If pressed, I wouldn’t buy my lakefront home in the city of Lake Geneva. I’d take it if someone were to give it to me, I’m not stupid. But I probably wouldn’t do it on my own. It’s not that I don’t like the idea of walking to town for my morning coffee and paper. But I get my paper on an iPad, so that’s not really that tempting. I like the views from the eastern shore of Geneva Bay, but I also like the views from many other spots on the lake as well. The real reason I don’t love the idea of a city of Lake Geneva lakefront is because I’m tax sensitive. Correction- I’m tax terrified. I do my taxes in October just to put them off.
But I must be mostly alone in my tax phobia, because someone just bought a lakefront on the eastern shore of Geneva Bay, and they shelled out $2.7MM in cash dollars to do so. The tax bill on the house- a tear down if I was forced to wager- was, is, $70,268. What’s worse, when you go to pay that tax bill you can’t just give them the $70k and call it even. They want the $268 too. This is the price of the city of Lake Geneva. Compare that to a similar parcel (though smaller) in Fontana that closed early this year for $2.75MM was $45,682. Still a hefty sum, but compared to $70,268?
That city tax bill on what is essentially raw land is what will lead to a tax bill of $120,000 or more once a fitting structure is built. Proof you say? Head north, closer towards town. There is a line of lakefront homes there that boast bills from $120k to $155k, and when I say boast I imagine somewhere such a bill is a bragging point. At Lake Geneva it’s more of something to be tolerated, particularly when the owner chooses the city of Lake Geneva as the taxing zip code for their new, presumably lavish lakefront estate. For one last comparison, the home I sold on South Lakeshore in Fontana in 2010 for $5.885MM has a tax bill of $78,302, and that’s after the owner did a very impressive porch addition. That is a crippling bill, yes, but the same house on the same land in the city of Lake Geneva is probably paying $40k more in taxes- at least.
The lakefront market on Geneva, taxes and all, is a juggernaut. It is without rival, and those suit wearing snots on Selling New York/Beverly Hills/etc can deal with it. They have nothing on us, excepts suits and botox (who saw that one guy get the shots in his arm pits?). The lakefront market on Geneva features yet another pending contract this week, this one on Oakland on the South Shore in Linn Township. The property, listed at $1.699MM isn’t my favorite. I like the house plenty, and the property is nice, but it’s not where I’d want to be on the lake. I admit to not liking certain locations on the lake, particularly when other locations are available. This is my lot in life. I am particular, don’t hold it against me. I am glad a buyer is indeed buying this property, but it isn’t a buyer of mine.
There are many other quality offerings on the market today, including several in the entry level segment that might sell at eye popping discounts off of the already attractive list prices. When buyers do ultimately buy these homes they might overpay, but if they’re working with me this is not a possible scenario. Currently I see four lakefront homes pending sale, those priced at $1.695MM, $1.699MM, $2.95MM and $3.4MM. I expect all of these pending sales to close, as most lakefront properties that enter into a contract typically stay connected through a successful closing. Financing issues that plague other markets cannot plague a deal that is contingent only upon the wire from money market to title company arriving on time.
Inventory is strong at the moment, with plenty to choose from. Price reductions are common, even as sales pile up. Price per foot figures continue to fluctuate, and the large lakefront parcel sold this week represented a price per foot of $14,516- far below the $18k per foot average for larger lakefront parcels over recent years. The pending sale on Oakland will likely do further damage to the price per foot number as that listing has 98′ of frontage and will presumably sell under ask. There is value to be had still, plenty of it. As long as stock market stability presides, I expect the next 6 weeks to yield many more lakefront sales. Here’s to hoping you’re involved in one of them (and by default, me too).
Photo above of my lakefront at 1621 E. Lakeside Lane.