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Housing Affordability

Housing Affordability

In a meaningful way, the housing market in these United States is driven by policy that is pushed by the National Association of Realtors (NAR), and various state and local associations that operate as ground troops. The local associations take their marching orders from the state associations in the form of campaign endorsements, bill endorsements, these sorts of things. As the housing market in the great State of Wisconsin continues to outperform, there is much talk at these associations of one thing: Affordability.

A simpleton might assume that increasing prices are good for people. After all, if you own a house in Wisconsin, there’s a terrific chance that it has appreciated in value over the last five years. This should be a positive, something to be praised and hoped for, something that policy should be driven to assist. But rather that rejoice over increasing prices, the powers that be have taken to wishing for more affordability. Affordability, they say, that’s the key to everything. Without it we have nothing.

But what about the guy making $48k per year living in the $199k ranch in Elkhorn? Does he matter at all?  Where does housing affordability rank in his list of concerns? Is he worried that his house he paid $197k for ten years ago is now, finally, mercifully, worth $219k? Is he upset that his value has increased, finally, after that lost decade?  Does he wish for his local Realtor and the state board to do something about this recent increase in price? Is he sad that the new buyer can no longer find a home in his neighborhood under $197k?  Of course not. Joe Homeowner is finally happy, because he’s finally building some semblance of wealth.

Why knock him down now?

This is the strange thing about real estate. National types want to push for affordability. State types, the same. Local governments, affordability. County Master Plans, large engineered to foster affordability. Ready for this? Affordability is for the birds. It’s a way to keep a market, a county, a municipality, stuck in the mud. I’ve heard often this year that there’s nothing to buy. Nothing cheap, nothing sort-of-cheap, nothing sort-of-expensive. The markets have gone mad, and this is a bad thing, or so those in charge say. We need to make Walworth County affordable again (MWCAG never caught on, in spite of the red hats).  But why? Why must we remain more concerned for future residents than for the financial well-being of our current residents? What’s so great about cheap housing markets?

Does a housing market need to be uniform at all times? Do we always need to have 10 homes for sale under $100k and 10 homes for sale over $1MM?  Do we need to avoid imbalance? We had a significant imbalance from 2009 through 2015- where were the housing affordability stalwarts then, when affordability reigned?  Were they concerned over too much inventory, just as they’re concerned over too-little inventory today? Why can’t we allow normal housing cycles to exist, without the need to stifle the upswing with added inventory? I fought off bad development over recent years by making market based arguments as to why we didn’t need them. The market today is more healthy, more robust, with inventory being absorbed at a wonderful clip. Why stymie the growth with a wet blanket soaked to the core with $199k vinyl ranch homes?

You’ll be reading much more about housing affordability in the coming weeks and months, perhaps  years. Pundits and housing analysts will bemoan rising prices. Go ahead and let them be sad, but if you’re a homeowner, enjoy the ride. You deserve it. At the end of the day, why do you suppose Realtor Associations want more inventory? To aid in prices? To assist the needy? Try again. It’s so Realtors have more houses to sell, and they’re in the business of helping Realtors. That’s fine, but don’t ever mistake association policy for something that seeks to benefit Joe Homeowner.

Worms

Worms

Egg crates, that’s what you want. But not the egg crate itself, just the material. Whatever they make egg crates out of, that’s what the worm factory wanted.  They searched high and then they searched low, and they found the company in Indiana. Central Indiana, to be more precise. The business of egg crate material isn’t exact at all. A few pounds of finely milled saw dust, a few dashes of coloring- gray, sometimes blue, and a bit of glue. How much glue depends on the humidity, with great variations possible depending on the time of year in this part of Indiana.

The factory was originally only capable of producing these egg crates. 12 eggs to a crate, maybe 18, with a folding lid.  There’s a factory in Kentucky that can do the larger quantities, vast sheets of egg crate material capable of holding 12 dozen eggs. They stack and they layer and the cartons filled with eggs find their way to the muffin company upstate. But this factory only does the smaller variety, and that’s why they were perfect to recruit for the business of making egg crate worm cartons. The plan was flawless. The sawdust cheap, the glue practically free. And fishermen wouldn’t care if their worms came in gray or blue cartons, which was good, because everyone knew the blue was more expensive.

A mold was made, the batter was poured, and 7-10 business days later the worm company received their first shipment of cartons. The engineer, or at least the man whose work shirt claimed he was, had improvised the worm filling machine to accept these new sized cartons, and the first run was an astonishing success.  The cartons would be fed as sheets, 12 containers wide and 100 deep, where the worms and their newspaper-laced dirt would drop from the hopper into each individual dozen-sized serving.  Farther down the conveyor track, the cartons would separate, like pulling apart a delicate monkey bread muffin, and the worm filled cartons would whiz towards the inspection station.

This station was messy. As you’d expect. The station was originally intended for three inspectors, each with a swiveling chair, but rarely would there be more than one.  Bill showed up on time each day, ready to inspect. His job was simple- to pull out the worms that were cut into unfortunate pieces by the hopper dispenser.  The carton comes, the half-worm is identified and picked out quickly. Bill had a five gallon bucket on the concrete floor next to his chair, and after some months in that chair the motion of picking the wounded worm and dropping it into his bucket was so fluid that sometimes the engineer would drift away from his desk just to watch Bill in action. A poetry, of sorts, Bill the poet and his prose the movement, or so the engineer often thought.

Bill didn’t mind. He knew the bass under the Highway 67 bridge happily accepted his wounded worms just as greedily as they would his whole worms.

After several decades of turning out the finest egg-carton worm containers, the factory turned out its last sheet and closed the doors forever. Plastics were where it was at, and plastics were an entirely different game that the company wasn’t capable of playing.  Worse yet, the company knew these new containers would blow out of the fishermen’s boats and float across the lake, washing up on shore in a tangle of seaweed and trash.

Lake Geneva Club Sells

Lake Geneva Club Sells

There are certain things that I know without the slightest inkling of doubt. I know that summer days are best spent lakeside. I know it, you know it, remote villages in Africa know it. I know that pick up trucks should not be lifted as high as the pick up truck at the gas station right now is lifted.  You can’t know this, but you’ll need to trust me on this one. It’s just too high. I also know that when a charming cottage in the Lake Geneva Club is listed for $600k it’s going to sell pretty quickly. These things are all different but all the same. They are summer-time truths.

You knew I’d sell this cottage. It wasn’t just my intuition. It was obvious. Yet, the first few buyers who looked at it didn’t find it to be an ideal fit. So the property sat on market for a bit longer than I would have thought, and last Friday it sold. $592k for cottage perfection, a boat slip, a large double lot, and easy access into the Lake Geneva scene. The property doesn’t require much explanation, it’s just an easy cottage in mint condition with a transferable slip and membership to a fantastic lakefront association. Beginning, middle, and end of story.

But the property does give us some insight into the broader market, and that insight should be shared. I sold this cottage in 2013 for $525k.  If you’ll recall, our markets in 2013 were in decent shape, but activity was much less intense than it is today. The price recovery had begun, but only modestly. I’d guess that by the summer of 2013 the broad Lake Geneva vacation home market was 10-15% above the cycle lows.  With a fresh sale at $592k, we can ascertain that the market has risen roughly 15% since that date in 2013. If we assume that the market was perhaps 15% better in 2013 than it was at the bottom of 2011, then we’re looking at a 30% increase from the bottom of our market to where we find ourselves today.

If we go a step further and remember that our market was knocked off 30-40% between the high of 2008 and the bottom of 2011, then it’s not a stretch to say we’re within 10% of our prior cycle highs. That’s not a universal truth, but it’s a pretty decent data point considering the history of this individual sale.  The reason this particular sale is a decent indicator is because the cottage, while maintained, was not significantly upgraded over those years. If I show you a sale from 2013 of an old house and then show you the same fully remodeled house selling in 2017, that’s not a very good data point as the property itself was not merely riding the market wave, it was forcing an increased valuation due to the work that was completed.

Today, there are only two homes for sale priced under $748k with transferable boatslips.  That’s remarkable, really. To make matters worse, both of those slips are far from ideal. So what’s next? What does this segment of our market do now? Well, likely nothing. Entry level lakefront inventory is light, which means the owners of a lake access home with slip don’t really have any immediate upgrade option tugging at them. Without that option to upgrade, the only people selling will be those who are no longer wishing to own a Lake Geneva vacation home.

A big thank you to the seller who let me represent them both in this sale and in their upgraded home purchase. And a big congratulations to the new buyer, who finally gets to look forward to the weekend.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

Wow. That’s really all there is to say. Wow. Maybe Wowzers. The lakefront market on Geneva Lake is as heated as it has been since the summer of 2007.  I was a player in the market then, but I wasn’t a large player in the lakefront market like I am today, so my view of that prior frenzy wasn’t from the front row. Today, with this front row seat underneath me, I find the market to be breathless. How I pine for the darker days when buyers had a few moments to gather themselves before making a lakefront decision.  For those buyers who had lakefront opportunities during 2011-2015 and failed to act, this post should be sung slowly as a dirge.

Today there are 21 lakefront homes available in our MLS. There are an additional four pending sale. At least two others have offers in negotiations.  At first blush, you won’t find this all that rare. In fact, our inventory has actually risen over the past three months, as for one period there were just 16 lakefronts available. There are two primary points of interest that have presented in this new market cycle. Yes, it’s no surprise that buyers still want 100′ of frontage and they want it now. Yes, buyers still love Viking ranges and Sub-Zero refrigerators. Yes, Calcutta marble remains in high demand. The things you know are still correct, but there are two new drivers of interest that have never, ever fared particularly well in the history of our market.

Buyers have shown that they love being near downtown Lake Geneva. They don’t just sort of like it, they love it. I sold 700 S Lakeshore earlier this year in large part because of its estate qualities and its proximity to downtown Lake Geneva. The two lakefront homes on Main Street just West of Library Park are both pending sale as of this week (mid $2s), and that’s significant as both of these homes have endured some lengthy market times over recent years. Buyers found motivation to snap up these two homes, and I’m betting large amounts of your money that the interest was driven primarily by the proximity to downtown. In prior years, such proximity would have often been viewed as a negative feature. The noise and commotion, the tourists, the higher taxes. Yet of late, buyers love downtown and so buyers are buying downtown. It’s super interesting to me.

The other curious aspect of this new market cycle is the liquidity at the top end of our lakefront. Homes over $5MM have never sold with particular ease. During the last bull run here, from 2000-2010, just three lakefront homes sold in our MLS for a price that exceeded five million dollars. Since 2010, eleven lakefront homes (and a vacant lot, making it twelve) have sold over that benchmark. Of those eleven, I’ve sold seven of them, including three of four to close over $7MM, but that’s not the point (actually, it’s always the point). This increased liquidity is being viewed by the owners as some new stable trait of our market. Something that has finally manifest, and should stay in place forever. I’d question that theory, and would encourage any owner in this range who might be considering a sale to hurry up and sell. This liquidity is beautiful, but cycles are cycles.

