Lake Access Market Update

Lake Access Market Update

A quick note- for those of you who have so tenderly reminded me that I was supposed to have walked around the lake last week, I assure you I have not forgotten my pledge to complete the herculean feat. I announced on my twitter page (follow me please, in the event that you haven’t yet) that I’ve had an unfortunate development of upper back/neck pain which led me to postpone the event. Sounds pretty wimpy I agree, but my back is a fragile flower, and I can’t risk hurting it any further right now. I’ll be attempting the lake walk again on 10/29, Lord willing.

Back to the present. There are roughly 34 different residential associations that offer private lake access to Geneva Lake. They range from large, well known associations like Country Club Estates and Knollwood, down to the very small, oft overlooked Club Unique and Camp Sybill. On the market as of today, there are roughly 110 such homes, priced from a budget pleasing $185k (Glenwood Springs) to a robust $1.725MM (Congress Club). The bulk of the market resides in the $300k to $750k value range, and there are ample offerings of all different sorts of properties within that spread.

Our inventory is stalling a bit, with new listings coming on at a much slower pace than we saw earlier this year. It sort of shoots holes in the popular theory that says inventory increases in the fall as owners decide to sell after a potentially disinterested summer. Inventory is not increasing at a significant rate, and I’m guessing that lethargic trend will continue through our spring selling season, which begins in earnest about a week after Super Bowl Sunday. If inventory remains low, and our absorption rates pick up even a little, we should have the makings for a solid spring 2010 market.

I know, I know. I’m getting ahead of myself. There are plenty of deals out there right now, but they are deals that are largely confined to small cottages in wonderful lakeside locations. The lake access market, like the lakefront market, is top heavy. Listings are sitting in the upper reaches of our lake access market ($900k to $1.5MM) that have no business being there. Some of the newer listings particularly appear to be priced via the dartboard method, a method that reeks of 2005 and has little value in 2009. Sellers seem content to sit and wait out the market, which in this case, means they better stock up their basements with canned food and bottled water. Maybe even a checkers board or a ping pong table for the kids, because if they’re waiting for the market to “return”, they better be prepared to wait. Like 2012 wait.

That’s not to say that the market isn’t going to move positive for 3 more years, but it does mean that properties that refuse to adjust to the new realities of pricing are going to sit for quite some time. Much of our market has chased prices downward, which is a smart move second only to getting out in front of the market and pricing to sell from the get go. I’d estimate that at least 70% of the lake access market is currently overpriced by as much as 10% to 20%, and an unforgivably large percentage of those homes might be as much as 30% overpriced. It’s a tough market right now, and although buyers are present in this market in larger numbers than we saw in the spring of this year, we still have a long ways to go.

If you’re considering a lake access home purchase in the Lake Geneva real estate market, I urge you to be active in this market. There are deals out there, deals that can only be explored by writing offers to see who’s willing to play ball. There are also several impressive properties that I just love in this marketplace, including a pseudo-lakefront home on Conference Point that I can’t get enough of (mid $1.6MM’s). Whatever your vacation home seeking heart desires, I’d love the chance to help.

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