Lake Geneva Market Pricing

Lake Geneva Market Pricing

Lake Geneva Market Pricing

One easy way to gauge the strength of a market is to look at those homes that are under contract and consider their market history. Some would look only to the active listings, then to the pending listings, then to the sold listings, and they’d add up the numbers for each segment, divide by 12, carry the 1, and tell you, definitively, that the market is either healthy or weak. This is how Case Schiller works. Look at the active listings, add them up. Look at the sold listings, add them up. Compare those numbers to the year or the quarter before, and proclaim a market on the rise or in decline. This is fine for national sorts, but this isn’t acceptable for those who wish to know more about a local market and to understand it on a deeper level.

This morning, the MLS shows eight lake access or lakefront properties listed as under contract (a few more under pending), though I know it to be nine because I have one under contract that isn’t on the open market. Of those marketed eight, the prices range from $149,000 to $4,575,000. If we’re market glancers, we’ll see this spread and assume that the entire breadth of the market is active, but we’re not glancers, we’re diggers. Let’s consider that $149k house in Cedar Point Park. That’s a a price that seems to me to be reasonable no matter the condition of the house, which is a good thing, because this condition is not terrific.  Did the house just hit the market at $149k and then sell immediately? Nope. It actually came to market in October of 2015 for $189k, and was subsquently reduced until it found its buyer.

The other pending sale in Cedar Point Park is of a lake view home on Bayview. Listed at $825k, it’s a nice looking cottage style home with some significant upgrades, located just one house off the lake with a pleasing water view. It’s a good house, and I like it quite a bit. It’s just to the South of that ridiculously lovely home on Wilmette that I sold a few years ago. This $825k home is pending, but what path did it take to get there? It sold for $1,150,000 in 2007, during our market peak. It came to market in March of 2015 for $995k, and the market yawned. The price was dropped to $825k and there’s a buyer.  This property is important because it proves my burgeoning point about market pricing, and it should serve as a reminder that 2007 pricing is not 2016 pricing. If you were thinking it was, shame on you.

Oriole Lane has an odd little lakefront just East of the Knollwood Park. Listed at $1,125,000, it’s a cheap entry level lakefront. Did it present to the market and sell quickly, without hesitation, because it was cheap and the frontage level and the quirks of the house easily overlooked? Don’t be so naive. It came to market in 2013 for $1,495,000, before facing systematic reductions and settling at the new asking price of $1,125,000 last fall. Now it’s under contract. An entry level in Dartmouth Woods listed at $1,450,000 was brought on in the winter of 2015. It didn’t sell. Then the price dropped to $1,350,000 and the charming lake house is pending sale.

There’s a lakefront pending sale on LaGrange listed at$2,125,000. It’s a nice, newer home, even if it’s in the shadow of Vista Del Lago, and it’s under contract and that’s fine. It came to market in January of 2015 for $2,149,000. The lakefront on Bonnie Brae is pending with an ask of $2,431,000. It came to market in March of 2014 for an absurd $4,300,000.  The large brick lakefront on Conference Point is pending sale at $3,850,000. It first appeared in January of 2015 for $3,950,000.

The Lackey Lane lakefront that I have pending with a buyer whom I’m super happy to represent came to market for $5,275,000 in August of 2015. It’s now priced at $4,575,000 and pending sale. It’s a nice lakefront, pending around replacement value, and it makes sense. Did it make sense at $5,275,000? Did the Bonnie Brae house make sense at $4,300,000? Did Oriole at $1,495,000 look appetizing? Did the little cottage in Cedar Point for $189k interest the market? These are the rhetorical questions that prove our market loves price reductions. There’s a theory floating that says if you list cheap you’ll sell quickly. This is true, but who wishes to list cheap and blow their house out the door within a few days of listing it? Some people do, depending on circumstance and motivation, but this is not the norm in a luxury market. Houses hit the market, then the market responds. Smart sellers listen to what the market is telling them and they adjust their prices accordingly. At Geneva, these eight pending sales offer the proof: If you want to sell you’ll list, listen, reduce, then close.

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