a small Wisconsin town, I’m not immune to the changes in the real estate business. Competition increases every year, and much of that competition comes to my office to beg me to work with them. They want me to be part of What’s Next. But in that, there’s an admission, and I can already see What’s Next. They don’t believe in their own models. They don’t think they have anything proprietary. Not Compass, not @properties, not OpenDoor, not Realogy. The real estate business, at the end of every long day, is only about one thing: A Real Estate Agent.  No matter the broker names, no matter the affiliation, the agents will remain. They’ll just change their name tags and wear a different color jacket, but if you think they’re somehow different because their sign has a nightlight on it, then you haven’t been paying attention.

Glenwood Springs For Sale

Glenwood Springs For Sale

There’s a reason you read this blog. That, of course, was a lie. In actuality, there are many reasons you read this blog, but perhaps there are are only two or three really good reasons.  The market commentary might be the most valuable asset of this site, but that’s followed very closely by the fact that I like to leak new listings on this blog well ahead of the time the rest of the agents and the MLS learns about them. Today, there is no commentary, which means there’s a new listing to discuss.

This new listing is one that you may be familiar with. I sold it two years ago to the current owner, who is now looking on to what’s next. The property, 434 Oakwood in Fontana, is likely the most dialed lake cottage I’ve ever sold. Correction: it’s the most dialed lake cottage I’ve ever seen. In spite of my propensity for hyperbole, I assure you there is no exaggeration here. This property has it all, and it’s perfect.

There’s a view, a private pier with shore station for a 25 foot boat. There’s proximity. In that, we have completed the trifecta of Lake Geneva off-water value. Pier, View, Proximity. Collect your winnings at the counter. But beyond that, there’s something more here. The house itself is filled with high end luxuries that leave even lakefront homes unwell with envy. It’s so perfect that I’m not even going to describe it. I’m just going to leave those pictures there, and leave this video here. $1,295,000. If you want to transform your weekends, please let me know.

Wish

Wish

I used to wish for things. Lots of things. In the third grade, I wished that a girl I liked wouldn’t move away. She did. Later, I wished that the tight ankle roll I’d apply to the hem of my jeans wouldn’t come undone during the school day. But they always did. Later still, I’d wish for a listing or a sale, I’d hope for something to break my way.  After a decade or so of futility, they did.  As I’ve grown older, my wishes seem less important than they once did. In the third grade, the act of that girl who didn’t even like me moving away was very devastating, my wish rendered useless. Today, I don’t even know what I’m wishing for. At least I didn’t know, until a couple of weeks ago.

Times were, I’d spend this month wishing for more. Wishing for the sun and the heat, for the calm water and the continuation of a summer that never left me feeling full. I craved summer, and how much more delicious that summer was that came after everyone else thought it had ended. I’d boat and I’d swim, I’d work and I’d play. I’d live my best life in September. The life I was destined to live, the life I wished for without knowing it. Typically, on this late September morning, I’d be out there, living.

But not today. That’s because it rained on Labor Day, and it rained a lot. It rained the day before, too. And maybe the day before that, and a few before that one. It rained too much, and we all knew it.  What we didn’t know was what would come next. A swarm. A plague. When we hid in our houses on Labor Day, we bemoaned a soggy end to our summer, but we didn’t understand the greater evil that was brewing. Or breeding, as it was. Those puddles left behind, those low lying areas of mud and wet, those corners of shade under the trees where the grass won’t grow. The rains came and the rains went, but they left behind those incubators of terror and we didn’t even know it.

My house is normally a nice place to live. It’s in the country, but it’s close. It’s a rare combination here, something out away from the people but something so near to it all.  During the month of September, it wouldn’t be a surprise to drive by my house in the evening and see my son shooting hoops. I’d play as well, only for a while until my back hurt and I realized that I will never, ever, regain whatever semblance of basketball skill I used to possess. My wife might be out tending to her chickens.  We’d be enjoying the cooler, calm afternoons, aware of their fleeting nature and wishing for just a few more weeks. Things would normally be pretty, pretty, nice.

Those rains, though. Those rains and those puddles and then that sunshine and that heat. The nicest two weeks of the year followed that dark, stormy holiday weekend, and those puddles warmed and billions of biting demons crawled from that yard soup. The mosquitos, normally an afterthought by this time of year, came back with an ungodly vengeance. They bit and they ate and they sucked and they ruined. Basketball tonight? No thanks. Lawn needs morning? Pass. Garbage cans need to be taken to the road? What, and walk that 500 feet through a winged, sucking gauntlet, the likes of which no one has ever seen?