And that brings us the concept of a lakefront market cycle. How long will this cycle last, and where are we in the cycle? Obviously it’s impossible to know this, but we do have the benefit of history to look at as a guide. The last cycle began in the late 1990s and ran up through 2008. The cycle lasted around 10 years, with gradual price increases occurring each year during that cycle, including in the years immediate following the 2000 dot com bust. If we look at our down cycle as occurring from 2009 through 2012, we’ve been building towards a new bull market since 2012. Yes, extreme value existed up through 2015, but for the most part our market was in full recovery mode (increased liquidity and increasing demand) by mid 2012. With that in mind, it’s easy to say we’re about five years into our current bull run.

How much is left in the tank? Well, judging by the market conditions today, I’d say plenty. Does it last two more years? Does it go five more? That’s impossible to guess. Keep an eye on the stock market and on our inventory if you’d like a clue as to where the market is going. If the indices stay high and our inventory stays low, you have the makings for a continued bull run. If markets melt to any extreme level and our inventory swells, that would likely mark the end of these conditions that favor our sellers. For now, look at the market. Watch it. And don’t do as many buyers are doing right now and make a mistake. Let me be your guide. Not only will we have a lot of fun with your house hunt,  you also won’t end up buying the wrong house in the wrong location.

 

Above, morning at my 412 Harvard listing. 
This American Dream

This American Dream

Dan, a member of the millennial generation, currently lives with his parents but said he plans to be a renter for life and never buy a home. He craves the ability to pack up and go, he said, and doesn’t want to be saddled with a home loan, property taxes or homeowners associations fees.

 

According to an article by Nicholas Padiak in last Sunday’s Chicago Tribune, this young man from Chicago, Dan, isn’t going to be a homeowner. He wants to “pick up and go”, he says. No doubt his nomadic desires are fueled by noble thoughts, but they are the whims of a 24 year old, not the realities of any responsibility ladened adult.  His fellow Millennials found out the hard way that home prices go up and indeed they go down. This left this new generation feeling uncertain as to the implications of home ownership. This is why they want to travel, instead. This is why they want to buy 298 square foot trailers (with a trundle dining table!) This recent housing cycle found many of them new owners in 2008, and many of them recently foreclosed on in 2017.  The Millenials aren’t home buyers, they’re surfers and programmers and stay at home dog-sitters. This is all a huge mistake.

But, but, they’re drowning in student loan debt! Drowning, really? A recent study found that an average college graduate is carrying about $34k in student loan debt. The same study found that an average repayment plan has a monthly payment of somewhere around $350 per month. This is not a small sum of money. A recent Time Magazine article claimed the college class of 2017 average starting salary is just under $50k. More if you’re an engineer or software developer, less if you plan to work at a call center or as a psychic at a not-for-profit veterinarian. So let’s go with the $50k number. Let’s say $10k of that is eaten up by taxes. $40k is left. Age 23, $40k in take home, or $3,333 per month.  That crushing student loan burden will consume around 10% of that.

Remind me how this is somehow unjust? How this debt is so horrific that life must stand still so that signs can be made and protests organized? In Milwaukee, the average rent for a one bedroom apartment is $1089 per month.  That level of monthly commitment would afford a $150k loan with a $3000 annual property tax bill. Yes, a $150k loan won’t allow a newly christened adult the ability to live in Lincoln Park or in the Third Ward, but who says we get to skip all of the steps to building wealth and just arrive where we feel we deserve to reside?  What happened to suffering for a bit, sacrificing for the sake of future gain? I’m not writing this as an old person, I’m writing it barely one generation removed from the current lot.

But it’s not about the money, it’s about the freedom, or so the Millenial would say. What freedom, exactly? The freedom to move across the country with no liability or asset exceeding whatever can be packed in the Vuitton duffel? What sort of freedom is this?  Under this guise, a homeless man is truly the most blessed, for he can wander without complication, wherever he wishes. The trick here is that the homeless man doesn’t have his parents’ basement to live in, with his mother’s turn down service and Tuesday meatloaf.  The freedom to put off adulthood is indeed intoxicating, but at what later expense?

This response to the Tribune article really isn’t just about Millenials. It’s about home ownership in general. It’s about the way a buyer turned owner engages in this ownership. It’s about passive versus active ownership. Passive ownership looks like this: Buy a house in 2006 at an elevated market price of $200k. Sell supremely overheated house, no changes made, deferred maintenance accumulating, for $160k in 2012. This is what passive ownership looks like.  Passive ownership is fine if the owner plans to live forever in the house. My parents’ lakefront home was worth a lot more in 2008 than it was in 2012. Did this bother my parents? Nope, because they weren’t selling in either year. They aren’t selling this year, either. If you’re never a seller, ownership is simply a stabilizer, and there is some bliss in not worrying about the fluctuations in market value.

But this is about Millenials, and their ownership. If passive ownership looks, at least to them, like a formula for devastating loss, then what does active ownership look like? In the active ownership model, the house bought in 2006 would have needed a new kitchen and roof. It would have been neglected. And weekends would have been spend fixing that up that old dump. Active ownership would have recognized a profit in 2008, and captured it. Active ownership would have likely bought again in 2008 or 2009, and yes, paid a premium. But with a large down payment (owing to the gain on the fixer upper), the fluctuations of the crisis wouldn’t have mattered as much.  Illness or job loss certainly would have been an issue, but this isn’t about the devastating outlier, this is about the mean. That same ownership would have led to another round of profit in 2015-2017, and the process can repeat.

Long ago I asked a house-hunting-friend how long it would take him to save $30k. Without answering, he admitted it would take a long time. Like just shy of eternity (based on his then income). So I asked him why he wouldn’t try to make $30k on a house, given that the only thing required would be a significant effort, and effort, more times than not, is free. Today I ask the same of Dan and his Millenial friends. Effort is still free, and living your parents’ basement is still lame.

 

Above, the kitchen in the first house I ever bought. It was even worse in person. 
Jerseyhurst

Jerseyhurst

As an agent, there are certain streets around this lake that I revere. The streets that don’t encourage visitors. The streets that don’t offer up their homes with any version of regularity. The streets that are better than the others. Some of these streets you already know, but others you don’t. You don’t know them because they’re not like Snake or Basswood or one of the streets we know we should respect. These are the other streets, the short ones, the curvy ones, the ones that you don’t even know because why would you?  Welcome to Jerseyhurst Lane. The street so polished that you should always call it a Lane.

When the original caretakers cottage for the Crane Estate was built in 1885, it was long on charm and low on space. It wasn’t meant to be a lake house, a mini-estate, it was just intended to serve as a resting place for the family charged with overseeing the day to day at the large Crane estate. A place to eat dinner and a place to sleep.  Each room with a view of the lake, but, alas, there was no time for contemplation in this cottage. There was work to be done.

This original cottage was restored some in the late 1990s, and then in 1999 it sold to the current owner. This new owner had designs for this special location, and so a meticulous renovation with sizable addition was undertaken. Chris Hummel would be the contractor to oversee this work, and when the last wide-planked oak board was polished, the new owners had found themselves extra bedrooms, a large kitchen and attached garage, a large office,  and an ample great room with lakeside screened porch. The renovation was complete, the home perfect, or so the new owners thought.

More than a decade later, another idea, another plan to fix something that the house lacked: A first floor master bedroom. Sparing no expense, a spacious master suite was added, blending perfectly with the prior addition, which blended seamlessly with the original cottage.  The landscape here is Midwestern perennial perfection, fully irrigated and wonderfully large (nearly one acre). The lakeside porch has those incredible views and a steady breeze, while the brick patio is tucked privately into the lush backyard. A two car attached garage is augmented by a two car detached garage, leaving plenty of room for any car or toy you’d like to store.

The first floor master bedroom is luxurious, with separate tiled shower and soaking tub, double vanities and his & her closets. The are four other bedrooms here, each large and all but one possessing an en suite bath. The first floor den has it’s own bath, too,  and while the current owner uses this as a study, you’d be forgiven if you turned it into a TV room or an extra bedroom.  There are four fireplaces here, those wide planked oak floors, and character that you rarely find in such a unique location.

The house sits up away from the lake a ways, allowing rare privacy and continual quiet. The 50′ of lake frontage and private pier is shared with just one neighbor, though this home has exclusive rights to the canopied slip. There’s a 26′ Chris Craft Continental that calls that slip home, and though you’re allowed to put a new Cobalt into that slip, there’s something about the Chris Craft that perfectly matches the laid back style of this large lake house.

Today, this home has found its way to the open market, with an asking price of $2.895MM. It will be sold quickly, I do believe, so you’d do well to consider a tour of this home if you have any interest at all.  Streets like Jerseyhurst have been lining this lake for over a century, but rarely does a street like this extend to the public an invitation to ownership.

Expectations

Expectations

By now you know I have a problem with cars. I like cars, but I don’t like the process of buying a car. I don’t even like thinking about cars. I’m young enough to see a car I like and think, “I really like that car”. But I’m old enough to not pursue the purchase of such a car.  Men tend to track their lives by the cars they drive. I remember when I met my wife I drove a black Cadillac (don’t ask). Then, later, when my girlfriend became my wife, I drove a black Volvo. It was a nice car. Later, my wife almost decapitated our dog by sideswiping a telephone pole in a red Jeep Grand Cherokee. Life is most easily tracked when the memory places you behind the wheel.

The problem with these nice cars is that they’re expensive. Super expensive. And so earlier this spring I found my way to a car dealership and before my timid financial self could win the internal argument, I agreed to purchase a car. I negotiated for this car as best I could. I feigned the walk away. I stood up and paced. And when all of that was over I had raised my price by dollars and the dealer lowered theirs by pennies. I decided I wanted the car and so I had to pay for it. To walk away meant to repeat the process at a later date, and I was weary from so much anxiety. Later, when I think back about the spring of 2017, I’ll remember driving home in the rain with my wife who pretended not to like the new car until the seats started massaging her back.

This experience relates quite closely to the home buying experience.  The desire. The negotiation. The decision.  The decision, after all is said and done, is what this is really all about. I desired to buy that car of mine for about $1000 less than I paid for it. I could have stood my ground and hoped they called me the next day to accept my price. I could have done that, but I didn’t, because what I wanted to pay and what I had to pay were two different numbers.  This is the situation at Lake Geneva today. If you’re a buyer, there is likely the price you want to pay, which is likely the price I want you to pay, and then there’s the price the seller is going to make you pay. You know which price is more important.

This lake is rife with stories of would-be-home-buyers who stood on principle and stood until they were the only man left standing. The buyer who looked at that lakefront in 1998 and said, no. $575k is just too much for that lakefront. Or the buyers who stood with me on properties in  2011 and 2012 and said, no, the price won’t work. These are the buyers who today look at this market and wish they had the conviction needed at the time they needed it. It’s easy to harness buying conviction when it’s too late. I would have paid X! They say. But it’s too late, because someone already paid it. The practices that helped my buying clients purchase lakefront property at significant discounts to the market five years ago are, for the most part, no longer working.

