As a function of my job, I talk to lots and lots of Realtors. Some of the talk is business related, and much of that talk is focused on what is or is not happening in the market at that moment. Realtors, like most in sales, have a tendency to exaggerate. As long as I approach a conversation with that understanding, I can fairly easily decipher whether what I’m hearing is reality, or hyperbole. Since I’m part of a very small group of Lake Geneva agents (perhaps as few as 20 in my book) who primarily sell vacation homes around Geneva Lake, my conversations rarely provide any insight into the broader Walworth County market, instead focusing solely on the vacation homes surrounding Geneva. What I’m hearing from other Realtors is that business is picking up, and I’m trying my best to believe them.
If business is on the rise, the MLS statistics as of this morning aren’t a very accurate indicator. The MLS says there are 142 lake access and lakefront properties for sale surrounding Geneva Lake. The cheapest is a cottage in Glenwood Springs listed at $185k, the most expensive a lakefront listed at nearly $8MM. New listings have slowed considerably, and the only new lakefront listing to hit the market over the last several days isn’t a new listing at all. It’s a retread from last year, but at least the price is a bit better this time around (a touch under $2.5MM). The active inventory aside, I’m aware of only two lakefront or lake access homes under contract right now. One is a terrific property in Oakwood Estates- the very home that I told you would sell quickly, and it did. The other is a contract that I’m helping broker at Clear Sky Lodge in the mid $2MM’s. For all the positive talk, the talk and the statistics aren’t reconciling too well.
One of my favorite things about vacationing in Marco Island is talking shop with the agents there. No matter what the conditions, no matter what the market looks like, they will always have an upbeat opinion on the market. Every season is the time to buy, every day the market is getting better. 2004? Hot market. 2007, right before the collapse? Hot market. 2009, right after the crash? Burning hot market. 2010? Better buy soon before it’s too late. They’re great at selling the sale, as are many local agents. Fortunately, I’m not of that ilk, and I’d rather report the market exactly as I see it, not as I wish it was.
So if the mood is positive, why are the numbers so anemic right now? It has a lot to do with motivation, and even more to do with inventory. I’ve been complaining about the poor lakefront inventory for much of the last year. I continue to bemoan the fact that our inventory isn’t as sterling as I’d like, with a particular void of quality in the upper $2MM’s to mid $3MM’s. I’d like to see some more inventory in that range, and I think there are plenty of active buyers who would snap up a quality offering or four in that price range. Even with the poor inventory as it exists this morning, there are still five or six tremendous lakefront properties available at competitive prices that I think should sell in the next couple months (most economical lakefront is at $1.495MM for lakefront as of this morning). I think the motivation factor remains low, and aside from two or three of my current buyers, I don’t see a ton of motivation in the market right now. There are, however, plenty of buyers active right now, but many of them lack the awareness that another wasted summer isn’t something that anyone should willingly oblige. The Realtor’s are largely telling the truth when they say they’re busy, but with the MLS statistics where they are, it’s obvious that they’re busy with many buyers who are looking, but few who are actually buying. If those lookers start buying, their reward will be the honor of allowing this Lake Geneva summer to blow their collective minds.
Six weeks from Friday is the start of Memorial Day weekend. The next six weeks will make or break or 2010 market, and I think we’ll see a significant number of pending contracts over that time frame. I know of several active offers right now, and hopefully buyers and sellers will find a way to put together some of those negotiations. If they do, then perhaps the Realtor small talk and the MLS statistics will finally reflect the same sentiments.