Today, I’m no longer wishing for summer. I’m just wishing for a hard frost. Damn the flowers and the rest of the fall niceties. If we have to kill summer to kill these bugs, I won’t lament the cost. This time around, I’m only wishing for the death of the mosquitoes and their banishment to eternal hell,  and no other wish I’ve ever wished has mattered nearly as much.

Black Point Sells

Black Point Sells

One of the many benefits of this strong vacation home market is that I get to test my theories on a daily basis. These theories were first penned when the market was in rough shape, which was just a few years ago in reality but so much farther away in the minds of 2018 buyers. The theory relating to the off-water lake access market over $1MM was simple. If lakefront homes were plentiful in the $1-2MM range, then off-water homes in same range would suffer. Why buy off water when the same price put you in the front row? In the same way, if $1-2MM lakefront homes were scarce, then off-water homes in the range would attract buyers. Lake Geneva real estate can be quite simple.

Simple as it may be, the theory was difficult for many off-water sellers to understand. During those dark years, most off-water homes that sought to capture a $1-1.5MM sales price ultimately languished on the market and fell victim to the price erosion that is a hallmark of lengthy market exposure. Most of those homes ended up selling, but rather than finding buyers in that $1MM+ range, most of these homes sold between $900k and $1MM. Buyers rejoiced, sellers wept.

Over time the entry level lakefront inventory dried up, leaving available only true cottages on small lots in modest settings. As that inventory shrunk, buyers turned their attention to the off-water homes that meant something. A slip, a view, a pool, some privacy. Maybe a combination of all of those. In the fall of 2016, I printed the sale in Loramoor for $1.625MM. Then another sale in Glenwood Springs for $1.1MM. Then, in 2017, a super high priced print with no slip in Oakwood Estates north of $1.2MM.  In 2017, another in Maytag Estates in the same range. Then a sale in Fontana north of $1.3MM. The market was moving, and buyers were once again looking for off-water properties simply because the on-water options were so scarce.

Last month, a new offering in this range. This one on Southland, or Black Point, as the tax records would show. $1.699MM for a few acres of wooded bliss, some terrain, a pool and a slip, a large home with pedigree, outbuildings and more. This was a property that the market rarely offers, mostly because it has no true rival. There are locations where off water homes will sell upwards and north of $2MM, but those associations are rare and historically light on inventory. The Lindens, Black Point, The 700 Club, Loramoor, Glen Fern. These are the rare associations, made that way by decades of low inventory and highly polished homes. These are the associations that matter to this segment, and this particular home was among the most rare inside even unique settings.

That’s why a buyer whom I was pleased to represent jumped. We closed on the house last week for full price, which is nothing to be ashamed of. In this context, full price was required, and full price was still less than the seller had paid for the home in the fall of 2011 when the market was in awful condition.  To further prove the strength of this off-water market, consider the home that would come to market just a few weeks ago in the 700 Club. That home hit the MLS at $1.495MM and promptly received multiple offers before finally settling at a contracted price that is rumored to be far over the ask. The market doesn’t always love off-water homes over $1.5MM, but if you give the market something unique in a highly desirable setting, the buyers will find it.

To this buyer who let me guide them through this curious segment of our vacation home market, I thank you. There’s an opportunity at this property to transform it into something without equal in our market, and I’m hopeful that the end reality matches your unique and exciting vision.

New Subdivisions

New Subdivisions

In the morning I wake up, clean up, dress up (down), drink the espresso that my wife kindly makes me, take my kids to school, and go to my office. I do this five days a week. On the other two days,  I skip the part where I drop the kids off at school. When I get to the office, I turn on the lights, sit down at this desk, and check the MLS. I check the new listings and the sold listings, the reduced listings, too. I think about what to write about. I think about the weather and the scenery, the lake and the sky. I think about the trees and the tinge of whatever color might be deepening or fading.  I think about the lakefront market, the lake access market, the vacation home segments in their pieces and as a whole. And then, when I sit back and consider everything I just say, “man, people are paying lots of money for really basic subdivision houses.”