That’s because we know what we’d like to pay, but the seller knows what they’re going to take. That’s why these last few months I’ve stood on many properties with many buyers and discussed the price I’d like them to pay and the price they’re going to have to pay if they actually want the house. Would I want you to pay $1.9MM for the house? Of course. Are we going to try to pay $1.9MM but realize, after a heated and skillful negotiation that we’re going to have to pay $2.1MM? Again, of course. Because in this low inventory environment sellers have the upper hand, and this is an undebatable fact.  There are some properties that have accumulated enough market time that they will succumb to our negotiating pressure but these sellers are the outliers today, not the standard bearers.

This summer, approach the market with caution. Certain properties are wildly overpriced. Others are not. Know the difference. Don’t approach the market with reckless, fevered abandon.  But when the time comes and you find the house you want, just remember not to get too hung up on a few percentage points.  Those few points will be long forgotten when you’re lounging lakeside, blissfully unconcerned with the slightly larger hole in your bank account.

Let’s Play Ball

Let’s Play Ball

To be the Dodger’s lead-off hitter is to be the invisible man.   That first at-bat is a thankless at bat, no matter the outcome. The vendors are still loading their trays with refreshments, the fans still waiting in the longest of lines at the last highway exit. The television broadcast knows you’re batting, but they don’t care. They pan the crowd, to show the empty seats, to show the mountains in the horizon and the brilliant color the smog turns that early evening air.  If you crack a thrilling solo home-run to lead off the game but no one is there to see it, does it still count as a run?

Likewise, when the team of large men in the NBA finals races off to a large first quarter lead but later melts under the pressure of a steady barrage of 30 foot foists, does that shimmering start mean anything at all? To the fans who saw it, I suppose the answer has to be yes. What a move!– the dad will say to his son. WOW! Some old lady will say to someone next to her. That lady has been to every NBA final since 1919, the announcer with the purple suit will say during half time.  But your team raced out to that lead and you were in line waiting on the nachos, and you only returned to your seat in time to see the other team drop so many threes from such great distances.

Today at the lake, we are in the first inning. It’s perhaps still the top of the first, but there are no runners on and two outs. The pitcher has been flawless, effortless, really. His slider is sliding and his heater is heating. The third base coach looked towards the dugout and said he doesn’t think he’s ever seen better stuff. The NBA game has started, and your team is up big on the visitors.  They’re throwing lobs and dropping threes and the coach crouched down in the huddle and told the players that he’s never seen them play better. And he’s been the coach for along time.

It’s early here, yes, but it’s phenomenal. Summer has started, whether you were ready for it to start or not. Last weekend, a client of mine decided to stay in the city. There were errands to run, things to do, a birthday party that begged attendance. The Lake Geneva forecast called for rain, and so the decision was made. The family would spend the weekend at home, in the city. Except then on Saturday the weather wasn’t foul at all, it was hot and sunny and bright. It was summer.  Weekend plans to sit idle were thrown aside and the family woke up Sunday morning not in their Monday house, but in their Sunday house. Who could push away summery things when summer is already here? This is like saying you’re skier and you’ve made a plan to ski in January.  When it snows 24 inches in two days in December, shouldn’t you go skiing?

Today it’s summer. Yesterday it was summer. Tomorrow? Summer.  Summer does many things to a soul; things delightful and refreshing. But summer can also torment, and summer can be cruel.  Summer isn’t going to wait for you to be ready, because if you’re not ready by now there’s a good chance you never will be. Don’t get caught in traffic when the first pitch has already been thrown.  The grass is green and the sky is bright and the home team is belting homers left and right.

Folly Lane Sells

Folly Lane Sells

If you’re showing a house on Folly Lane, it’s best to show it in late October.  That’s because the skinny road that makes an abrupt turn towards the lake off of Snake Road is lined with Maples. No, not merely lined, it’s choked with Maples.  These aren’t your run of the mill Maples with orange and red and all sorts of silly extra colors, these are the yellow Maples. That’s a man’s Maple, the yellow one.  And Folly Lane has all of the yellow ones, and as such, you’d be best served to show a house on Folly Lane in late October when these green Maples are brilliantly yellow.

But if you can’t show Folly Lane in October, it’s still a good enough drive any other time of year. I drove down that road last Friday with a cherished client in tow, and later that day we closed on the large lakefront at Folly Lane for $7.4MM. This price, by the way, is the same price the property sold for in 2012 (the furnished number was $300k higher than the recorded print).  I didn’t love that sale back then, as the market was in pretty rough shape in the summer of 2012, but today the market is robust and vibrant, especially in our upper reaches. Today, that sale at $7.4MM makes sense to the market, and I was supremely pleased to represent the buyer.

For the market, that’s the sixth sale over $5MM in the last 12 months. Of those six, I’ve closed five of them. That reminds me of something that happened over the weekend. On Saturday morning I was out early delivering magazines with my son. We were walking up to the Lake Geneva Starbucks to peddle our pile of propaganda. A woman was walking out with her husband, a copy of Summer Homes For City People in her hand. She was talking in low, hushed tones to her husband. In a terse whisper she said, “I’m not sure why I’d want to read Dave Curry talking about himself”.  I was disheartened to hear this, but I quickly decided that it would be better for me to write 84 pages about myself than about someone else. The waters could get slightly litigious if I wrote 84 pages about someone else.  And in the same way, I really don’t like having to tell everyone how I’ve sold five of the last six mega-sales on Geneva Lake, but if I don’t tell you, do you think the other 500 some Realtors here will?

As of this morning, there are six homes for sale on Geneva priced in excess of $5MM. Of those, perhaps four of them are actually worth more than $5MM. Be sure to ask me which ones those are. Of the remaining homes, there’s a rumored offer on one of them, and some interest in another. The properties in this strata are generally large, but of the remaining inventory there’s nothing particularly turn key on estate type parcels of land. That’s an issue for the market, especially as there are many upper bracket buyers in the market today.

The story of 2016/2017 is less about the primary market momentum and more about the incredible liquidity in the upper reaches of our lakefront market. Remember, from 2000 through 2009 there were just three MLS sales on Geneva that printed in excess of $5MM. In the past 12 months we’ve closed six. It’s all really quite remarkable until you remember that Geneva Lake is the best lake in the Midwest. Then it all makes a whole lot of sense.

A big thank you and congratulations to the newest lakefront owners. Here’s to generational happiness at Folly Lane.

Weekend Caller

Weekend Caller

We need to have an honest discussion. It’s rare, in any business involving sales, to have such a conversation, but converse we must.  This is about me, sure, but it’s about you. It’s about people you don’t know and people I don’t know. It’s about regular, good people. People we’d go to church with or go to fish fry with. People we’d do both with. It’s about the sorts of people we all are at points in our life. It’s about the weekend real estate caller.

In real estate, it’s a generally understood concept that Realtors work on weekends. We do. We all do.  There are some Realtors who take days off for religious reasons, and I applaud them for their conviction. There are other Realtors who take certain hours off- no calls after 6 pm- that sort of thing. But the vast majority of Realtors will show you a house Sunday morning at 8 am and they’ll show you one Friday night at 9 pm. There are no bounds for most agents, no time when they aren’t hungry to sell you something. Would it surprise you now that I tell you this is a bad thing?

Last weekend I had several real estate calls at my office line (262-245-9000). That’s not abnormal. But this was a Holiday weekend and you’ll be somewhat shocked to find out that Realtors also like Holidays.  These days were not created purely for bankers and school teachers and financial analysts. These are the holidays for the people, and while there is some testing that has not been entirely vetted, Realtors are also people. The business expects Realtors to be available at all times, at the drop of a hat, because shouldn’t these blood-sucking sales people be available whenever the job calls. Can I say no?

Of course I can, but it’s taboo to admit it. Could you imagine that on Memorial Day weekend I, too, like the idea of a cookout? I was momentarily undertaking the world’s greatest physical transformation earlier this year, but it didn’t stick so I’m back to preferring my protein to be wrapped in carbs. Soft, pillowy, deliciously doughy carbs. And so I like the cook brats and burgers and steaks, just like every other red blooded American.   I was in my office Saturday morning for a couple of hours, which felt like a nice effort on a Holiday, and that was that.

I stopped back on Sunday evening, after having spent the day Sunday out tiling at the never-ending cabin project I’m embroiled in.  Last weekend,  calls came for me to my office number. Voicemails were left. The weekend calls had left a couple of messages, and I was too late in my reply. Both buyers had moved on without me, which is both slightly understandable and also disappointing. And that comes back to the concept of this business and what it is different agents can offer.

Let’s say you’re looking to have some estate work done and you were told by a friend that their attorney is the absolute best. He does estate work all of the time, and he’s without rival. So you call the attorney, let’s just say on a Sunday morning of Memorial Day Weekend. If the attorney didn’t call you back within a few hours would you have called another attorney? Or similarly, if you call this attorney on a Monday but he hasn’t called you back by Monday evening, would you waltz into the closest lawyer’s office, the one in the strip mall next to the Cinnabon, and have the junior attorney from Middle Appalachia Technical College draft your docs? Of course you wouldn’t. Why then is real estate so different?

I love phone calls from clients and would-be clients. I crave them.  So please, if you’re calling me on a weekend, call my cell phone (262-245-1993). Text me. Email me (dave@genevalakefrontrealty.com). Do all of these things, but I’m begging you not to leave a voicemail at my office for me if you’re expecting a Sunday morning return call. While real estate is a game built around endless availability, I’d prefer it be built around the concept that some agents are more valuable than others, and if you’d like a Sunday morning agent with an hour notice I’m pretty sure I know you’re not going to get the agent who can guide you towards the right property at the right price.

Here’s to the weekend, and to cell phone calls. Above, a pier shot from Thursday. It’s summer. Be here.

 

Housing Markets

Housing Markets

I’ve been working with a friend who is in search of his first home. This is not typically my aim, but I decided it would be good to help him out. I figured it would be easy.  A $300k budget, the ability to handle a remodel, and plenty of enthusiasm for the process. This was what I thought. Six or more months into the home search I feel as though I may have made a big mistake. This market is tough. Like, super tough. You like that boring ranch on a half acre lot? You know, the one with the water in the basement and the rotting roof? The one that isn’t even cheap? Yeah, so does everyone else.  Take a home buyer and let him find interest in one or two homes that each sell before he can buy them and then stand back and look at the impatient mess that the market has created. Hot markets breed hot markets. Confidence, it seems, has never been higher, and with that confidence comes a tidal wave of buyer mistakes.

Because the papers are telling people to buy houses. Economists say buy. Lenders, buy. Realtors, BUY. Everyone wants you to buy a house. If you don’t own one, buy. If you own one, buy another. If you own seven, buy the eighth. After all, Lawrence Yun says you should buy. In case you don’t know Lawrence, he’s the chief economist for the National Association of Realtors.  In spite of his research, he’s never found a time that wasn’t right to buy a house. Buy in 2008, because buy! Buy in 2009 because the market has pulled back. Rinse and repeat for the following four years. Then buy in 2013 because the market in rebounding. Then rinse and repeat that mantra from then until now. Buy, buy, buy.

