I’ve been a bit top heavy of late, redundant even, focusing on the lakefront market on Geneva perhaps more than some of you might like. I’ve been telling you what’s sold and what hasn’t, and why this property might be a value and another one might be a trap. I’ve told you these things about the lakefront market because the lakefront market has been the market with the most activity this fall. This was to be expected, though the lack of movement in some of the lower reaches of our market has not been. While I’d love to tell you about Abbey Springs and Country Club Estates, the limiting truth is that the lakefront market is where the bite is hot and that’s where I must cast my line.
This week, one of the two side by side lakefront properties on Fontana’s North Shore closed for $2.5MM. This particular sale wasn’t so much an indicator of market strength as it was an example of a neighbor expanding his lakefront foot print. A vacant lot hit the market a couple months ago for $2.995MM (not my listing nor my sale, unfortunately). That vacant lot was adjacent to a lakefront estate of serious scope and impressive quality, and as tends to happen with vacant land that lies next to such an estate, the large estate swallowed the other estate. This is a happy trend for Geneva, as anything that limits density and encourages sprawling estates might not make the 99% giddy, but it gives the 1% another reason to break into a toothy smile. Securing shoreline against near term development is a positive, and through this horrific capitalistic display of real estate dealings even the Own Wall Street hippies can find value in a little shoreline preservation.
This sale at $2.5MM represents a sales price of $18,939 per front foot of lakefront. This number is higher than the roughly $17,500 per front foot that has been paid for the other large lakefront deals this year, and it’s even more pronounced when you consider that this purchase was purely vacant land and the other three parcels that provided us with the $17,500 average were all land sales with homes on them. In other words, at Lake Geneva it is still purely about the land, just as I said earlier this year in that Shia Kapos Crain’s story. The home can wait, but 132′ of level frontage in Fontana waits for no man. Or woman.
This is the first of three domino sales on North Shore Drive this fall. The other pending sale is immediately next door to this one, and the third is the last remaining lot of an estate separation that took place during 2010. I’ll be curious to see how the price of $18,939 per foot plays out over the next two closings, as I’m betting all three of these sales will come in at a similar price. So where does that leave us? Does that mean that lakefront on Geneva averages out to around $18,000 per front foot now? Does this mean I can (finally) buy a 50′ lakefront lot for $900k? Has my salvation finally arrived?
No, it hasn’t. You are still bound to pay $1.3MM+ for that 50′ lakefront lot, and you’re still going to see other lakefront homes sell this year for prices closer to $20,000 (Basswood) and $25,000 per front foot (Maple), and if we can squeeze in a sale or two of some of these fine lakefront homes that are in the $2MM range with just 50 or so feet of frontage, then we’ll see prices far exceed $30,000 as well. The lakefront isn’t difficult to figure out, but when you’re new to the market and you read through a rash of widely spaced numbers like those, it can admittedly be a bit overwhelming.
This might be a bit redundant today, but it’s important. There is significant lakefront activity at the moment. The market is white hot, and the segment that is heating up is a segment that had been ice cold previously in 2011. The large lakefront estates, measured at more than 100′ of frontage and 1.5 or more acres of land are attracting more attention in the past month than they have all year. This, if you’re a buyer of such a property, isn’t a good thing. When it was comfortable to sit and watch properties hit the market, and even more fun to watch those properties squirm and twist and reach for your attention, it’s a bit disconcerting to see these properties hit the market and sell within mere months, if not weeks. There is motivation in the market, and if that motivation is shared by just a handful of buyers, those properties are not given the opportunity to give in to downward pressure and adjust in price until the unmotivated buyers find the prices palatable.
All that to say this. The lakefront market might be hot, but this is just one segment of the market. The entry level lakefront market has reversed roles with the upper bracket, and is now sitting in relative anonymity, hoping someone will pay it some attention. There are a couple of entry level values currently, and I expect one or both of them to sell before the year is out (Glenwood Springs, Cedar Point Park). If they do, it’ll cap a fall buying season at Lake Geneva that has been less a lazy leaf crunching stroll down the shore path, and more a full on sprint into 2012.
I offer you this, in case you wondered what Snake Road looked like today. Turn the volume down as I was too lazy to swap the audio…