Most days, I ignore those primary market thoughts, and write instead about lakefronts and the sort of real estate that interests me and my clients. But today, the primary market interests me, because this trend is established and it’s serious and I can no longer ignore it. The primary market is hot, all segments, all prices, so long as we’re talking about less than $400k. Some of the primary neighborhoods are selling for more than $400k, but not with particular regularity. Those primary home subdivisions that I wrote about with fervor a few years ago have come to life, and buyers appear to be content to purchase their own version of vinyl perfection.

When I wrote about the state of the primary market, the subdivisions were mostly idle. Some construction, but not much. In the three years that have followed, the construction market has boomed. New homes are being built with frightening speed, slapped up in a matter of a couple months. Efficiency, claims the builder. Haste and synthetic materials, counters this Realtor. But still, the market is hot and I’m curious to see what, if anything, today’s buyers have learned from the past market cycle. That cycle, in case you forgot, was especially hard on neighborhoods for the simple reason that platted neighborhoods tend to function as their own specific market. If there are four comps on the road you happen to live on and all of the homes were built to a similar standard at a similar time, you can bet your value will be seriously impacted by the sales of those nearby homes.

To check on the market, let’s look at a few random, recent new home sales in the new home subdivisions on the west end of the village of Williams Bay. I won’t identify the owners or the addresses, but let’s look at sale price ranges and mortgages pulled to gauge the strength of this homebuyer. That strength is important simply because the market isn’t going to appreciate forever (too bad, OpenDoor), and once the market stalls, those with the smallest percentage of equity are the most likely to face difficulty. The first sale was well over $400k- a price threshold very rarely surpassed in the primary market.  A check of the mortgage reveals the buyer only financed around 80% of the purchase. Good for them, and good for this subdivision.

Down the road, another sale. This one also over $400k, this one to a buyer who appear to have financed around 85% of the purchase. Another winning data point for this subdivision, as another strong buyer has entered the fold. The next sale was a bit under $400k, and that buyer looks to have put less than 4% down.  Another sale in a different subdivision, this one in the lower $300k range, this one to a buyer who put around 5% down. Another sale, this one just over $300k, the new owner putting around 4% down.  There are other examples, some with 20% down, others with less, but the concept here is simple. If you’re buying into a hot subdivision, paying hot subdivision 2018 prices, and your neighbors are, perhaps 40-50% of the time buying their homes with less than 5% down, is this is a solid model for sustainable values if we head into a down cycle within the next 4-6 years?

Personally, I don’t think it is. That’s why I wish primary home buyers would exercise caution as they rush to these newly drywalled homes. I understand the desire to be in a new home, but I’d rather be in an older home in an existing neighborhood than be surrounded by a constant cloud of low-money-down-construction-dust. An interesting side-note from my market studies of 2015 and 2016 is the desirability of subdivisions that are close to schools. If kids can walk/bike, or otherwise easily get to a school, the subdivision tends to be fairly hot. If the subdivision is outside of town, without a nearby city center or grade school, the subdivision is still somewhat stagnant. If you’re a primary buyer considering a new home priced $450k and under, please be cautious. I say that fully knowing caution doesn’t play a role in a hot market, no matter how badly I wish it would.

 

 

Lake Geneva Video

Lake Geneva Video

It’s been three years since I had my homepage video filmed. That was a terrific video, if I do say so myself. But this last week’s weather was so perfect I decided to have a new homepage video created. I hope you like it.

 

 

Bonnie Brae Boathouse

Bonnie Brae Boathouse

For each of us, there is something unique in our story, some important event in our past, or in the past of our parents, or our grandparents, or our great aunts and uncles, that led us to this place.  For the Ryerson Family, the events were rather curious. As the Great Chicago Fire raced through the city, decimating businesses, destroying homes, killing indiscriminately and ruining lives, there was but one large city lumberyard spared from the carnage: The lumberyard owned by the Ryerson Family. When the rebuilding process began, one family was prepared to supply those efforts. And when the ash settled and the city was restored, the Ryerson Family had not only played a major role in those efforts, they were rewarded with lasting riches.