And this is the attitude that has fueled a most remarkable level of growth in our primary housing market. Oh, I should add, this is not a post that’s very inclusive of the Lake Geneva vacation home market. This is about the primary market, where you live and where I live, not where you vacation and I vacation. This is the market for the people, and it’s absolutely on fire. McHenry County is on fire. Lake County, too. Kenosha County is booming because people from Illinois who don’t like high taxes are moving to Wisconsin to pay higher taxes.  Interest rates have risen, but they’ll be rising some more, so buy!  The narrative is the chorus, the refrain, buy, buy, buy. All of this is fueling a most incredible, dynamic market.

The Chicago Tribune chimed in on Sunday with an article that says- you won’t believe this- that it’s time to buy. Experts say you should buy a home this year. Buy one now, don’t be left behind. And this is the sort of thing that my young friend, Mr. Primary Home Buyer, is reading.  Everyone is buying, so why not me, why not now? Well, just maybe, because you can’t quite find the right house. When we started our search my buyer wanted to find lots of land. Ten acres would do, but twenty would be better. Thirty, ideal. The search went on that way for some time. Where has the search led us today? To $319k vinyl ranch homes on half acre lots. These are sent to me with the link to the property and a note “Not bad, right”.

No. Bad. Terrible, awful, bad. Because everyone is buying the feeling is that buying is a must. Buying is a requirement. Buying is all there is and without it there is nothing. Inventory is low, this we know. And this creates a bit of a difficult situation for would-be-buyers. If you’re buying a lakefront on Geneva, you know that not only is inventory limited today, inventory is limited at almost all times. It’s a low inventory market, in times good and bad. If you want something perfect, you’re going to have to compromise and buy something less than, because you can fix the things you wish were different.  The market on the lakefront is rare and valuable and it’s not at all like a primary home market. But that beat up ranch on 7 acres for $299k that you’re looking for? Well there might not be one for sale today, but I’ll bet you all of your money and a little of mine that there will be one coming to market in the next several months.

So my advice for the primary home buyer in this market? Be patient. Yes, interest rates are slowly rising. Yes, that’s too bad. But why buy a house you hate to save a quarter point on a mortgage rate? Find something you love, because if it isn’t for sale in May then there’s a good chance it’ll be for sale in June.

Lake Geneva Memorial Day Weekend

Lake Geneva Memorial Day Weekend

And away. We. Go.  That’s best if read in the Joker’s voice, right before he ignites a bomb that has the power to destroy one thousand Gothams. But alas, we are not igniting a bomb, though we are ready for this slow burning fuse to hurry up and give us a show. It’s Memorial Day Weekend, and with this weekend we commence the first summer of the rest of our lives. What a summer it might be. It could be. It should be, probably. The issue today is that last summer was just so nice. Last Memorial Day weekend was delightful, full summer, instantly. This summer looks to be off to a rockier start, or at least a wetter one. Still, after some driving, it’s time to live it up like it’s the weekend.

I’ve written it before, but it should be mentioned again. This weekend is not a summer weekend. No matter how badly we wish it were, it isn’t. It’s a spring weekend. It’s May, for crying out loud.  If the weather waxes summer, terrific. But if it doesn’t, let’s not get all bent out of shape. I can envision the text messages now… “What a crappy weekend”.   “Are you building your ark?” Etc and etc. Yes, the weather might let us down this weekend, but that’s okay. This is just a dress rehearsal for summer. It’s the last full pads practice before we take the field. This isn’t the big show, it’s just the dry run. Or wet run, depending.

What does matter this weekend is the intent of the weekend. Yes, we’ll light our grills. Yes, some will go swimming. Yes, I’ll have my Superjet in the water. But this is about remembering those who died in awful places so that we can live here, in this place, where our biggest concern is whether or not it’ll rain on our cookout. What an embarrassing bunch of people we are.  My kids can’t swim in the pool this weekend, so everything is ruined! No it isn’t. We’re alive. We’re free. We’re living in this place. We aren’t just existing. We’re living.

And so this weekend here’s what you should do. Pick up my 2017 Summer Homes For City People magazine. It’s out on newsstands now, and it’s not the worst thing I’ve ever done. I don’t think it’s the best, either, but that’s just between us. At least I didn’t put the wrong date on the spine like I did last year.  Please grab the magazine and bring it home with you and leave it on the doorstep of your wealthy neighbor who doesn’t understand that weekends are not for the 6000 zip codes. Please do that, I’ll be thankful and my kids will, too.  Now that we’ve discussed the things you can do for me, here’s what we can do to show our respects to those who made all of this possible.

There are parades everywhere this weekend, but since you’re reading this on this site we’re going to skip all of the things happening in towns that don’t matter. There are parades on Monday in Lake Geneva, Williams Bay, and Fontana. Men will march. Women, too. Kids, sure.  The Lake Geneva parade is downtown at 10 am, the Williams Bay and Fontana parades are in their respective downtowns at 10:30 am. I recognize you cannot attend each parade, but try to attend the one closest to your lake house. If you try, I’ll try. It’s so easy to get caught up in the superficial worries of this weekend. Is the lawn fertilized? Are the annuals planted? Is the mulch done? Why isn’t the irrigation watering in the far west bed?!  Who cares. Some famous philosopher once said, “It’s the superfluous things for which men sweat”.   Let’s stop sweating and give a salute, and then we can go back to sweating.

Here’s to a most enjoyable Lake Geneva Memorial Day Weekend. And remember, if it rains don’t be sad. It’s not really summer, anyway.

Mayfly

Mayfly

It’s that season again, and with that season, we’ll require a reminder that Mayflies cannot kill you. They can’t give you Zika. They can’t do anything but annoy, and that’s okay. A post from the past…

 

I do not know what a June bug is. I don’t know what sort of bug it is, but I think it’s a beetle. I also don’t know if it’s a June bug, as the month would suggest, or if it’s a Joon bug, which is how I think the spelling is of that movie alongside Benny, which also might be Bennie, but who knows. I know certain things about June bugs. I know that they are bugs, and I know that while they likely arrive sometime in June they most certainly do not only exist during the month that I assume to be their namesake. My daughter’s name is May, but she exists the same in May as she does in June, which is to say that she exists solely for the purpose of torturing her brother and making him feel as though she gets special treatment. She does, but not just in May because her name is May.

Mayflies–I know more about these than I do the bugs that may or may not be beetles that come after the flies. Mayflies aren’t really flies at all. They do fly, but they do not buzz against windows and spoil picnics and touch everything in the way that garbage flies do. Perhaps calling them garbage flies is inappropriate, like calling field corn horse corn, but as I recall fruit flies are more like small bugs, or gnats, than they are like flies, so I’ll assume that fruit flies are like gnats and garbage flies are the flies that we think of when we think of flies. Which is often, in summer. Mayflies, they’re a summer bug too, which is back to our point about those flies existing, at least sometimes, outside of May.

This is the time for these bugs. In fact, it might be past the time for these bugs. They were buzzing while I was working, buzzing in great dark clouds over piers and in front lawns and buzzing next to lilacs as they bloomed and made all the world smell like the pages of Glamour magazine. They were in these large schools, roaming about without moving much at all, hovering, really, hanging out in front lawns and near bushes and over piers and over expanses of calm spring waters. These bugs can, at first, seem daunting. There are many of them, but the swarm doesn’t instill fear like a swarm of bees would. And they don’t instill disgust in the way that a mass swarm of flies would, be those flies garbage flies or fruit flies, it doesn’t matter much. They’re still flies, and a whole mess of them would be just miserable.

I’m sure I saw some of these dark schools of Mayflies during their namesake month, but I can’t remember them this year because I didn’t take any time to smell any roses, or to pick any dandelions, or to walk along the shore path near the water where these bugs like to hang out. I haven’t done these things because I haven’t had the time, but that doesn’t mean that I didn’t see some Mayflies this year. I did. I saw plenty of them, just not the huge swarms of them that I remember seeing during other Mays from other years. I remember one year when they were particularly impressive. I fished off the Loch Vista pier, casting thin line with small hooks looped through the faces of small minnows. I don’t feel good about doing that to those minnows, but I do feel good about watching a small red and white bobber slip under the still surface, and I feel equally as good about reeling in a smallmouth bass before gently unhooking it and releasing it back to its watery home, so the minnow part is unfortunate but I find that its end justifies its means.

I remember one late afternoon, late enough where the sky was dark but the light hadn’t yet faded enough to be considered night, and I was doing that casting and standing and reeling. The buzz from the Mayflies was pronounced–loud even–and I felt great privilege being on that pier in that scene, watching my bobbers. I’d look away at times, just for long enough to see the cloud of Mayflies dip too close to the water so that the wings of the lowest members would dimple the surface and stick together. The bugs that met the water in this way would stay there, glued to the surface of the calm lake, where they’d lay without hope until a small bluegill would ascend from the depths and sip them, implying politeness while still being ruthless. I watched the scene play out, the falling to the water to become a meal, the bobbers dipping under the surface, the smallmouth pulling away as best they could, the night sky growing dim, the Mayflies abuzz.

This is May, and we’re at the lake. The flies are not flies at all, just Mayflies in some quantity. They won’t bite, they won’t bother, and soon enough they’ll be dead and stuck to spiderwebs under the eaves of our homes and the canopies of our piers. They aren’t anything to fear, no more than we’d fear a Joon bug, or a June bug, or the dreaded Juhn bug.

 

Above, my Lake Geneva Club listing, freshly under contract.
Vernacular

Vernacular

If we were in the deep south, it would be understood that there would be certain words we’d use at certain times. We’d drop the G on many words, like he’d be “fixin” to catch a “beatin”. This is hard for us yankees to understand, but this is the way it is. Why then, should it be any different for us? Why shouldn’t we have our own set of words, meant to describe our own set of things? We aren’t in the northeast where things are strange and er is pronounced uh, but we are unique. At Lake Geneva it’s less about the pronunciation and more about the chosen word.

With Memorial Day on the very near horizon, it’s a good time to take a refresher course in our preferred words. Perhaps you’re new to the lake scene altogether, which means you haven’t yet had a chance to learn these linguistic lessons the hard way, through the embarrassment of the utterance. Or maybe you’ve been here so long you’ve decided that it doesn’t really matter anymore. What matters, you say, is world peace and kindness. You’re being silly, because the words matter far more. Without further ado, the list:

There is a company here called Pier Docktors. This is a company that makes, installs, and removes piers. The name is a pun, a play on the words, which is the only reason we’ll give them a pass for using the root word “dock”. The white thing that juts out from shore in front of your house is called a pier. It’s not called a dock. There is no acceptable substitution for this. A pier is a pier and a dock is a dock, and what we have here are piers. Don’t call them docks. It’s embarrassing to the pier, and to you.  There are a couple of piers on the lake that aren’t white. Those piers are not the piers you should emulate if you own your own. Piers are to be white, end of story. Docks can be brown, but we don’t even have those here.

