If I’m really going to start taking requests, I should probably figure out how to set up a web-based tip jar. A reader suggested that I provide an update on the entry level lake access market, and so, since I aim to please, here is said update. While the fall market at Lake Geneva has been nothing short of spectacular, the activity hasn’t been spread out evenly over the entire vacation home market here. I discussed the momentary troubles of Abbey Springs on Wednesday, and this post will sound quite similar to that one as the market might be improving, but certain segments have been ignored. The entry level lake access market is one such market, and I’m pretty sure I understand why.
First of all, let’s delight in the prodigious inventory that exists as of this morning in the entry level lake access market. There are 32 homes for sale with private lake rights to Geneva Lake, and that’s the number after I took out the one pending sale (Country Club Estates), and removed a couple of properties that remain incorrectly listed by incorrect brokers. For the sake of this post, the entry level lake access market is defined as properties possessing some form of deeded, private lake access to Geneva, not necessarily including any boat mooring options, priced less than $400k. With only one pending contract in this price range, that’s not exactly a market that has mirrored the fall success of the upper-tier lake access market, or the private lakefront market. Even so, there is some activity in this price range, just not enough to make me think this segment is healthy enough to make it through the upcoming winter unscathed. It’s like survival of the fittest without all the evolutionary fairy tales and instead of monitoring the survival of a species, it relates to housing. Otherwise it’s just like that.
The entry level market today has offerings in numerous associations: Oakwood Estates, Country Club Estates, Knollwood, Wooddale, Indian Hills, Glenwood Springs, Cedar Point Park, Geneva Manor, and others. By “others” I mean Sunset Hills. I’m not sure why I dislike this association so much, but I do. I’m not going to sugar coat it. I just don’t like it. But it’s not that I boil over with disdain for the entire association, instead I focus the intensity of my rage at the homes located north of Highway 50. What I want in a summer home, even one in the lower reaches of our market, is easy proximity to the water. I want to be able to walk to the lake. I’d love to stroll to the lake, or saunter even, but I’d settle for a walk. I’m not interested in lacing up my running shoes that I obvious don’t use either, I’m only interested in a comfortable, sandaled (not a real word) walk down to my private lakefront pier and park area. That’s what I really, really want. Sunset Hills as it relates to properties on the north side of Highway 50 involve the crossing of that highway in order to get to the lake. I dislike this. In fact, I wouldn’t ever consider buying a vacation home there. But that’s just me, and I’m just a chubby kid from Williams Bay.
If entry level lake access is my goal, I’m going to stick with the tried and true favorites like Oakwood Estates, Country Club Estates, and the Loch Vista Club. I’m going to look for properties that are close to the lake first, and properties that look pretty second. I want proximity, and darn it all, I’m not going to stop until I find it. My listing at 521 Wilmette that has been ignored by the market is one such listing. While I prefer to saunter to the lake, this home is so close to the water that I could actually lay on my side and roll my largess direct from the front door of this home into the lake, and it wouldn’t take me more than a minute to do so. It’s painfully close to the lake, and should be revered as a result. Other homes with great proximity right now exist in other associations as well, but if you’re a buyer in search of a boat slip and you want to be in this lower price bracket, there is only one option- Glenwood Springs. There’s a cottage in this fine association that is listed at $350k, and it’s hands down the cheapest home available with a boatslip on the entire lake. The cottage is limited, but cute, even if it does walk a very fine line (or at least blur it), between cottage and cabin. Click here for a refresher on the difference.
There’s a reason that the entry level market is slow, and it has everything to do with the real estate market in your home town, and even more to do with your bank. In the glory days, where everyone with a high six figure income could purchase a vacation home here, home equity was prevalent and easy to tap. If a $300k summer home fit your eye, and you had a $300k line of credit on your primary residence, you could easily borrow $100k against the vacation home with a first mortgage, and provide a $200k “cash” down payment to cover the rest. The purchase looked like it was largely cash, but in fact, many of these purchases were fueled by equity in primary residences. Fast forward to 2010 and not only has the equity shrunk, but HELOCs of any size can be difficult for many borrowers to secure. It’s like Boy Scouts 101, if you take away the source of fuel, the fire is going to die. The entry level market isn’t plagued so much by market conditions at Lake Geneva, it’s suffering because of the market conditions in Naperville.
I don’t expect a year ending flourish for the entry level lake access market here. I think we’ll continue to putz along, and possibly pick up another two sales before the end of the year. While the lakefront and upper tier lake access markets have their quarter in the sun, I think the entry level market may very well sit this one out. As the market slows, look for a deal in this price range sometime after Thanksgiving and before Christmas. If you’re a buyer in this sub $400k price range, and your financial house is in order, the next 6 weeks might prove to be a veritable all you can eat buffet for your vacation starved existence.