Martin Ryerson was the son of the lumberyard owner, and as a son of privilege he attended CPS before ultimately graduating from Harvard Law School. At age 25, he was married and working his law practice, content in his city life. At age 34, his father died, leaving him the family business and making him one of the richest men in Chicago. His interest in education and civic matters led him to help found the University of Chicago, where he played a key roll in the design of the campus and served for decades on the board. The Ryerson Physics Laboratory still operates to this day. Due to his involvement with the University, he visited Lake Geneva to tour the brand new Yerke’s Observatory. After that visit to the lake he was hooked, and the same year purchased the property that would become known as Bonnie Brae (Pretty Hillside). At one point, the estate measured  nearly 100 acres and possessed more than 1200 feet of lakefrontage on the north shore.  If you think impulse buys are some sort of new thing, created by our impatient generation, Martin Ryerson would quickly disagree.

A year after purchasing the property and initiating a large scale, multi-building construction project, Martin turned his attention to the water and hired the Racine Boat Company to build his 72′ steam yacht.  At the time, the residents of Geneva would take the train from the city to the lake, and board their elegant steam powered yachts which would chauffeur the owners to their lakefront homes.  Hathor, one of a small handful of original steamers still on Geneva to this day, played host to elite society, including Henry Ford, John Rockefeller, Harvey Firestone, and a fairly well known impressionist painter by the name of Claud Monet.

With the addition of Hathor, Martin was in need of a place to store her, so he built a boathouse at the water’s edge, to the West of the main house, on a remarkably level section of lakefront.   For the next 34 years, the Ryerson’s would spend their fanciful lives traveling, building up the cultural scene of Chicago, and relaxing lakeside at their Bonnie Brae.   It was at the lake where Ryerson would die, at the age of 75.  Upon his death, 90 percent of his wealth was given away to the Field Museum, The Chicago Art Institute, and his cherished University of Chicago. Some time later, the large estate was divided, and one four acre parcel with 185′ of level frontage and a deeply wooded hillside was assigned to his original boathouse.

Over the years, the boathouse was renovated into a single family home. Additions over recent years made for a proper master suite.  An extra garage was built for storage. Bathrooms were updated with marble. Today, the original Bonnie Brae boathouse, with that long wooded drive off of Snake Road,  is offered for sale. $3,895,000 for 185 feet of frontage, 4.3+ acres of fabulous depth, and a 4,742 square foot house that is one of the last remaining boathouses on Geneva Lake. Martin Ryerson was friends with Monet and the Rockefellers. He studied in Paris and London. He founded universities and lasting civic institutions. But most of all he was just a guy who loved spending time at the lake, swimming off his pier and bragging about the speed of his boat. Today,  you can own his boathouse, and you’d be wise to act as quickly as he did in 1897.

 

Buena Vista Sells

Buena Vista Sells

It’s a curious thing to watch buyers as they watch the market, and the houses that exist inside of that market. Buyers are attracted to various things, to shiny, for sure.  They like marble and they like glitz, and even the most staunch defenders of Location First cannot help but be dazzled and drawn by the varying shapes and sizes of housing perfection that exist here. But beyond those things, there are locations that speak to buyers in different ways. One buyer might find a location to be busy, dense.  One buyer sees that scene and they decry their lost privacy, their potential involvement with their neighbors, their exposure. And yet another buyer comes to that same scene and feels at home. They feel at peace with those same surroundings. They thrive off of the activity, the proximity, the scene. To each his own is just a saying, until you come to these shores, at which point it becomes a most steadfast rule.

This week I closed 274 Sylvan in Buena Vista for $2,775,000. The house was special not just because it shared that glamor of sparkly hardwood and expensive appliances. It was a vintage home made to live like a modern one, but still filled with the original touches that made it feel rooted on that shore.  Buena Vista isn’t an association for everyone, but that’s only because there wouldn’t be enough houses to go around. There are tennis courts, an ample lakefront park and pier system, and then these scant few lakefront houses. A dozen, perhaps. These few lakefronts on this Northwest shore of Fontana Bay offer a classic lake experience combined with dynamite views of the lake and an easy stroll to Fontana’s lakefront scene.

To speak to the unique nature of this now sold offering, consider the last MLS sale to come to market here was this same house, when I sold it in the spring of 2011. Who can know when the next Buena Vista lakefront will come to market?  Like every lakefront sale on this lake, once a property is under contract or sold there are numerous buyers who wish they had bought it, and this home had its fair share of regret filled buyers. That’s because it wasn’t just an old cottage on the lake. It was an old cottage with a recent addition and important updates, but it still oozed that vintage appeal. That appeal isn’t easy to find on this lake, especially if you’d like to find it in Buena Vista. To the owners who allowed me to represent them in this sale, I thank you. To the new buyer who gets to enjoy their weekends in an entirely different frame of mind, congratulations.

