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Lake Geneva’s Winterfest

Lake Geneva’s Winterfest

I admit when it comes to events that I lack enthusiasm when compared to some of my enthusiastic competitors. Chili Cook Off Dinner This Friday Night! I can’t bring myself to care about that. Elkhorn Rotary Club 23rd Annual Pot Luck Dinner This Sunday!  That means nothing to me.  I can’t even feign interest or enthusiasm or concern.  That’s part of what makes this blog somewhat difficult at times. I don’t really want to write about things I don’t care about just for the sake of being an involved member of this community. That’s because the community, as I see it, is different from the way it looks on Facebook, because that’s a particular lens that I don’t own. Not everything is fun, not everything is interesting, and not everything is something you should attend.  SUNDAY SUNDAY SUNDAY MOVIE NIGHT AT SHOWBOAT IS “JUMANJI”!!!!

It’s because of this that I have shied away from telling you about every little goings on in this market. I don’t really tell you about things in the way that I used to, because it seems insincere to me if I tell you to do something that I don’t want to do myself.  Do you care that this Sunday you can go to Pier 290 and watch the Super Bowl? Neither do I, because I can watch that game at home and since I write this to my Illinois clients I’m guessing that very few of you (none) want to stay at Pier 290 until late Sunday night when you likely have to work on Monday morning. So I’m not going to tell you to watch the Super Bowl there, because I don’t really need the content and I’m aware that such an invitation is likely to be ignored anyway. That said, there is something worthwhile this weekend.

Lake Geneva’s Winterfest is this weekend, and it’s important not because of what it is, but because of what it represents. Yes, there will be snow sculpting on display and those displays are worthy of your attention. The competitors are skilled and they slave away to create something that is only valued until it melts, which, according to our forecast, should be sometime around Tuesday of next week. This work is akin to a famous chef making the best of meals, the fanciest of meals, the most expensive of meals, and you’re lucky enough to score an invite to the dinner table. But like a fine meal that won’t hold up well to microwave re-heating, the snow sculptures are best enjoyed fresh, before the dolphin’s nose melts and renders the once vibrant animal a lowly manatee.

The sculptures are one thing, perhaps the main thing, but there’s the ice bar at the Baker House, helicopter rides for those uncertain they care about making it to Monday, and other fun things as well. There’s a scene here, and it matters because the scene plays out during the first week in February. We all know what the scene looks like in July, because it’s a summer scene that has likely been seared, pleasantly, into each of our minds. That scene is so very lovely. But this is a winter scene, and it matters because Lake Geneva isn’t just a place for summer. It’s a place that thrives in all seasons, in the spring and summer and in the fall, yes, but also in the dead of winter. The scene is alive, this town in action, never taking time off, always here, open, ready.

And that’s why it matters. Many resort towns, especially in the Midwest, fail at one season or another. The Northwoods will gladly allow you to be mosquito bitten in the summer and frostbitten in the winter. This is what the Northwoods does.  Door County will sell you ice-cream in the summer and show you their roof-goats with great pleasure. But in the winter Door County is closed, the lights dimmed, the scene on hold until June. Michigan, well, I’m not sure about Michigan in the winter because I visited Harbor Country once in late June and their season hadn’t yet started, so I cannot be certain exactly how terrible that place might be in February. But Lake Geneva is the same in summer as it is in the winter, it’s thriving, it’s bright, and it’s ready for you.

This weekend, come up for a visit. Walk the downtown. Take pictures next to the snow dolphins. Have a drink in an ice bar. And then come over and visit me at N1561 East Lakeside Lane in the South Shore Club. I’ll be holding that new listing open from 1-4 pm on Saturday, and it would be a shame for me to have to sit there all by my lonesome. See you at the lake this weekend,  when the scene will be on full display even while our Midwestern “competitors” hibernate.

