Beware The Traps

Beware The Traps

Beware The Traps

There’s a house for sale not too far from where I’m sitting. It has a roof and some siding and windows. There’s even a deck. It’s close to the lake I suppose, walking distance, for whatever that’s worth. There’s an ice cream shop nearby and another ice cream shop not too far from that one. There’s an art gallery, and another ice cream shop.  A bit down the way you’ll find Geneva Lake and a nice beach. When I was a kid the beach goers would shriek when a large Snapping Turtle would ease through the stream and make an appearance on the beach.

The house reminds me a lot of the prior market peak. Those days in the mid 2000s when everything seemed fine, and inventory was as tight as tight could be.  There were brief moments back then when the most affordable listing on the lake was two million dollars. When the most affordable house listed in Williams Bay was over $200k. Those times were difficult for buyers, and in their misery they’d find their way to non-typical vacation homes just so they’d have something. Not so they’d have what they really wanted, but so they’d have a place to hang their hat on a Friday night after a Wisconsin fish fry.

If they had to walk to the public beach, so be it. The lake is the same there as it is in front of your fancy private pier. Or so they’d tell themselves. At their new vacation home they can walk to get ice cream. Try doing that from the middle of Basswood Drive,  they’d say. It didn’t matter that their vacation home didn’t have any deeded lake access. It didn’t matter that their new vacation home was surrounded by non-vacation homes. What mattered is that they paid $250k when the cheapest home available in Cedar Point Park was $350k. They paid $250k when the cheapest home in Country Club Estates was $370k. They paid $250k when there was nothing for sale in the Loch Vista Club or in Oakwood Estates. What mattered was that they paid $250k and they were here, in this place, enjoying the things they wanted to enjoy.

And that, I suppose, is good. But what wasn’t good was what happened when the market tumbled. The vacation homes tumbled, too. Those homes in the Harvard Club and Glenwood Springs, they felt some pain. But the homes in non-vacation home settings, those homes in town that were tapped as fill-ins for buyers who couldn’t find anything else, those homes saw their values crushed.  They were crushed because they spent vacation home dollars in a primary home market. That, my good friends, is a tremendous mistake.

Today, the market is active. Inventory is low. My job is not all that much fun at the moment. Buyers wish for inventory, sellers wish for too much money, and the market is trying to decide who will win. Signs are pointing to the sellers winning, but the war is still being decided one battle at a time.  When the market is low on inventory buyers tend to do one of two things. They either wait, patiently, but anxiously, knowing that some day the right thing, or something close enough to the right thing, will materialize. Or they don’t wait, and they buy something dumb. Something close to town. Something walking distance to the ice cream shop. Something that fills the immediate void, but something that is, undoubtedly, a mistake.

In this market, be patient. Be ready. Be prepared. Be anxious. But don’t be foolish. Work with me and I’ll make sure you don’t make a very terrible mistake.

About the Author

Leave a Reply