Discernment

Discernment

A few weeks ago, I wrote an offer on a property on behalf of a buyer. This is no feat. There is no trick to this. It’s just a form written by a gaggle of attorneys and I’ll I’m charged with is the ability to fill in a few blanks. My son, at age 15, if given a few practice runs, could handle the document just fine. This buyer had looked at a few houses, decided he liked one of them, and we made the bid. Then we waited.

Sellers in 2018 are not uniquely motivated,  so this property that had sat on the market through the season now ended.  Our bid came in low, relative to the asking price, but high, relative to the actual lasting value of the house. We bid, we negotiated, the seller stalled, and in the midst of this another buyer materialized and purchased the home. My buyer was left out, in the cold. Disappointed, sure, but aware that other properties will, and must, exist.

There are brokers today feasting on the new market attitude. Many of these brokers are newly initiated, fresh to this game and racing to gobble any scraps that they find.  Some have held “clinics”, or so they’re called, to advise buyers on how to craft the winning bid. Others take the social media to explain how they maneuvered to get their buyer’s offer to be the one that the seller accepted. They are the victors, the capable and skilled sherpas who have led their buyers to the top of the heap and who will now rightly claim their commission based prize. All of this is fine, but it’s exactly what’s wrong with the business of real estate and the market of 2018.

We are programmed to want to win. My daughter wants to win her volleyball games. My son wants to be the valedictorian. I want to lead in the year end volume tallies (spoiler alert, I won’t win this year).  Buyers, well, they want to win, too. They want to win that house with the imperfect floor plan and the leaky basement. They want to win because they think the house will work for them, sort of. But mostly they want to win for the sake of winning.  Their agents prod them on, pushing them to bid higher, cleaner, quicker. The goal is the house, after all.

What house? Well, that doesn’t matter. Any house.  It’s just the pursuit that we find motivating. That brings us back to my failed bid and my buyer who very well might have felt great disappointment over not buying a house that they indeed liked.  Was it a big deal that we didn’t get this particular house? Not really. Would I have liked them to buy the house? Sure. But the market today isn’t separated by those agents who succeed in securing the house and by those who fall short, it’s separated by the agents who know the difference between a house worth pursuing and one worth leaving for the uninformed, undiscerning masses.

When the market was soft, discernment was key. Negotiating tactics were key. Timing was key. Today, with a heated market and throngs of buyers clamoring for lake homes, these prior skills are brushed aside in favor of urgency.  A few weeks ago, I wrote a contract on behalf of a different buyer and we were met once again with a stubborn, inflexible seller. We pushed forward and bought the house anyway. Why?  Because the house was worth the pursuit. The house will have lasting value in the market because it is unique, rare, both in setting and in style. Is it nice to win every bid? Of course it is. But there is contentment in knowing when to walk away and let someone else buy an overpriced house.

Seasons

Seasons

In the northern reaches of this state, where monuments to large men and larger fish draw worshippers and summer starts and ends in the span of barely more than a month, there are two seasons. Sugaring season, and the other season. If you’re of the persuasion, that is. Maple trees freely offer their sap for a couple of weeks each early spring,  causing the men and women to take to the woods and spend their days and nights in their sugaring shacks.  They’ll collect and boil, collect and boil, and soon enough they’ll have have enough maple syrup to last a few days, maybe more. It depends on the season.

In those same woods, but farther north, there’s another season. This one overlapping with the sugaring, and running both in the fall and the spring. It’s still one season, mind you, no matter if it comes around twice in the same calendar.  For a while at the start of winter and the end, and at least a bit of the in between, the rainbow trout run out of these great lakes and into so many little streams. They charge in on the first heavy fall rain, and again on the first early spring melt, intent on fulfilling their reproducing responsibilities. The men of the area go out to catch them, the better men throwing flies of varying sizes and intentions, the lesser men reeling back in large spoons or worse, soaking sacks of spawn on the bottom down line from a heavy hunk of lead.

