When on a property tour with a buyer, whether the first time out or the fifth, I possess a relatively incredible ability to see the market through the eyes of my client. As I drive I talk, and I look, and when I look I see streets as they do, I see yards as they do, I see ridiculously horrible paint jobs as they do. I also see real estate signs as they do, and while out over recent weeks I’ve been increasingly pained by the perception that there is just oodles of inventory in the Lake Geneva market. It seems as though every street has something for sale, and most streets have nearly everything for sale. It seems, at times, as though it would be easier to point out the homes that aren’t for sale rather than focus on the multitude that are. I drive this way, signs. I turn that way, signs. Signs, signs, apparently everywhere there are signs.
But this is perception, and like a big, bold Chicago brokerage opening shop in Lake Geneva, perception is just, well, it’s just perception and perception is rarely reality. That’s why I know better than to be overwhelmed by inventory, because inventory here, as a point of fact, is actually rather low. Sales are up, remarkably so, and the inventory remains low. This is a positive sign for the market at large, but inventory troubles pressure individual market segments, and when inventory is light and sellers are convinced to sell, that means list prices are up. When list prices go up one of two things will happen. Either the market will agree that it’s reasonable to award a seller a premium, or the market will tighten up, and buyers will hold out against sellers, who are, by the mere implementation of their lofty prices, holding out against buyers. This is why markets either inch up slowly or seize up all together. In Lake Geneva today, we’re somewhere in between.
The lakefront and lake access market has at least 13 single family homes pending sale this morning. That’s a lot of action, and the market should be rather proud of itself. While none of those initial 13 are on the lakefront, there are at least three lakefront homes that aren’t listed on the MLS pending sale. That bit of knowledge is key, as it should show buyers that if they’re working towards finding a lakefront home simply engaging any agent or signing up for some automated listings feed is not enough to keep you at pace with the truly motivated. Of course I’m implying that any lakefront buyer should be working with me, but that does make the assumption that every lakefront buyer is remarkably intelligent. This desire to find un-listed inventory is also what forces some buyers to go it alone, to resist hooking up with a qualified agent, because they think they’ll do better to proceed with their home search on their own. This behavior almost always leads to market mistakes, as private deals struck directly between a buyer and seller assume that both are completely plugged in to the current market conditions, which is rarely, if ever, true. There were two vacation home closings this week. One in Glenwood Springs of a vinyl box for $570k that I sold once a few years ago, and another of a chalet looking house in Country Club Estates that closed for $493k. No further comment is necessary as both home sales made sense.
There are loads of entry level lake access homes pending sale, those in Country Club Estates and Cedar Point Park, and others. This market is understandably active, as buyers seek to capitalize on low interest rates. This capitalizing on low interest rates has been going on for several years now, and while there’s no way to really know when this zero (no) interest rate environment will go away, it’s safe to say we’re closer to its extinction now than we were a month ago. If you’re going to borrow money to pursue vacation home bliss, I’d encourage you to do so sooner rather than later. Price sensitive buyers (should be everyone, by the way) are also interest rate sensitive, which is why if forced to make a decision now I’d admittedly rather overpay by a percentage point or two rather than sign on to a 30 year note and at a rate that’s a percentage or two higher. That’s just math, and it isn’t all that fuzzy.
The other pending homes feature a handful in the six hundreds, those of homes with boatslips, and then two other properties that deserve a bit of commentary. One pending sale is in the Lake Geneva Club, and that’s a home that has been for sale for the entirety of my adult life. That’s not fair, as it only seems as though it’s been for sale for that long. This humble ranch, a ways from the lake but not too far, has been listed at many different prices. It’s also been under contract a few times, or at least once. At $529k it offers a basic house in a basic location with a boatslip. That should be enough for the market, and finally it is. That property is pending, making it the only sale pending in the Lake Geneva Club. Long a favorite association of mine, the LGC has had a bit of a difficult time over recent years. There have been some sales, sure, but there has also been inventory that has gone completely and thoroughly stale. The Lake Geneva Club is a wonderful place, but with some slips being in poor locations it’s very important to be aware of slip location and water depth when contemplating the purchase of a home that includes a slip.
Speaking of bad slips, there’s a new listing or two in Shore Haven, as that association has rather elevated inventory at the moment as well. Even so, I like a few of those homes and expect them to sell as we head into the prime selling season. The other home that is of some interest to me is in Geneva Oaks. The home sold as an REO a year or so ago, and after some renovation it came back to market at $1.295MM. There’s a shared pier, which at this price range is okay. There’s also a lake view, so long as the house in front on the water decides to always remain a ranch. This flip will likely yield a decent return for the investor, as Lake Geneva buyers reinforce their very firm, principled stance. That house has shiny appliances and countertops and some flat screen televisions mounted at varying heights in several rooms? SOLD.