The lakefront market is making steady gains of late, but barring an unexpectedly strong finish to the year, the lakefront market will fall short of the 2008 pace. So far this year, the lakefront market on Geneva has had 9 residential sales. The 2008 YTD figure is 12, and 2008 finished with 14 sales by the year end. We’re on a similar path in 2009, with the 9 sales YTD, and at least another two lakefront properties pending as of right now. The two pending properties are a nice sign, as both entry level lakefronts went under contract within a week of their listing dates. Lakefront starts around $1.35MM for a very basic cottage, and escalates to nearly $8MM for the sort of lakefront home that makes my heart palpitate and my palms sweat.
A curious aspect of the lakefront market is the pattern of purchases this year. The two most recent pending contracts were written at a time when there were other, more impressive, more valuable properties on the market that could have been bought for what I would deem a value. There seems to be a fairly narrow focus on behalf of the buyers this year, and the ones that are buying seem to know exactly what they’re looking for, and what they want to pay for it. That statement is far from insightful, but by it I mean that there are several deals out there in the $1.6MM to $1.8MM range that far outway the value of the properties in the $1.35MM to $1.55MM range. I suppose it’s presumptive of me to think that someone spending $1.45MM can spend $1.65MM, but presumption is one of my finest character traits. There are plenty of other buyers in the Lake Geneva lakefront market, and lakefront showings continue at a solid clip, it’s just that the indecision of most buyers present in the marketplace is relatively mind numbing.
I’m aware presumption isn’t a character trait. It was a joke. So the lakefront market is plowing through this mess of a national market, and sans the single foreclosure that is under contract, the lakefront has been void of any hint of a foreclosure crisis. Much of this has to do with the lack of leveraging present in the lakefront market, and anyone with a $2MM home with a $500k mortgage is going to sell light years before a foreclosure has the opportunity to materialize.
The deals that are in the market right now are largely deals that will require alterations, renovations, or demolition of the home in question. The gold standard for lakefront property on Geneva has always been a 100′ level lakefront lot. That level lakefront lot measuring at least 100′ across was pretty hard to buy affordably over the past several years. In fact, with one glorious sale back in the early 2000’s, vacant lakefront property shot from around $18,000 a front foot to $30,000 per front foot. Today, that cost per foot for available property in the 100′ range is more like $17,000 per, and that my friends, is a deal no matter how you slice it.
Of the 36 active properties with private lakefrontage, I would classify 7 of them as potential values. Again, these are not the overbuilt, glamorous homes that line the lakefront. If you’d like one of those homes, you can indeed buy one, but the value will not be anywhere as aggressive as if you were to buy a decidedly unfabulous home with a beautiful piece of property. You can always build a nice home, but you can’t make a poor location or small piece of property better no matter how much money you have to spend.
If 7 of the lakefront 36 are values in my book, you can guess what I think of the other 29. If you’re sick of your agent declaring every property a value and every location the most desirable, better give me a chance to work with you. I think you’ll love the refreshing sounds of a Realtor who tells you what he really thinks about value. If you’re active this winter, and locate that value that I know is out there, it might be your daughter or granddaughter looking forward to Lake Geneva boatrides next summer. See you at the lake.