A bit after the steelhead start, the whitetail rut, another season for another group.   Cautious animals abandon that deep seated instinct to chase a more meaningful goal. A doe scatters and bucks chase, while the men who aren’t fishing paint themselves with markers and drizzle urine on their clothes before scaling trees to sit so very still for so very long. Maybe a buck will snort and scratch its way down that path, the one that the hunter cut in August for that very purpose. Maybe the buck will come close enough so the arrow or the slug will find its fleshy target. Maybe it won’t. I’ll cheer for the hunter in theory and out loud, while I quietly but fervently root for the buck.

Down south, another season for another set. Morel season comes and morel season goes, and most of the world is blissfully, but ignorantly, unaware. If a morel is harvested, then ten thousand more wither in their place. This haunts the morel hunter, and the need to capture as many mushrooms as possible in such a short, temperamental window dictates swift and decisive action. This is no prey, in the sense that the hunter and the fisher aim, but it is as confounding of an opponent as the most wary buck or skittish steelhead. This season lasts but two weeks, maybe three, and as soon as it starts, it’s over.  The hunter must prepare, the hunter must pounce, and the hunter must endure the threat of ticks and the anguish that can come from pretending to be unaware of private property boundaries.

Here, too, there’s a season. Just one, really. Off of Geneva Street, just east of the beach, there’s a small road that runs from the north and towards the south from the start of Cedar Point Park and just barely into it. It’s a short road, stubby. An unnecessary road, one that everyone could do without. In preparation of summer time, the village drops a gate there, for some reason or another, to keep passersby from wandering down that little road.  There is no celebrity residing there, no special or unique house worthy of protection. It’s just a road. And in the summer, it’s blocked off. But after Labor Day, the gate is removed, and the thoroughfare of Bayview Road is once again connected to Geneva Street.  In Williams Bay, there are only two seasons. It’s either Bayview closed or Bayview opened, and I don’t have a particular preference.

 

 

One Last Summer

One Last Summer

Somewhere, sometime, there was a decision made. It was a decision based on indecision, really. This would be it. A lifetime here, in this place, but the times had changed. Someone had died. Someone had graduated. Someone had moved. Their fishing hat, with lures he’d never used, still sitting on the mantle. The sailing shirts, accumulated over years of school, still stacked on the closet shelf.  The place looked the same, but something was amiss. A change would be needed, no matter how badly everyone wished that wasn’t true.

Life brings change, no matter fervently how we root against it. There are times I wish for change as well. I live in the country now, content with it all. Content with the chickens and the bees and the dogs running free. But at times, like last night when the air was soaked with moisture and my expansive lawn needed cutting for the third time in a week, I thought maybe it was all too much. Maybe a house by the lake would be nice, with neighbors and a pier and a lawn that wouldn’t need so much tending. Maybe something simpler, something different. Maybe that’s what I need.

We’re all probably the same in this way, and that brings us to the family that decided in January, or last November over a great meal, or in May on that weekend when we remember, that it was time to make a change. The house had been a good house. A capable host. The catalyst for so many things, so many great times, so many memories, some good and others bad. But life changed, and when life changes, houses are often the casualty. The family made the choice back then, to spend one last summer at the lake.

It’s September now. Still summer, sure, but different summer. Old summer. Summer in the present addressed like it’s in the past. Summer, ish. For those families that made the decision, that last summer has run out. The bell has tolled. The clock has struck. The time is now.  If you’ve ever sold a house in this manner, you know this feeling. Regret. Indecision. Resignation.  But time wears on, and movement is inevitable. We’d all like to keep things as they are forever, to feel the permanence and comfort of what’s already known. But sometimes, there has to be a last summer. To those families grasping for one more day of that last summer, we salute you.

 

Emagine Theater

Emagine Theater

I’d like to become the sort of person who only spells theater theatre. I’d like to place emphasis on the A, while I’m at it. But I’m not sure I can pull this off, as much as I’d like. I don’t even really like movies all that much.  The concept of a Summer Blockbuster is lost on me. Who are these people who go to movies in the summer? Why are theaters even open then? Shouldn’t we only go see movies in the winter, when it’s cold outside and we’re hungry for popcorn? Why are we so drawn to bright lights and loud sounds?