 

Photo courtesy Lake Geneva Country Meats
New South Shore Club Listing

New South Shore Club Listing

There was nothing like it in 2002 just as there is nothing like it in 2017. A lakefront community engineered to attract high end buyers, in a high end setting, on this, our high end lake. It was a fresh take on lakefront living, combining the traditional layout of the Congress Club, albeit on a much more impressive scale, with the sheer size and quality of a true lakefront estate. The South Shore Club might have been a bit before its time in 2002, but by 2013 its time had come. The market saw this development and recognized just how special it was. Buyers who might otherwise buy a $3MM piece of dirt on Geneva were instead inclined towards buying a $3MM house with all of these rich amenities and so much style. Today, a blast from this short-term past.

The Original Vacation House, or so it was then called, was built by Orren Pickell to encompass all of the best that the South Shore Club could muster. The lot was special, set into the woods on that East side, but still prominent and capable of delivering a unique lake view. The style was lighter, brighter, more intricate, more involved, and as time wore on there was one house that kept looking new and ideal. It was this house, the Vacation House, the house that had all of the toys and all of the upgrades. The house was sold originally as a spec home, and enjoyed from that day until this day by the current owner. Alas, the property has run its course and the family has decided the time to move on has arrived. Today, I offer you the Original Vacation House, as wonderful now as it ever was then.

But it’s better now than it was then. The market has enjoyed consistent sales over the last five years, and so the faith that the initial buyer displayed way back in 2002 is no longer required of a new buyer. It’s just a beautiful house and fits the market, and it fits the style and it’s ready to be sold. The home has been lovingly maintained, and as the construction on either side of it is complete, there will be no disruption to the new buyer’s summer caused by backhoes or nail guns. The finishes as what you’d expect, with Wood-Mode cabinetry, Sub-Zero and Wolf kitchen appliances, Rohl fixtures, Lutron whole-house control, and more. The South Shore Club is complete, it’s functioning as it was intended, and it offers a lakefront buyer a luxurious retreat at a fraction of what such a home would cost on private frontage.

That’s really what the South Shore Club is about, by the way. It’s not about an association home with association home amenities. These homes were built and the association was designed to stack up against private frontage competition. If you have $3.275MM to spend on a lake house, you cannot buy anything of any reasonable scale or quality possessing a good amount of private frontage for that number. To put it another way, this new listing in the low $3s, if given a 1.5 acre lot and 100′ worth of frontage, would easily sell in the $5.5-6MM range today. You’re not paying lakefront prices for a South Shore Club home, you’re paying a discount to that cost and you’re achieving a much easier vacation home experience.

What’s easier? Well, all of it. Boats are included, no need to buy, maintain, and depreciate your own. The pool is there, included, a lifeguard as well. The tennis is there, ready, green with clay and ready for you. The lawns are maintained, the snow is plowed, and in the winter, if we have a winter with some normalcy, there’s an ice rink, too. The South Shore Club doesn’t just give you a lakefront experience, it gives you that experience at a discount, and it allows you, the owner, a much more convenient and leisurely weekend experience.

For today, consider this new offering. It’s wonderful and it’s available and I’m ready to show it this weekend. If you or anyone you know might be interested, please do let me know. Sometimes I list homes that I know require a tremendous amount of creativity to sell. Other times, I list a home that I know will make my job considerably easier and just sell itself.

Entry Level Geneva Lakefront

Entry Level Geneva Lakefront

My body is slowly succumbing to the course of time, to the insistent, constant force that seeks to whittle and pry and break and bruise, to the inevitable process wherein these ashes will find their way back to ashes. It’s sad, really, at such a tender age to be falling apart. I didn’t intend for it to be like this, but this is my first time in this aging process, and I’m no longer in control. I’m just a guy with creaks and cracks, and while others put up a most impressive facade, I’m nothing, really. I feel this way mostly because of my trip last week, a trip that started fine, included some wonderful skiing and the smiling faces of my children, and ended with my ear pressure being locked somewhere around the Vail Summit.

