It should be no secret that the cool people are buying at Lake Geneva. It’s not just the people, but the cool people. The kids who live in the city who know that city life is for weekdays. The young affluent set that realize brunch lines are best left for 24 year olds who have yet gained the financial ability to escape the clutches of that tall city for two days a week. This is the group that has learned of Lake Geneva, embraced Lake Geneva, and are benefiting from Lake Geneva. Our market is benefiting from them as well, as there’s a new generation coming to these shores to indulge in the things that make this place so darn special. But while this new generation of buyers is needed and wonderful, the last generation is still active in the market. Each year there are new faces, new families, new kids jumping into their dad’s arms from white wooden piers for the first time, but each year there are also the others, those who have been here who just felt the need to do something different. Something bigger, something smaller, something on this shore instead of that shore.
This week, I sold W3818 Lackey Lane for $4,275,000. I negotiated that deal on behalf of a cherished client last November, and from that day in mid fall through this day in late spring, the property was under contract. The buyer waiting with nervous anticipation. The seller, presumably, hoping the deal would hold together and close. It did, and the buyer need only sit in a lakeside lounge chair on a day like today to realize the reward of the effort. The seller need only check his bank account balance to see his reward. The deal worked, and for that we can all be pleased.
The lake has a considerable absence of printed sales in the $4MM range. The reason for this is quite simple: There just aren’t that many high quality, newer homes on reasonably large but not huge lots. The trend on this lake has been clear: Buy a beautiful lot between $3-4MM, tear down whatever might have been built on the lot, and build new. The new build costs for these larger homes are safely between $3-6MM. The lake has gone long on builds with all in costs between $7-10MM, and yet these newer properties, excepting the incredible home on Pebble Point, have not typically come to market. The cliff-top sale in Fontana in the low $5s last year was as close as we’ve come to touching on this particular segment. But what’s less common is a $2MM lot with a $2-3MM house on it. These are the types of properties that the market could more easily absorb, and this is where Lackey Lane fits in.
This sale, for as common as it might look in this market, is somewhat rare. It’s a newer Orren Pickell built home, so it’s of pedigree. And along those lines, please don’t forget that builders matter here. If you wish to obtain some level of premium when you look to sell your newly built or dramatically renovated home, I do hope you’ve chosen a builder wisely. Pickell, Lowell, Engerman, these are the names that matter to this lake. Don’t think they don’t. And so this home was built properly, with the proper elevated finishes one would expect from a renowned high end builder. The landscaping was ideal. The lot level, 100′ worth. The home large but not too large. The sale making perfect, complete sense.
When this home first came to market last summer, the asking price was $5.275MM. I thought it had a chance to sell in the $5 range, but only because the inventory was low and this was a most beautiful home that the market wasn’t expecting. Alas, it did not sell, and when the price was adjusted a couple of times over the course of the fall, my buyer took notice. That’s why he’s sitting on the pier right now contemplating just how terrific life is on a Friday morning when the water is glassy and clear and the fish swim, dodging only the toothier fish and the plastic baits of the trolling fishermen. The seller of this property was wise to reduce until he found his market. The buyer was wise to wait.
With a decided absence of very recent comps in this range, how do we ascertain value? Well, we look at the land first. 100′ level frontage, $2MM all day. Two more comps on the street for tear downs bear that out. One of those I’m closing on today, the other is available. It should be noted that the other one on Lackey at $2.15MM, along with my Loramoor lot at $2.34MM are the best, easiest options for a buyer seeking a new home on Geneva Lake in the $3.5-4MM range. So if the land is worth $2MM, what’s a 6189 square foot Orren Pickell home going to cost us? Well, it’s probably going to cost between $2-2.5MM. And so there you have it, the cost approach for helping pin point value. In the case of this house, there’s a very real chance that the purchase price is below replacement cost. If we’re considering a lakefront purchase, isn’t that a pretty nice data point?
For now, the new owner will be content in his new lakefront. I’ll be content to have helped. The market will be content to have printed another high value sale. The question is, does a brunch line on Sunday morning really make you content? And yes, I know the hollandaise is amazing.