In spite of these concerns, I made my way to the new movie theater in Lake Geneva this week. It wasn’t because I wanted to go see a particular movie. And it wasn’t because I was uniquely bored. I wanted to go to see what this new space was all about. I wanted to see if the new group had dialed in the movie experience, which is, as I mentioned, an experience that I care very little about.  I wanted to give the community a review of this newcomer, so I loaded my family into the car and pulled up to the Emagine Theater for the 5:10 viewing of The Meg.

As I already said, I didn’t want to see this movie. But my daughter has an affinity for Jaws, and so the natural progression to a prehistoric killer shark was unstoppable. After a series of partially completed roundabouts we had arrived at the old Showboat Theater, just outside of Lake Geneva on Highway 120.  The old theater was closed and subsequently sold, thankfully to the Emagine Theater group out of Michigan.

The website for Emagine promises that their theaters are luxurious and modern, with reclining seats and food service far beyond the typical popcorn and Mike and Ikes. They have a bunch of locations in Michigan and Minnesota, one in Illinois, and now one in Wisconsin.  I had bought two tickets to this B movie on my phone earlier in the day. $28 for four tickets to the 5 pm show, including a $4 service charge. That charge, the woman at the ticket counter informed me, would be waved if I signed up for some $10 year long pass, or something. Since I’m not a regular movie goer, I didn’t listen to her.

The interior of this old, boring building was sleek and modern. Fancy, almost. There’s a bar area with a fireplace (as I recall), a large concessions counter with hot food options and the typical movie fare. We ordered a pizza, which they told us would be brought to our seats, and popcorn.  My kids pleaded for water, but why would I buy water in a bottle when there were perfectly good drinking fountains right there in the lobby?

The service, as expected, was quite clumsy. No one seemed to know exactly what was going on, which didn’t bother me so much, as I was there only for the spectacle of the space.   After we were directed to our particular theater, we took our seats. Well, they weren’t our seats, as the ones I picked out and paid for online were supposed to be in the middle of the theater and were, instead, located in the last row. No matter, we had the entire room to ourselves. The lack of other viewers may have been because it was their second night open, or because it was a 5:10 show on a Wednesday, or because we were watching The Meg. I couldn’t be sure.

The popcorn was good, and when the pizza was brought out it wasn’t terrible. Too much cheese and the sauce was odd, but overall it was fine and we ate it all rather quickly. The screen was large and crisp even if the pizza was not. The seats were large and leather, capable of a full recline. I nestled into my chair, tilted it back, and marveled at all of the years we suffered through stiff-backed movie chairs. How awful things were for us back then.

The new theater is nice. It’s better than any area theater by miles, and likely rivals the very well appointed Marcus Theaters in New Berlin. It’s a good thing for the community, a good thing for the immediate area of that new Highway 12/120 interchange. Unfortunately, this new place will deliver the death blow to the Geneva Theater downtown Lake Geneva.

If you’ll recall, that old downtown theater was renovated in just the past two or three years. I was glad to see the renovation, as the space was too visible to go unkempt ad unimproved. While the exterior of the building looks nice, even if a bit art deco-y for my taste, the movie experience there is rather mediocre.  The seats aren’t the fancy new style, the screens are small, and the common areas boring. There was a great opportunity here to deliver a unique product, instead, the group took some city money and performed a relatively low end renovation. If this group doesn’t transform the Geneva Theater into a live music/live plays type venue, it’s going to fail, and soon. With the shiny new Emagine theater down the road, they don’t stand a chance.

 

PS. Skip The Meg

Abbey Springs Market Update

Abbey Springs Market Update

There’s a simple thought relating to markets like ours that supposes a specific pricing segment should prove active in different market segments. The theory would say that if $300-500k condos are selling, then those condos should be selling whether they’re on Geneva Lake, in Geneva National, or Abbey Springs. In the same way, if a $400k lake access home in Loch Vista Club is in demand, then a $400k lake access home in Cedar Point Park should also find an audience. The theory isn’t very difficult to understand, but markets don’t always behave in the most obvious ways.

Consider the lake access market on Geneva Lake right now. There are 34 active homes priced under $700k. Of those 34, no fewer than 12 are pending sale. That’s a very active market segment, with offers flying and summer contracts set to close next month. If that market is supremely busy with buyers seeking a reasonably priced vacation home experience, then the other specific vacation home segments in a similar price range should be similarly active, right?