After driving deep into the far away horizon where the Denver International Airport hides, my ear pressure was the same.  Likely comfortable around 10,000 feet, but now I was at 5,000 and the pressure of those 5,000 feet was constant and unavoidable, ringing and pounding and bullying my inner ear. The flight would cure this, I figured.  When I landed at Milwaukee it was obvious then that my previous attempts to calm my worry were in vain. The pressure built,  my right ear finding some form of normalcy at 900 feet, but my left ear still stuck in the mountains. Certainly it wouldn’t last the night, but last it did. And the next day it would subside, obviously. But it didn’t. For sure the following day things would be fine and my 10,000 foot ear would slowly slip down to 900 feet. No. Such. Luck.

And so I write this morning, contemplating who might be my Gaugiun, but also contemplating the state of the entry level lakefront market on Geneva Lake. That market is one that I’d like to call our most interesting, our most confusing, our most obvious. But none of that is true, because all lakefront segments are that way, they are at once easy to understand and overtly complicated. They are nothing at all but everything, easy to dissect and explain until they aren’t. The entry level market, however, has some unique intracacies that are on display today. Notably, is there a top for this particular market?  Is the land worth what the land is worth and then the house might be worth whatever lofty price someone, someday, assigns to it?

Let’s consider a few things first. Not all entry level properties are created equal. A 50′ lakefront lot in Cedar Point Park that might be 300′ deep is not the same as a 50′ lot in the Lake Geneva Highlands that might only be 180′ deep. I could sell a 50′ lot in Cedar Point right now for more than I could sell a 50′ lot in the Highlands. That’s not anything but the obvious and simple truth. That’s because Cedar Point has proven the ability to sell re-built (whether remodeled or new construction) homes far above the cost of the dirt and the Highlands has not. In fact, fantastically improved homes in the Highlands rarely sell in excess of $1.5MM.

Another example of this is on Walworth Avenue in Williams Bay. This street is a nice enough street, with some condominiums and some entry level lakefront homes with very deep lots. Yet for all that depth, the market there has always struggled to sell anything over $1.5MM. In fact, a 100′ lakefront lot sold there for $1.2MM a few years back, at a time when a 50′ lot in the Highlands would have sold for similar dollars. If Walworth Avenue offered you a $1.2MM lakefront house you might think you’ve found something rare and incredible, when in fact, you’ve found something at nearly the top end of that individual market. Why is that the top end? Because you really can’t buy a tear down or supreme fixer upper on Walworth Avenue for $1.2MM and expect you have any margin in your all-in investment.

The same theory applies to most locations on the lake, excepting Glenwood Springs. In Glenwood Springs, the lakefront homes aren’t even true lakefront homes, yet an entry level home will sell for $1.2-$1.5MM and then the buyer may indeed tear it down. Does this make any sense? Well, actually, yes. Homes in Glenwood Springs have sold in excess of $2.5MM, and such a sale is not an anomaly. At the same time, a 50′ lakefront lot in the Highlands or on Walworth Avenue with actual, real, private frontage, would struggle mightily to achieve even $2MM, let alone $2.5MM.

As I was showing lakefront homes yesterday I thought about this market. I thought about the top end. I thought about where these prices might be able to go. And then I realized there’s likely a disconnect between what I think is reasonable and what a few individual buyers might think is reasonable. If I’m buying a tear down in a market that I believe to be capped in the mid $1s, I know that I’d want to have some margin for my effort. I don’t want to spend $1.5MM and a year of my life stressing out over a project that in the end will perhaps be worth $1.5MM. I want to spend $1.3MM to get to the finish line where a $200k equity bonus might be awaiting me. But perhaps that’s just me. And perhaps that’s just this 10,000 foot ear talking.

 

Summery Things

Summery Things

I’m out of the office for a few days this week on a short family vacation.  In my absence, focus on summery things, like this video from July.  As you know, this house sold for full price in September.  Another summery video will follow on Wednesday, and I’ll be back live on Friday. If you need anything from me before then, please reach out to me via email or cell 262-745-1993.