If you’ve worked hard and sacrificed and you’ve made your way to the lakefront, your front lawn is the lakeside lawn.  When your friends are coming over to hang out, you tell them you’ll be in the front yard, or front lawn. This is the lake lawn, not the street side lawn. I’m amazed at how many people- seemingly intelligent, good natured, people- get his wrong. Your backyard is the street yard. Your front yard is the lakeside yard. Please don’t confuse the two.

Did you catch a bass off your pier? Really? Was it a largemouth or a smallmouth? If you say, neither, then you didn’t catch a bass. There are only two types of acceptable bass in Geneva Lake. The largemouth and the smallmouth. If you caught a rock bass, then you caught a rock bass. Don’t call it a bass. It’s only a bass of sorts, in the way that a Redfish is really just a freshwater drum which is really just a carp. Don’t church up a rock bass by calling it a bass. It’s a rock bass, nothing more, nothing less.

The little white plastic or wood or foam thing that floats out in front of your house beyond your pier isn’t called a can. It isn’t called a mooring ball. It isn’t called anything except what it is: A buoy.  I’ve heard all sorts of other abuses, but this white bobber that you tether a boat to is called buoy. It’s a buoy now and it’s a buoy later. It’ll always be a buoy. Please don’t call it by any other name, and if you have one, don’t you dare tie a pontoon boat to it.

The Shore Path has received much attention this spring, mostly due to the absurd Muck Suck race that was supposed to be held this coming weekend. In the end, cooler heads prevailed and the race was canceled as a result of a significant push back from the lakefront owners. The shore path, as it is, is a lake path, but it should never be called that. Your great Aunt’s name is Edna, but you don’t call her Edna, you call her Auntie Edna. Show a little respect and call the lake path what it is: The Shore Path.

If you invite me over to your house this summer and you send me a text like this, “David, stop on over. I’ll be in the backyard on the lake path trimming some weeds that have grown too close to the dock”, just know that I won’t be coming over.

Lake Geneva Market Update

Lake Geneva Market Update

Next week I’m going to do an in depth review of Abbey Springs, Geneva National, the lakefront condo market, and the secondary condo markets (Abbey Villas, Abbey Hill, Willabay, Bayside Point, etc). But today we’re going to look at the lake access and lakefront markets, because there are some interesting things occurring within these segments. I wrote earlier this week that each segment is active, which sounds like something easy to do and easier to write, but it’s not easy to do. Rarely do all pricing segments of one major market feature the same general mood. Rarely does a $200k cottage sell with the same frequency as a $4.5MM lakefront. But that’s what we have today, and it’s really quite amazing.

We know the entry level vacation home segment is super active with 10 out of the 28 homes priced under $500k currently showing as active with offer. What’s more interesting to me is that we have 22 homes available priced between $500k and $1MM and just three of those are pending sale. That’s not a terrible number, and that’s actually not what’s particularly unique. In this price range buyers will generally be able to find a transferable boatslip. Not always, but often. They’ll also typically be looking for a lake view, or proximity to the lake, or something unique about the house.  What’s curious today is that of the three homes pending sale in this segment, just one of those homes has a slip. The other two do not, and both are priced in the $600s.  Buyers buy for all sorts of reasons, so I would never seek to explain all purchase behavior, but if I’m a buyer in this segment I’m likely looking for a slip first, and every single other thing second. Buyers often think they won’t need a slip. Then, after the first weekend at the new lake house, they’re wondering where they’re going to moor the boat they’d like to buy.

The other range that continues to impress is the off-water lake access market over $1MM. This range was slow last year at this time, with ample inventory and few buyers.  The market has absorbed much of that aged 2016 product. Today there are 10 off water homes priced between $1MM and $1.7MM. Of those, two are under contract. That might not seem like a lot, but it is. As the entry level lakefront inventory shrinks (just two lakefront homes priced under $1.5MM today), expect to see this market garner more and more attention. The idea here is simple. If a buyer can’t buy lakefront, they’ll look for the next best thing. And if lakefront is rare and pricy, often buyers will seek some sort of off-water property with a slip or a view or maybe both. These are not market mistakes, generally anyway, but they are market moves born not out of pure desire, but simply out of limited options. I’d like to take the pretty girl to the prom, but she’s already going with the quarterback, so I’ll take this other girl, who likes fidget spinners and eats erasers, but her hair is okay.

Lastly, the lakefront market itself.  There are offers being flung around like so many pancakes at the fly-in-breakfast. The one out West of Walworth. These offers are generally coming together, but increasingly sellers are holding out for more money. Better terms. This might be a good idea or it might be a mistake, and I’m going to go with mistake. Some of the properties with offers are flawed- and the sellers used to understand those flaws. Now the sellers figure the market is in their favor, and their flaws are hidden by the hysteria of it all.   They shouldn’t be this way. The market can turn as quickly as a 10 percent correction in the S&P, so sellers should remain confident but cautious. New pending sale mentions this week include the Congress Club listing in the $1.6s, the north shore Fontana lakefront in the low $2s, and the lakefront on South Lakeshore in Fontana in the mid $4s. These sales will all make sense once they close, so I see nothing particularly unique or exciting here. Rounding out the lakefront activity, my pending contract on the Folly Lane property listed in the high $7s.

Inventory remains the question for each segment. The MLS only shows 17 true lakefront homes available this morning. Of those, there are some nice properties, some rare properties, and some that represent solid value. The low inventory situation will likely persist this year, though I’d expect several new offerings to come to market over the next 30-45 days. As always, if you’d like to know about these new offerings before the rest of the market, just let me know.   The lake today is buzzing with activity, and not just of the housing variety. Landscape crews are hustling to mulch beds and plant annuals. Pier guys are racing to install the last of the piers. Irrigation systems are being activated. It’s a frenzy, to be sure. But it’s our frenzy and I wouldn’t have it any other way.

Above, a new lakefront I’m bringing to market next week.
Inventory Problems

Inventory Problems

What is a healthy real estate market? Is it a market with plenty of inventory so that every buyer has an opportunity to buy whatever it is that they want?  This would be the generally accepted position of most. Yes, we should have inventory for all, available at all times, with low interest rates and sunny skies. Also, hopping, happy white bunnies.

The problem is that it is impossible for a market to exist that pleases buyers and sellers equally.  Even if you’re a seller and then an immediate buyer, you don’t have things exactly the way you’d like them. Unless you’re selling something into a hot segment and buying something in a slow segment, you’re likely selling high and buying high. When the markets were bad, sellers were selling low and then buying low. As I was advising then, this felt terrible but was, in fact, really quite smart. The trick then was simply to sell low and buy lower, just as the trick today is to sell high and buy less high. I admit the clunky phrasing will never catch on.

Today the market is active in all segments. Unlike the initial improvement we saw from 2012 through 2015, where certain segments were left out in the cold even as others advanced, today the entire market is humming.  There are 19 lake access homes priced under $400k at the moment. Of those, 8 are under contract. There are homes with slips priced between $400k and $900k pending sale,  and even our off-lake $1MM-$1.5MM range is churning out volume. There are two pending sales in that category, one in Lake Geneva priced in the $1.3MM range and one in Fontana priced near $1.5MM.  This is the range, in case you forgot, that has been struggling over the past 18 months.  Today it is fluid and potentially as liquid as any other individual market surrounding the lake.

The entry level market on Geneva is still giving up some inventory, with two lakefronts priced under $1.5MM.  Beyond that there is a pending lakefront in Lake Geneva priced at $2.195MM (my listing), and a recent sale in that same category of a house in Williams Bay on the north shore of Fontana Bay. That property closed for $2.125MM. I had that home for sale a couple of years ago and failed to sell it.  The house didn’t bow to the market, the market came up to that house.  Around the other side of Fontana, a house that had been for sale off and on for years has gone under contract with an asking price of $4.65MM.  That’s a nice property in a nice location. It makes sense that it sold quickly this time around.

In our upper bracket ranges, I have a new deal on a lakefront priced at $7.95MM.  That’s the biggest story of the last 24 months- the improved liquidity at our market’s very top end.  We used to sell a lakefront over $5MM every other year. Now we can sell five or more per year. When this sale closes that will make six sales over $5MM between June 2016 and June 2017. Of those six, I’ll have closed five of them, leaving little doubt as to which agent best understands the highly nuanced upper bracket here.  This increased liquidity is good for the lake, but it will have a cap.  Over $8MM the numbers get a bit more sticky, and we still haven’t ever printed a transfer at $10MM or over. Expect this to be tested this year, both with some of the current inventory and with new inventory that’ll likely leak to market over the coming months.

So is this a buyer’s market or a seller’s market? Is the market healthy? Well yes, it’s healthy. It’s active and it’s dynamic.  But as for who’s in control of this whole thing, that depends on specific properties. You can sell into a hot segment right now and buy into a cooler segment. That is still possible, and that’s the best possible outcome for those seeking to upgrade or downgrade without leaving these shores.  The trick now is for buyers to remain patient (and seek out the proper guidance, from me), and for sellers to resist the urge to indulge in overconfidence.  Either way, if inventory remains low we might have a slower summer than any of us want.

Weekend Update

Weekend Update

Sadly, the big story this morning is that of a kayaker who died in Geneva Lake yesterday. This sort of story isn’t nice to write about, but every unfortunate occurrence is an  admonition for the rest of us. Lakes in the spring are cold. The sun may be warm, the wind still. But the lake is still icy cold. I’d guess the water temp in Geneva today is around 52 degrees. Maybe 55. That’s cold enough to take your breath away, and if you lose your breath when you’re in the middle of the lake, your life cannot be far behind. I don’t know if this poor man had a life vest on, but remember to always use a life vest if you’re out on this lake in a vessel as unstable as a kayak.   It’s a sad story today, for sure.

The shore-path-race seems to be as unpopular as anything has ever been. It’s as unpopular as suburban style housing developments proposed for our cornfields. It’s unpopular. The city alderman who approved this race should remain ashamed, and hopefully they’re being bombarded by angry letters and calls from lake residents who wish to see their path left for the dreams and the wanderers. Several local groups have taken action against this stupid race, and with any luck it’ll be called off before the first ankle is sprained.

It’s my birthday this weekend, which is nice for me. But it’s also terrible because I’m getting old and my beard is graying and my temples have completed the process. I sat through my son’s spring music concert the other night.  As a proud parent and school alum, I had every reason to sit still and marvel at each squeak from the flute and eat off-key solo. But I have found, that even at my advancing age, I still lack the maturity to sit still for 90 minutes while high schoolers sing Disney songs. Perhaps this means I’ll never grow up. Perhaps it means I’ve failed at this game. But as Mark Hoppus once said, No one should take themselves so seriously. With many years ahead to fall in line, why would you wish that on me?