Abbey Springs currently has 19 available condominiums and single family homes. Of those 19, the MLS shows not a single pending contract. Year To Date, Abbey Springs has closed 18 condos/homes, which isn’t awful, but it certainly pales to the 24 such sales for 2017 YTD. If there weren’t inventory, I’d understand the difference in activity, but there is inventory, even if it is a bit light.

In the same way, Geneva National has 57 available condominiums and homes priced under $700k. Of those 59, twelve are pending sale. That’s a decent amount of activity, especially for Geneva National, which has had its fair share of ups and downs over its lifespan. If the lake access market has approximately 35% of its under $700k inventory under contract, and Geneva National has 20% of its under $700k inventory under contract, then what’s eating Abbey Springs?

The answer, likely, is nothing. It’s just the unique nature of the Lake Geneva vacation home market.  That’s why I write this blog as often as I do. Markets here hinge on such low overall volume that a good weekend can right any listing ship. If there were three or four new contracts written in Abbey Springs last week that have yet to show in the MLS, just like that we’d see Abbey Springs marching in lockstep with the remainder of the vacation home segment.  If you’re trying to figure out the exact rhythm of sales at the lake, don’t.

Lake Geneva Realtors

Lake Geneva Realtors

There’s nothing that makes me hate my chosen profession more than leafing through a local glossy magazine. There are lots of glossies here, most notably that Summer Homes For City People glossy. That’s a heck of a magazine, but you knew I’d say that.  In spite of my magazine being the only magazine of importance and relevance, there are others that persist. I made the mistake of thumbing through one of these magazines over the weekend, and what I discovered left me weary for this business of real estate.

The issue isn’t Realtors, themselves. They’re fine, really. The issue is advertising. The issue is what we choose to say about ourselves in the hope that someone will believe us. The glossy I read through featured heaps and heaps of advertisements for brokers and their Realtors, and I thought I might lend a bit of MLS based fact checking to the advertised claims.  I’m all for self promotion (see: this blog, my magazine, my life, etc), but there’s a reason why my self promotion is heavy on specifics: I want to be taken seriously.

Without further ado and in no particular order, the ads I stumbled upon:

One claimed 33 reasons why a brokerage is super amazing. I did some research this morning and found that the Walworth County average closed sales (2018) for those 33 particular reasons was $1.67MM. For perspective and context, during 2016/2017 I averaged over $4MM in sales, per month.

Another ad, this one really fancy looking. The agent has been closing lakefront deals on Geneva, since quite a long time ago. Some MLS searching to provide background on the advertisement revealed that indeed this agent has put together single family lakefront deals on Geneva. Four of them, in total.  I, also have closed a few lakefronts on Geneva. 48 of them since 2010, and more before that, but alas, I don’t even have an ad in the magazine.

There’s some mention in other ads of agents winning awards from their companies. Watches, gold circles, platinum things. This is nice for these agents and their host companies. One such company gives away a watch the first year you sell $10MM with the company.  I sent an email to the company asking if I’d qualify for 4 watches for 2017 based on my production, of if I’d be capped at just one watch. (I jest)

Ooh, here’s another ad. This one is sleek. Super sleek.  This agent sells lots of houses that afford the lake lifestyle. To review the claim, let’s look through the MLS…. That agent has sold one home with lake access or lakefront on Geneva this year. One.  This does not make for a terrific year, but it does make for a great ad.

There’s no need to go on and on, as I think you have likely grasped my concern. As a consumer in the market you’ll need to figure out which agent you should use to represent you. Sadly, the lakefront market on Geneva is hot, which is attracting more and more agents to the lakefront fray. You can’t blame them, as it’s the biggest pie and everyone longs for a slice. Unfortunately, no matter what the ads say, not every agent is a lakefront specialist. Not every agent has success in specific market segments. If you’re an agent and you do a  terrific job selling in Geneva National, then put that in your ads.  I have a horse farm for sale (it’s amazing, really), near Clinton, Wisconsin. The fact that I have this farm for sale does not make me an Equestrian Property Expert.

This morning, it’s just another reminder, I suppose. If you need an attorney to help with your Last Will, please don’t hire a personal injury attorney. If you need a mechanic to replace your timing belt, don’t drop your car off at the bicycle repair shop. If you need a Lake Geneva area Realtor to help with your purchase or your sale, choose an agent with a pattern of success in the specific segment that has your attention. If you’re looking for a Realtor to assist you in Des Moines or Hinsdale, do the same.