 

 

Summer Homes For City People 2017

Summer Homes For City People 2017

January bothers me. It’s a month of clean starts, of new pledges and attempted changes. It’s a month where things seem possible, sure. But it’s also a month where the pressure to perform is the greatest. If the year recently ended was a bad year, January is a terrific thing. We can wipe the slate clean, start over, act like this year will be different, better, clean. But if the year recently ended was a great year, January just feels like anxiety. It feels like a month where things must start fresh, even though we don’t want them to.  January is a busy month for me, and as I plot and plan I have another problem that starts in January. January is magazine month.

Summer Homes For City People should be credited with at least one award. The award should be titled “The Magazine That Made The Other Lake Geneva Magazines Try Harder”. The trophy is large, to fit all the text. In 2010, the world of Lake Geneva real estate magazines was one where the magazine was printed with thumbnail sized images of each home that the company had for sale. Headers like “Lakefront” and “Vacant Land” jazzed up the content. The magazines were boring. Then Summer Homes For City People was printed and everyone else decided that content was more important. Other Magazines, you’re welcome.

But this magazine thing isn’t easy, and I don’t enjoy it. It’s a grind, a chore, a labor of love, sure, but mostly of dread. I dread the inevitable errors that will make it through multiple proofs and into print. Did you notice the binding of the last issue? I did. It said SUMMER 2015. Strange, because that’s what the SUMMER 2015 issue said, too, except this was on the SUMMER 2016 issue. I printed the address of a large lakefront listing wrong. I printed the address wrong. I must have read the address more than 100 times before print, but I only noticed the error once there were  15,000 copies of that error in the spare room at my office. The magazine is difficult, but important.

It’s important because it showcases the best of Lake Geneva. I sell ads to make the money work, but the ads aren’t open to just anyone. In fact, every year I turn down would be advertisers because their product or service doesn’t align with lakefront market. The magazine features some of the finest properties to ever come to market here, and I’m proud of that. And yes, each year the magazine features some nonsensical writings of mine that many readers say are “too wordy”.  Too wordy, indeed.

But this year will be different and better but also the same. That’s why I need inventory, and I need it soon. If you’re a lakefront owner and you’re thinking of selling this year, please let me know. I want to work for you. I want to showcase your lakefront home. I want to write nice things about it and make you proud to own it, and then secretly sad when I sell it. I want to work for you, and if you want your home in the 2017 issue of Summer Homes For City People, we really need to start talking about this soon. The magazine is underway, and I don’t want to run out of room before I gush all over your property.

If you’re a business owner with a high end product or service, perhaps a magazine ad should be discussed.  Chicago companies with high end products would do well to contact me, as there’s no better way to put that product in front of the affluent Lake Geneva set than through a simple ad in my publication.  If you operate a bowling alley in Niles, please don’t ask me to place an ad. But if you own a high end something-or-other in a similar market, I’m all ears. For now, please excuse me, as I have some ads to sell.

 

Above, the magazine cover by Neal Aspinall from the 2016 issue.
Gray Again

Gray Again

What, exactly, are we supposed to do with this?  We wake to the dim light, not because it beckons us but because we must, we sleep with the pitter and the patter of ice and water against our window sills.  We slip over the day, uncertain if the next step will be slushed or wet or frozen, and we return to our homes in the fog of evening, waiting until we can sleep and repeat the day again. Is it Wednesday or Tuesday? It doesn’t matter. Not now, anyway.

I hurt my back the other day doing nothing in particular. It hurts today and it hurt yesterday, and without something changing it’s going to hurt tomorrow. But I’m used to it, like I’m used to this suffocating gray, like I’m used to the days blending and the night coming early. I’m used to all of this, and none of it bothers me anymore. There is nothing important to do today, but there are important days to come, and it’s so easy to prepare under this gray. The gray days are important days because they want nothing from us. They urge us to do nothing. They don’t distract, they don’t consume, they don’t ask. They just are and they leave us alone.

