2015 Lakefront Condo Year In Review

2015 Lakefront Condo Year In Review

2015 Lakefront Condo Year In Review

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

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

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

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

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

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

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