I’m hearing some Realtors deliver some classically breathless sales pitches lately. “Buy now before it’s too late!!!” Or this oldie but goodie: “Things are turning around, and you don’t want to be left out in the cold!!” Then there’s the pitch that’s so tied in knots the only audible word is “buy”, repeated over and over again, mumbled, as sweat beads and rolls down the face of the offending agent. It’s a rough world out there, and when I lick my finger and hold it up to test the sentiment of the real estate world around me I’m reminded that it’s good to be in the world, but not of it. I too think many times are the time to buy, but not for the same reasons as my feverish friends.
At 5200 pristine acres, Geneva is one very large lake. Geneva is also one very small market. It’s extremely easy to understand, and once you wrap your mind around the truth that this is a low volume, very exclusive market, your buying behavior should change. It’s like the buyer who purchased the Clear Sky Lodge property from me in May. That buyer, one of my all time favorites, wasn’t too motivated to purchase that fine estate home once he learned that there was another buyer on the scene. He’d wait it out, after all, he was in no hurry. It was only after I reminded him of a simple Lake Geneva real estate fact that he began to negotiate with fervor. I said, “this is a small market, and if you think you’re going to wait for the next property to appear that will be exactly like this property, you’re going to end up waiting forever because it doesn’t exist”. Or something like that. The reality is, no matter what my wife says, I’m right. Geneva is a small, low volume market, with very little repetition. If you find what you’ve been looking for, chances are it won’t be coming around again any time soon. Buy because prices are going up, up up!!!, no. Buy because what you just found might not be available for another 20 years? You betcha.
This reality is true in all segments of the market, but it’s most pronounced on the lakefront. The lakefront market is among the most exclusive markets in all of the country, with perhaps only 12-25 properties changing hands in any given year. 2010 is off to a great start, and I think most of the market fuel is being provided by buyers who have been looking for quite some time and just now they’ve found what they were looking for. These people make Bono look like an indecisive chump. There have been 8 lakefront sales on Geneva YTD, with at least two others pending. Of note- the two properties pending sale are both priced in excess of $5.7MM, including the estate priced at nearly seven million that my buyer has a contract on. The most recent lakefront sale closed at $3.575MM just last week, and with 160′ of frontage and 3+ acres, this was a classic estate setting that a motivated buyer deemed worthwhile, and he pounced on it just a couple of weeks after it was originally listed (for $3.840MM).
With 8 YTD sales, we should probably look at the past few years to garner some historical context. The same period in 2009 saw only 5 lakefront sales on Geneva, and 2008’s YTD figure of 8 was the same as 2010’s. 2007’s YTD figure of 12 is better than both, but not by much. If we can close the other two deals that are pending as of now and find a way to close another 4-6 deals in this calendar year, 2010 will be remembered as a strong year for the lakefront market here. Something important to note- prices of listed inventory are slowly dropping even as deals are put together and closed. Just as they say the economic recovery might be a jobless one, I think the Lake Geneva vacation home market recovery with be one that occurs without any significant price increases. Buy now if you find what you’re looking for, but don’t buy now because some agent told you prices are going up (up, up, up!!!).
The best value in the lakefront market, in my mind, is in the entry level portion of the market. There’s a great deal waiting to be had in the mid $2MM’s, but the remainder of the deals look to be in the sub $1.7MM price range. Two entry level properties in Fontana priced in the $1.4MM’s look particularly attractive to me at the moment. Should you wish to take a look at any of these lakefronts and get a feel for what’s available, I’m all yours.