But we need the prodding of a sunny day, and we expect to be rushed and to be hurried and when we are we complain that we have too much to do. There are too many places to be, too many people to see, too many bills to pay. Too much of this and too much of that, and we want to rest. We need to rest. Under the brightest sky we have things to do and those places to find, and when we wish we could just rest. We wish we could find our house in the early evening with nothing to do and no where to go, to build a kindling fire and watch it burn. To eat a slowly prepared meal slowly because there’s no where to rush to, nothing to hurry about, no where calling. We hurry and we race and we wish we could slow down until we can, and then we don’t.

I wish it would be colder and sunnier and I wish the snow would build and the ice would skim and the fishermen would auger and the sailers would affix blades to their boats. I wish these things would happen in this season, but today they won’t. Tomorrow, nothing. Later in the month something might happen, the ice might return, the snow might fall, the men might reel in their tiny fishing poles and boast to the passersby of their pile of flopping food. But none of that is happening today, because today we get to move more slowly. We get to make that fire and eat that dinner and watch that game. We get to do these things and we shouldn’t complain, because these gray days are a gift that expect nothing in return.

Geneva National 2016 Market Review

I write lots of things on this site. I write about birds and trees and lakes and streams. I write about how much I like certain things, like trout and fish, but mostly trout. I write about how much I love this place, how this place is better than the other places, how the more places I visit the more I like where I’m from. But I also write about things I hate, like Michigan and Northwoods houses and Door County and Michigan. I write plenty that might cause  some to feel triggered. But of all the topics, of all the good and the bad, the love and the hate, I get more commentary directed at me when I write about Geneva National. Geneva National, you’re up.

2016 was a good year to be both buyer and seller in Geneva National. Sellers found buyers and buyers found value. Mostly, it was a good thing and a good year for this large association on the North side of Highway 50.  Last year, 71 homes and condominiums sold in Geneva National priced from $59k for a one bedroom condo to $795k for a large single family home. Six single family homes and condo units closed for more than $500k.   This morning there are just 61 total homes and condominiums available in GN, with five more pending sale. That’s really quite positive for GN, as the one thing that plagues this association more than anything is excess inventory.

The 2016 volume trailed well behind the 82 units sold (MLS) in GN during 2015, but both 2016 and 2015 absolutely crushed 2014, which recorded a rather miserable 44 total sales. If there’s any issue with the existing inventory in GN it’s that the top end is far too heavy. There are 20 homes and condominiums priced over $500k available today. If you recall the prior graph, there were only six $500k+ sales in GN all of last year. That means we have at least three years worth of inventory at the top end, and that’s not good news for any upper bracket seller wishing to leave GN.

Even worse is the vacant lot situation. There are, in case you haven’t noticed, loads and loads of unbuilt, vacant lots in Geneva National. Currently, there are 57 available, priced between $7k and $260k (there are a few others that are zoned commercial).  That’s a lot of lots, but don’t fear, because with TWO vacant lot sales in 2016, that means GN only has a scant 28 years worth of available inventory. Even if we average in the 2015 sales (11), there’s still nine years worth. The vacant lot situation at GN is especially troubling for owners who would like to be sellers, because the monthly fees keep coming even as the prices drop. I owned a few different lots in GN over the years, and I must admit I’m happy that I don’t own one at the moment.

The relationship between vacant, available lots and available single family homes is somewhat troubling, given that they are bound into the same market. Too many available single family homes drags on the prices, which leaves less and less motivation for a buyer to buy a vacant lot and build from scratch. If I can buy a nice house for less than I can build it, why would I build? But along those same lines, if the lots are free ($7k for starters), why wouldn’t I build when the cost of the land is essentially zero?  The good news for the GN housing stock is that construction prices are on the rise, perhaps up as much as 20% over the past few years by some accounts, so this might help deter buyers from building. The hope then is that they’ll buy an existing house instead.