My Morel season was another bust this year. I didn’t have time to look as much as I should have, and when I did I didn’t really find many. A few dozen, perhaps. I know morel season waits on no man and yet I expected it to wait on me. It didn’t. And now I’m another year older and have scant few morels to show for it. This is something I’ll have to live with until next May, when I’ll try to right the wrongs of 2017.

Lastly, if you were in the Lake Geneva Starbucks this morning at 7 am I did spill that entire cup of coffee at the cream station. Everything was going fine until I looked up while putting on the lid. The entire cup poured onto the counter, the floor, even into the little container where the Splenda reside. I felt sort of bad about this, but quickly used one hundred or more napkins to tidy up my mess. I apologized profusely to those around me. But if you were me, and it was your birthday this weekend and you hadn’t really found any morels,  are you trying to tell me you wouldn’t have also spilled your coffee?

Happy Mother’s Day to my mother and my wife and all of the other mothers.
Lakeview Lakefront Sells

Lakeview Lakefront Sells

Buyers are not generally pleased with the way this market is performing. Buyers want to know when the market will shift in their favor. When the inventory will increase. When the skies will clear and the sun will shine on them, not on the seller. To be a buyer today is to assume the seller has the upper hand.

Last November a small house in the Highlands came to market for $1.2MM. The house was about what the market expected for this price. 45 feet of frontage, some basic things like a sort-of kitchen and some bedroom-ish spaces. It was fine, this house. And the market was hot, especially on the heels of my closing of the lakefront down the road on Lakeview right around that same time.

But the house didn’t sell, because it didn’t have any sort of sizzle. Buyers looked at it, often, because it was, at the end of every day from then until now, cheap. But was it cheap enough? After all, the house down the road closed at $1.26MM and had a bit more frontage, a boathouse, better finishes and it was clean and easy. This house wasn’t clean nor was it easy, and so, in spite of this dynamic seller’s market, the house sat.

I was working with a young couple last summer and fall, a couple who, in spite of their newness to our market, felt compelled to pull something off. They didn’t want to spend a lot, though in Lake Geneva even our little is a lot, so we targeted the entry level lakefront market, looking for value even as sales printed all around us. Patience, even in an escalating market, would prove to be the right practice.

We bid low in March, or maybe it was April. Pretty low. Quite low. The seller responded. We negotiated some more. A bit more. Just a tiny bit more. We closed that purchase on Monday for $925k. The new buyers are into a lakefront home for the lowest amount that anyone has paid for 45 or more front feet on Geneva since January of 2013, and that, no matter how terrible the kitchen, is a value.

There’s something especially rewarding about placing a new Lake Geneva owner into a lake house. This sale was not the largest, nor was the house the fanciest. But the house allows a young couple an opportunity to experience the lake for the first time, in a way that will be completely and utterly new to them. To this new buyer, a big congratulations and many thanks for letting me help with this lakefront purchase.
To the buyers who claim this is a seller’s market, what of the sale here on Lakeview? If you liked your down market in 2010-2013, that’s fine. I liked it quite a bit, too. But the market today is robust and healthy and yet still discerning buyers with enough vision can still secure lasting and permanent value. Don’t let the headlines get you down. Every seller has their own circumstance, and every home its own unique set of challenges. Our job is to discover those homes and those sellers and do our best to print value.

700 South Lakeshore Sells

700 South Lakeshore Sells

When I listed this property last August, I knew exactly what it was. It wasn’t the most perfect house on the lake. The kitchen wasn’t exactly the current style. But it was 4 acres and 162 of frontage with so much square footage and so many resort-style amenities. The house had been listed off and on for what felt like ages, as if anyone really knows exactly what an “age” feels like. Still, the property was repositioned with the help of a fresh perspective and some fresh marketing efforts and I was pleased to work for that seller to get that property sold.

Last Friday, I sold 700 South Lakeshore in the city of Lake Geneva for $5,900,000. The sale is the fifth over $5,000,000 since the start of last year. Of those five sales, I’ve represented the seller in four of them. I’m not really sure now what else I can do to help convince the upper bracket market that I’m the man to handle these luxury listings. Perhaps the secret will be unlocked after I sell five out of the last six…

While I’m happy for the seller who now gets to move on to the next chapter of her life, I’m exceptionally pleased for the buyer. This is a new lake owner, with a new reason to look forward to the weekend. There’s something extra rewarding about selling a lake house to a first time Lake Geneva owner.  They don’t yet know what they’re in for, but I do. We do.  A very special thank you to this seller and buyer who allowed me to help bring this sale together.

Lake Geneva Shore Path Race

Lake Geneva Shore Path Race

The Shore Path. It is perhaps the most unique aspect of this Lake Geneva scene. While water flows from one end to the other, from a shore over here to a shore over there, the thing that truly connects this lake is this path. The original iteration of this path is easy to imagine. It was a foot path for the indians who inhabited this land, a worn single track used by these residents and the deer to get from one location to another. Later the path became a means for estate staff and grounds workers to move from one estate to another. The path endured and was protected via a deed restriction that still today runs through every lakefront property on Geneva Lake. The shore path is immensely valuable to this lake, to these owners, to this thing we call Lake Geneva.

The shore path, no matter if it is a recored as a public right, is best viewed as a privilege.  The constitution does not protect the shore path. It is simply a privilege, bestowed onto the public by a benevolent group of owners who, 130 years ago, could not have foreseen the path becoming the tourist attraction that it is today. Take away the boats, the fancy piers, the ornate lawns and strip this lake down to its very natural, undisturbed state and the only thing that would remain is that single path.  Though there are signs occasionally to remind the path strollers that this path is on private property and should be treated with respect, the path is often the subject of much abuse.

Path walkers are to do one simple thing when they walk the path around Geneva Lake: Stay on the path. This concept is not difficult to understand. The path does not give a walker the right to comb the private beach in front of the path for sea glass or shells. The path does not give the walker the right to snip a flower or two along the way. The path is not intended to encourage loitering. There should be no resting, no matter how weary the walker, on the lawns of those great lakefront properties. The path is for walking and walking only. Leash your dogs or leave them at home.

With that understood, imagine my surprise to hear that the City of Lake Geneva has voted to allow a running race to take place along this venerable path.  I have significant issues with the city itself, with the government run by those that seemingly fail to understand why the city is popular. The city exists solely because of the lakefront home owner, as without that high tax paying vacation home owner, there would be no means to carry out whatever it is the city is intent on carrying out. I was in the room yesterday while a local resident argued with a city employee over a parking ticket. The city employee was refuting every argument this resident made as to why he shouldn’t have been given a $20 parking ticket. The city worker staunchly rebuffed the residents claims as though her very life depended on it. This is the city that has forgotten what made it popular in the first place.

The city voted to allow this race, to be run by as many as 150 racers, to occur over Memorial Day Weekend. This old single track around Geneva Lake is ill-suited to host a race of any variety, and the group who should have been defending this historical footpath instead voted to exploit it.  For shame, city aldermen, for shame. And shame on Clearwater Outdoor for having any part in this race (according to the Muck-Suck website).  As an owner here or an interested party in this lake, you should be motivated to keep the serenity of it all intact. There are few vestiges of history here that can rival that path, and the path should be protected at any cost. The city has approved the race for this year, likely out of the primary governmental motivator greed, but there is time to stop this race from ever occurring again.

Reach out to the City of Lake Geneva and tell them to knock it off. The footpath is meant for leisurely strolls, not organized races. Keep the races to the streets and protect the path.  The mayor and city aldermen are listed below. According to what I’ve read, the only alderman who voted against this exploitation was John Halverson. Well done, John.

akupsik@cityoflakegeneva.com

sstraube@cityoflakegeneva.com

echappell@cityoflakegeneva.com

dskates@cityoflakegeneva.com

rhedlund@cityoflakegeneva.com

bkordus@cityoflakegeneva.com

khowell@cityoflakegeneva.com

cflower@cityoflakegeneva.com

jhalverson@cityoflakegeneva.com

 

Shore Path Photo Courtesy Jeff Robichaud
Equestrian Estate

Equestrian Estate

I rode a horse once. It was an unruly horse, wild maybe. I was all of 12 years old and I was riding on the back of this wild beast; a girl who I fancied held the reins. The horse ride was uneventful for a few moments, until a sheet of construction debris blew up in the wind causing the horse to jump and jolt. I fell to the ground, awash in shame and roadside dust. I have never ridden a horse since. But this isn’t about me and my horse situation, this is about a new listing of mine, a listing that represents a bit of a departure from my norm. This horse property isn’t on the lake, obviously. It isn’t right next to the lake, either. It’s about 15 minutes from Fontana and once you arrive you’d be forgiven if you thought I transported you to Lexington. This is one heck of an estate.

If you’ve never looked for a large swath of available land in Southern Wisconsin, then it would be impossible for you to understand just how rare this offering truly is. Several decades ago, a world renowned physician spent untold hours and uncountable dollars assembling this sportsman’s paradise. A passion for Peruvian horses and a desire to create a first class equestrian facility fueled this remarkable effort, and today this amazing estate is for sale. While the property must be toured to be fully understood (watch the video), you can see from these photographs that this is not your normal Wisconsin equestrian property. This is a significant retreat for any outdoor enthusiast.

Here we have more than 278 acres of contiguous farmland, woodlands, and pasture; with a flowing stream winding through it all. The house is large and upgraded, the grounds immaculate. There’s a pool and tennis court, a guest cabin and more. The horse facilities themselves are among the finest you’ve ever seen, complete with indoor riding area, conditioned stables, office space for facility managers, and a pastures galore.

Dry Creek flows through this property and divides the woodlands from the pasture, creating wildlife habitat that has been undisturbed for decades. Hunters will enjoy the upland fields and heavily wooded hillsides. Trails are cut through much of this property for horse riding or perhaps just UTV riding. If you’ve been looking for the ultimate Wisconsin retreat that can offer you a little of everything, this is it. If you’ve been looking for a first class equestrian property less than 90 minutes from Chicago, well you’ve found that, too.  Offered today in the high $2MMs.

Shore Haven Sells

Shore Haven Sells

The single lane associations on the south shore of Geneva are some of my favorite lake access associations. These are not large associations like Cedar Point Park or Country Club Estates, rather they’re intimate skinny lanes with a handful of homes, perhaps 30, perhaps 50, rarely more and rarely less. These associations generally offer one thing that the larger associations cannot- transferable boat slips. Excepting Sybil Lane, the other three in this stretch- Shore Haven, The Lake Geneva Club, and Oak Shores, all offer each home a fully transferable slip. Some slips are larger and others small, some shallow and others deep, but if you’re a buyer on these streets then you’re going to be buying a boat slip, and that is always a good thing.

Some buyers don’t want boat slips. I’m not a boater, they say. I don’t even own a boat, why would I want a slip? Considering I’m a sage old Realtor at this point, I can tell pretty early on if the buyer is the sort who claims to not want a slip but who will, at a later date, wish for one. If a buyer wishes to spend $300k on a lake access home, that’s terrific news. But that buyer won’t be buying a boat slip for that sort of money. The home they can buy will be nice enough, with lake access through an association park and pier system, but a transferable slip will not be possible at that price range. However, if a buyer is looking at $500-600k lake access homes and doesn’t think they need a slip, I’ll always encourage that buyer to consider homes with a slip first. To vacation at Lake Geneva and not have access to a boat is like sitting down for a dinner at your favorite restaurant and not being allowed to order.

Last week, I closed on my listing in Shore Haven for $675k. This was a nice house with terrific proximity to the lake, but that’s not why it sold. It sold because of its wonderfully large and deep transferable boat slip. Today, the home next door to that one is closing to a customer working with me, and that home will be selling because it’s cute, sure, but mostly because of that slip.  Today, buyers searching for sub-$800k homes with boat slips are not going to be overwhelmed with the multitude of options available to them, but they are going to have options. As of this morning there are 6 homes with transferable slips (or pier) for sale priced under $800k, including my rare offering in Ara Glen listed at $775k.

The next home to sell on this list will likely be my painfully cute cottage in the Lake Geneva Club listed at $609k, pictured below. That home has a nice slip, a double lot, and all sorts of cottage charm. If you want to pull up to your lake house and feel a deep sense of contentment, then email me and let’s make a deal.  It’s May 1st, which means summer isn’t some far off thing we’re quietly dreaming about. It’s right here, right now, and before you know it you’ll be sitting in your Saturday suburban back yard wondering where all your cool neighbors went.  The time is short, but there’s still plenty of it. Buy this house, be in for Memorial Day Weekend, then wonder how you ever spent Memorial Day Weekend anywhere else.

$609k, with slip.

 

Black Point Sells

Black Point Sells

The whole lake is special, we all know that. Every nook and cranny, whether our particular nook or our own favorite cranny, is unique and valuable. Some North Shore dwellers couldn’t fathom the horrors of living on the South Shore, and those South Shore owners would rather be dead than find their pier numbering 1-411. But there are universal bright spots, rare locations where the stretch is just right. The trees greener. The water bluer. One cascading landscape falling into the next, on and on, until the unique nature of it all turns to a different flavor, a different style, favored by someone else but not by everyone. These particular sections of the lake are sometimes obvious. Basswood. Snake. Creek. The lanes that offer up our best.

But the other areas, those are more nuanced. I once had a client who could have owned anything he wanted on this lake, and it was a difficult push to get him to move from his lakefront house in Glenwood Springs. He loved that house. That area. Those streets. The way the lawn runs uninterrupted for 1800 feet, give or take. He learned to love what he knew, and when the chance to move on presented itself, bold and immediate, he paused. Because Glenwood Springs was where he felt most at home.

This week, I closed on a hilltop house on Black Point. Black Point is just to the East of  Majestic Ski Hill. It’s dark and it’s intimidating and it’s high. The Black Point Mansion once anchored the entire point, but is now relegated to the land on the West side of the point, and everything else has been developed into large lakefront and lake access parcels. The homes there are varied, but mostly vastly improved and manicured. Two years ago, a 1980s cedar house came to market for $1.395MM. It was a nice enough house positioned in a most incredible way on the top of the bluff that runs from deep under the water and up to this very tippity top. The house is surrounded by towering pines, the sort that create a most audible white noise whenever the wind rustles. Under the summer sun, the sweet aroma of pine sap is unavoidable and welcomed.

The problem here was that the house just wasn’t nice enough to command that price. It was a nice house, sure, and the location was incredibly desirable, but the house lacked the sizzle that the market responds to. There’s a house in Lake Geneva that just came to market around $1.3MM, and that house looks as though it’ll sell quickly. The location is okay, not super unique, but quality. The house, however, has the interior sizzle that buyers clumsily rush towards.  Fancy finished in this market always attract buyers, whether that’s a lakefront home, an off water home, or a primary home without any lake access at all.

And so the house on Black Point sat. It caught the attention of a dear client of mine, but our lower priced interest was rebuffed by the seller. We watched it some more, enamored with those pine trees and that deep water slip. It should be noted that “deep water” is a way we describe slips, often. But in the context of Black Point the deep water is different. It’s really deep. Like immediately deep. Dropped your sunglasses off the end of the pier? A fish with large teeth, irridescent skin and a light dangling off its head in front of its eyes just ate your RayBans.  The house, no matter that location and that slip and those two acres of pine trees, didn’t sell.

Over time, the price was adjusted. Lower a bit here and lower a bit there.  This spring, after the property was growing a bit weary, we bid again. That deal was negotiated to an end, and the cedar house on the top of Black Point sold this week for $950k. My client is pleased and excited, as am I.  This is a special location, a prized location. There are others on the lake, some more special and more unique than the others, but this location, man. This location. Congratulations to the new owners.

Mushroom Time

Mushroom Time

When an acorn falls in the forest a squirrel eats it. The squirrels wait for the acorns, then the acorns drop from the trees, and then the squirrels eat the acorns. It’s really not so difficult.  Some of the acorns are washed away in fast fall rains, buried under piles of leaves and silt, hidden away from the gluttonous squirrels.  The next spring that acorn shell will crack, and a tiny oak tree will emerge.  Over some time, the oak tree will grow tall and thick and we’ll look at it proudly and say, “now that’s a tree”.

In the same way a farmer will soon sow his Wisconsin field. He’ll till the soil and fertilize the soil and my wife will stand on the side of the field and picket his seed provider. He’ll plant corn seeds and after a germination period of a week or so, the baby corn plant will emerge. It’ll grow and it’ll tassel and by early August the corn stalk will have healthy, golden ears of corn. The farmer will wait for the drying of September and the hardening of October and then, or in the month that follows, he’ll harvest.

The farmer doesn’t have days to harvest his field. He has weeks. Sometimes, he’ll leave his field up over the winter, if the cash prices are too low and the granaries are too full, he’ll opt for the cheap storage of an upright field. The corn is already dry, not willing to rot, and the deer can only eat so much of it. The farmer, though he moves in November with urgency, has plenty of time to harvest his corn.

If the acorn is allowed to grow and the oak tree emerges, this is generally accepted as a good thing. Who doesn’t like a sturdy oak tree? It makes for a good leanin’ tree and an outstretched branch of enough heft will make for a wonderful tire swing support.  There’s nothing immediate about an oak tree. No window that opens and closest abruptly. And there’s nothing immediate about a corn stalk, about the way it grows and the way it greens and then turns to gold and offers its seeds to anyone.

These things are not true with the mysterious morel. The mushroom sprouts from the earth, pushes, really, emerges, sort of. It grows and then it’s there and the next day it isn’t. Was it picked by a fellow trespasser? A woman with a wagon is pretending to pick up garbage on the side of this road, but is she really harboring a vast bounty of stolen fungus? Or was it kicked off accidentally by a bounding deer. Or pecked at, momentarily, by a strutting turkey. Where did that mushroom go?

No one really knows. It’s here now and it’s gone tomorrow. Maybe it lasts a week. But the wind blows and the tips dry and the bugs eat and the rain swamps. There’s no reasoning to this madness. It’s mushroom madness, really. Which is followed closely by Morel Blindness; a condition that strikes at the most inopportune of times. The season is upon us, and unlike the lazy corn or the sturdy oak, this isn’t a game for the passive. It’s a game for those who have work to do but would rather find their way to the dead trees and the sunny southern slopes. It’s mushroom time, ready or not.

Geneva Lakefront Sales

Geneva Lakefront Sales

Now see, that’s a spring weekend. When I write about how much I dislike spring, I should be clear: I am not an opponent of seventy degree April weekends when the trees are blooming and the tulips are blooming and anything that was seemingly dead has now come to life. I dislike early spring, ugly spring. March, you know what I’m talking about. This is the spring I love, and this is the spring we’ll have from this day until the last day, when summer arrives. If you don’t feel the immense buildup towards another Lake Geneva summer, then I’d only ask what it is you’re doing with your life.

Last week, two lakefront sales.  My listing on Park Drive on the south shore sold Friday for $1.2MM. That’s a 60′ level lakefront lot with nice views, a three bedroom house and a two car garage. To be sure, there’s nothing super fancy here, but there is a solid house on level frontage with a private pier. $20k per foot is a price the market will pay often for such a property. I was pleased to get that property sold, both for the long time owner and for the new buyer.  This is also my first lakefront closing of 2017, but rest assured, there are more to come.

The more interesting sale last week was not mine,  and even mentioning this brings me  and my extended family intense, enduring shame. This was not my listing and it was not my buyer. Ever notice how you get emails from agents or you see their “sales” on social media, and it seems as though one agent is selling absolutely everything? That’s because agents like to disguise the fact that the sale was not actually theirs. I can’t be like that, I won’t be like that. So I’ll tell you when I sold a property or when someone else sold it. This seems the only honest way to approach this. Oh, and those Facebook ads you see where an agent is advertising a particular property? That’s not always their listing, either.  The online and print real estate game is changing, and the lines of what is and what might be are increasingly blurred. Onward towards the sale that wasn’t mine.

Sidney Smith is a nice lane.  There are nice houses and super nice houses here, nothing bad. The lakefront, East of the Smith house, was always nice, but never particularly improved. Decent houses occupied the strip of land between the Smith estate and Loramoor, but nothing had been built there for several years. A couple years ago two lakefronts sold on Sidney Smith, both homes that were either tear downs or renovation candidates. Alas, as this is Lake Geneva and the year is post-2012, the two homes were torn down and two new homes were built. One of the new owners was just beginning construction when they had a change of plans, and the house hit the market.

Now, it should be noted that Sidney Smith is nice, which is why I already noted it. It should also be mentioned that these lakefront lots measure 105′ in lakefront width. They are nice lots, but they are not estate lots. The closest comparable lot size would be found on Lackey Lane, both in terms of front feet and overall land size (about three quarters of an acre). As you may know, I sold a stylish Orren Pickell house on Lackey last summer for $4.275MM, and in the same year I sold two land value deals on Lackey in the $1.9MMs. The land on Sidney Smith had sold for $1.925MM in 2015,  further solidifying the comparable status of Lackey and Sidney Smith.

This home that hit the market last summer did so at $3.895MM, and sold after a short time on market. The buyer was not buying a finished product here, rather she was contracting on a house that would  be finished the following April. The sale closed last week at $3.8MM, though I understand there were added upgrades that may have impacted the actual buyer cost. Still, we can look to this sale and see how it makes sense, especially when compared to the Lackey sale from last summer.

That said, this Sidney Smith house was not on par with that Lackey house. On the exterior, it was more basic, less ornate.   Though the square footage was similar, it was less of a house.   But the SS sale proves one thing about this market, and that’s the level of construction that buyers are willing to trade for their four million dollars.  The homes do not need to be stunners. The lots need not be estate quality. The houses need to be nice enough, the land nice enough, the location nice enough. Long gone are the days when $4MM bought an estate. This was the case as recently as the early 2000s, but this is not the case today. Four million dollars will buy a good property with a good house, or a great property with an okay house, or a great house with an okay property, but rarely will it buy a great house with a great property.

The sale matters if only for the fact that it solidifies what the market can offer a buyer for $4MM.  This also reinforces the smart decisions being made by those who have purchased 100′ of land in the last few years and are, or will be soon, building new homes on those parcels.  The market is rewarding new construction, so if you have it and have a hankering to sell it, let’s talk. If you’re a buyer and you’d like newer construction but you can’t find it, we should also talk.

 

Aged Lakefront Inventory

Aged Lakefront Inventory

So much excitement, so early on. New pictures, new mulch, new signs. This is going to be it, this is going to be the year. The month. No, the day. Will it be today? It might be tomorrow. Certainly by Saturday. Sunday, well that’s a day off for many. Monday? Could it be? No, it’s not. A few days later nothing. Weeks, nothing. Months, nothing. A showing next Friday! That’ll be the one. What took so long? The showing is a bust. The buyer’s daughter had the sniffles and so they decided against the arduous trip up paved roads from so far away as Barrington.   There was once so much optimism, so much hope. So much blind faith. And now, nothing. Days to months and months to years.

To be a seller today is to be confident. The markets are hot, mostly hot anyway, or so the newspaper says. Certain markets are slowing, the Hamptons, Manhattan, Beverly Hills. But are they slowing because they were recently too active? Are they only slowing now relative to the torrid pace of the last half decade? Are they slow, or just less magma than we’ve recently been accustomed? Even so, those are those markets and this is this market. Sellers at Lake Geneva are, for the most part, bursting with enthusiasm.

And that’s fine, for a while. Initial enthusiasm is life affirming, and it’s important. Sellers should be proud of their house, proud of their mulch, proud of the photos. Proud of that real estate description (see my prior post). Lake Geneva is a market filled with nuance and irregularity, and for those reasons alone, every seller has hope. That house sold for that much, so my house HAS to be worth at least this much. Oh how much fun it would be to sell in a market that makes complete sense. A ranch on a street is worth the same as the ranch on the same street. Here, the ranch can be worth more or less depending on so many factors, all of which are not entirely clear.

This is the new seller situation, but what of the aged seller? What of the property that hit the market with speed and has since, over time, dulled to a fruitless crawl? How does that seller feel bout so many mentions of a “hot” market? The initial emotion is anger, not at the market or at the house, but at the broker. This is the problem during times of these active markets. If a house isn’t selling while everything else is, then the blame must lie solely on the shoulders of the guy or gal whose name is on the sign. It’s their fault. And often it might be, but let’s assume you didn’t hire a bad agent, because you’re smarter than that. Then whose fault is this delay?

It’s the price, silly. Hot markets can only overcome so much. An active market might allow a seller a 10% premium over a calculated value, but 20%? 30%?  Where does it end?  The low inventory condition at the lake is one reason lakefront sellers are so confident.  If I have a 1960 Corvette fuelie and I live in BumbleTown, Wisconsin, population 184, do I get to ask  $150k for a car that’s only worth $90k?  But I’m the only 1960 Corvette in town! The absurdity here is the same as a seller who thinks any price is attainable simply because the competition is nonexistent, or slight at best.

That brings us to the market today, and the confident seller of last year. Last year’s confident seller is this year’s weary seller, and those weary sellers are just who aggressive buyers should be targeting.  New sellers are too optimistic. Old sellers are growing tired, and an ambivalent seller who has let their hope diminish is the best sort of seller for a value minded buyer. Let’s get out soon and find a few of these sellers. Let’s find properties that have been overpriced for so long the seller has no choice but to accept the reality of our lower offer.  Sure the market is hot. Sure new inventory won’t be easy to buy without paying a market rate. But in spite of this, there is opportunity if only you’ll throw your attention towards the sellers that the market has forgotten.

Descriptors

Descriptors

I might have figured out what’s wrong with me. It’s not that I don’t want to write something every other morning, as I have for the past nine years. I do. I really, really do. I drive to this desk and I think along the way, what should I write about? I play through the usual suspects. Spring? Green Grass? Blooms? Wisconsin is the best but Lake Geneva is better?  Something sold? Something listed? My teeth? My back?  Dumb sellers? Dumb buyers? Foreclosures?  These are the common themes. But the first thing I do when I sit down is scroll through the new inventory. Sometimes it’s just a few listings, sometimes it’s thirty, or forty. I look at the pending and sold listings from the night before. I read the descriptions.

And that’s when everything goes dark. I read about immaculate ranches with dazzling backsplashes. I read about heaven, often. What it’s like, who is there, how it’ll all be. Apparently it’s going to be a raised ranch with new carpet in the lower level and stainless appliances.  Sometimes, I wonder about perfection. What is it, can we achieve it? Is there something we should be doing? The answer, after the morning scroll, is yes. It is achievable. It is something we can do. All we need is an above ground pool and a few freshly planted Impatiens. That’s it. Perfection, achieved.

This is what’s wrong with me, but it might be what’s wrong with everyone else. The real estate business wishes it could change. It really does. Like a drunk who just wants a little sip on a  Saturday, it doesn’t want to want this. But real estate can’t change, it won’t change. It’ll always be the same. And that’s not because of the real estate agent, it’s because of the consumer. If Joe Blow Realtor Guy can write about how elegant a house is just because it has white carpet in the dining room, how can we stand a chance?

Not just as real estate consumers, but as a civilization. If so many are having their breath taken away each and every day just because there’s a wood stove insert stuck into the failed chimney, can mass extinction be that far behind? If buyers are so readily interested what they might achieve in their life, can you blame a Realtor for saying, in all caps, ALL THIS CAN BE YOURS?  If that promise of delight doesn’t get to you, perhaps this one will work? It’s a ranch in Elkhorn, but what you don’t know: IRRESISTIBLE GOT TO BE SEEN RANCH.

I can’t, and so I won’t. But that’s what’s wrong today. It’s what’s wrong every day. The world is dumbing around us and the world of real estate is leading the exodus from intelligent dialogue.  En masse, buyers are looking for kitchens with decorative ceramic tile backsplashes, and if this is what they want, who are we to stop them? If I’m to be reminded of a  bygone era each time I walk into that vinyl sided colonial in that corn field subdivision, can you blame me for wearing these plowing boots and chewing on this large piece of field grass? How could I work, knowing this bygone era is waiting for me each and every time I go home? Why would I ever leave?

So I suppose that’s what’s bothering me. How can I play in this game when the whole game is reduced to a blithering mumble of absurd adjectives? I know lots of adjectives, but how could I use them to describe a kitchen with HotPoint appliances? Stainless Steel, I suppose. Or Shimmering Stainless Steel, because then I evoke emotion and alliteration, and what is one without the other?  Want immaculate perfection and an amazing mud room with mini fridge, for those moments you walk in the door after a long, multi-day cross Saraha hike?  Well then you’re in luck, it all exists in a $120k condo near Pell Lake.

These seemingly random examples of horrific real estate ad copy were not figments of my imagination. They were all culled from the new inventory this morning. This is why I will never understand how to effectively write ad copy, because most of these homes will sell, and right now someone is reading about that elegant white carpeted dining room and realizing that they’ve waited their whole life for such elegant, European sophistication.

Guest Post

Guest Post

My son had a school writing assignment due this week. I read it and thought it was entertaining. He shares some characteristics with his father. Also, I don’t feel like writing anything this morning.

 

A Great Big Trout

by Thomas Curry
Theres no other way to put it. I’m lazy. That’s why whenever my dad says we’re going to Viroqua, I cringe. I cringe at the fact that I have to get out of bed and drive a total of six hours in a car all in one day. But on every one of those special days that are set apart to go fishing and check up on our cabin thats being built near Viroqua, I eventually muster enough energy and will to get out of bed. I go because of my love of fishing and our soon-to-be-finished-cabin.

By the time we even get to Viroqua, my dad and I have heard every Blink-182 song there is, contemplated whether or not to get the flavor of the day from at least five Culver’s, and we have also already devoured at least one twelve pack of tacos from Taco Bell. But one of the most satisfying parts of going to Viroqua is just looking out the window and watching the topography of Williams Bay slowly turn into the rolling hills of the Driftless. Our first stop in Viroqua is the Food Co-op. There are chocolate covered peanuts at the Co-op. There are also dried mangos and a bunch of healthy food and hippies. This is always our first stop, and usually our last stop as well. The Co-op is mainly where we eat in Viroqua, but there is another place, The Driftless Cafe. My favorite thing to get from there was the Barbecue Panini until one tragic day when they took it off the menu. That was a sad day. After we go to the Co-op, we usually go to our cabin and do some work there. Our cabin is black with a metal roof.

After work at the cabin, it is time to fish. But we are not normal, middle of the road, spin fisherman; we are fly fisherman. We pull up our waders, put on our boots, and “gear up” by putting on our fishing pack full of flies, hemostats, and other cool things. Shortly after driving around and making fun of the out of state fisherman, we find the perfect stream to fish. The stream that my dad and I fished last week was a beautiful, winding stream full of waterfalls formed by springs. There was a pasture next to the stream, filled with cows. Around the stream was tall grass. Although beautiful, at first this stream was not giving us what we wanted- fish.

You see, trout are not like other fish, they can not be caught with ease. Other fish will eat anything you put in front of them. For example, the bluegill. A worm? The bluegill already ate it. A jig? The bluegill already swallowed that. Trash? The bluegill ate that, of course. But try to harass a trout with a jig? The trout is spooked. Other fish are also dumb. The trout is the perfect mix of brain and brawn.

One of the worst parts of fishing to me is when my dad is catching all of the fish and I am catching none. That’s what was happening to me last week for a majority of the time. The turning point of our fishing trip was when we approached a wooded section of the stream. When you are fly fishing trees are actually one of the biggest concerns. Nothing is worse than losing a fly to the clutches of a tree. My dad told me to go up further ahead of him to fish a section of the stream. This section had a tree branch hanging just above the spot where I needed to cast in order to catch a big trout. I cast in that spot over and over until finally I was about to give up. My dad was calling me and telling me to follow him further up stream. “One last cast”, I told him. I placed the final cast right below the hanging branch. The fly drifted for a long time and I was about to move on with my dad when I felt a huge tug on my line, as if I had caught a rock. It was a fish! It was fighting hard as I yelled for my dad to come over. He told me to keep my rod tip up. The fish was extremely energetic, it whizzed all around the stream, back and forth, up and down the stream. Finally the fish was worn out. I picked up the fish and took a picture. It was a brown trout. The biggest of the day.

Every time I go to Viroqua I realize the reason I get out of my bed on those mornings. I get out of bed because of days like these. Days where I catch big fish, add on some calories, and spend time with my dad. Not every kid has fishing days like this. Some kids use spin reels. Some dads make their kids only fish with worms.

The End