2017 looks to be a decent year for GN, and for once the large association is going into a selling season without too much inventory. I’d expect a fair year, but as with the rest of the vacation home market, if the inventory doesn’t build then neither will the sales tallies.  Interest rates should be stable through the first part of the year, but buyers will feel some motivation as rates are higher than they were last fall by a reasonably meaningful margin. GN continues to have too many homes and too many lots and too many condominiums under development. The dues are higher than I’d like them to be. There are issues with all of these factors. But if you’re a buyer looking for newer square footage in a country club environment and you just so happen to like playing golf, then Geneva National just might be your best option.

Abbey Springs 2016 Market Review

Abbey Springs 2016 Market Review

There’s a common theme amongst these 2016 market reviews. Yes, the markets we’ve reviewed so far all preformed quite well in the year just ended. And, yes, each market is low on inventory to start 2017. But beyond that, we have a very similar ratio of performance to inventory in each and every one of the markets we’ve reviewed to date. Abbey Springs had a tremendous 2016, which is not something especially rare. Abbey Springs tends to have good years often, and if you’ll remember when the broad market stalled it seemed as though Abbey Springs kept churning forward.  Abbey Springs has a way about it, and that’s because it’s the only association of its kind in our market. Country Club amenities with resort features and actual frontage on Geneva Lake. It’s rare, it’s special, and the market knows it.

There were 40 (per MLS) sales in Abbey Springs during 2016.  Lest you think that’s somewhat normal, 2015 featured just 20 sales. That’s double the volume year over year.  In 2015 there were five sales over $500k, and in 2016 there were seven such sales. As we enter 2017, inventory is low, with just 19 active listings and one pending sale.  The top end inventory is a bit heavy, with nine homes over $450k available this morning.   Current inventory starts in the $150k range and runs all the way up to $1MM. It’s a unique association that can function and thrive with such a diverse grouping of condominiums and single family homes.

With 40 sales last year and just 19 homes available, those numbers mirror the lake access and the lakefront supply ratios. In all of these markets we have approximately six months of inventory. That’s a healthy ratio no matter the market, though I’d really prefer we have 8-10 months of inventory so that buyers can feel a bit better about their choices.  I think it’s a testament to our broad Lake Geneva vacation home market that we can have such solid activity across all price ranges and all ownership types. Why did Abbey Springs have such a dynamic 2016? Was it because of interest rates or inventory choices or all that summer sunshine? It’s likely due to all of that, but the simple truth of Abbey Springs is that it is without equal in our market and rare inventory will always find an audience.

Abbey Springs will follow the same path as the rest of our local markets. If inventory allows, sales should be solid. If inventory stays low, there’s no way we’ll have a repeat of 2016. That seems obvious, but most markets cannot push their volume totals higher just because inventory exists. It’s a healthy market that can effectively consume as much inventory as it is dosed. Next up, Geneva National, which won’t feel nearly as good about itself after Monday’s post.

Entry Level Vacation Condominium 2016 Market Update

Entry Level Vacation Condominium 2016 Market Update

That’s a clunky headline, to be certain. But clunky it must be, because there’s really no other way to describe this segment of our market. It isn’t Abbey Springs. It isn’t Geneva National (those two updates will be this coming Friday and then Monday). It’s just the secondary vacation home condominium markets that cater to the secondary homeowner. The sorts of folks who buy into these developments are those who seek a piece of this scene, but they wish to join for a fraction of the membership fee required by the other market segments.  When swimming in the lake on a hot July afternoon, there is no distinction between the lakefront owner who paid $5MM and the Abbey Hill condo owner who paid $200k.

I consider this market to include the following condo associations: Willabay Shores, Bayside Pointe, Abbey Villas, and Abbey Hill. There are other such condominiums, but these are the developments that I find most appealing for the vacation home buyer seeking to spend somewhere around $200k.  These are the associations that I would be considering if I were a buyer in that range. We know that 2016 was a year with incredibly low interest rates and a mostly stable (excepting the first 60 days of the year) stock market. Because of those conditions, this entry level condo market should have had a very solid 2016. And that’s exactly what happened.

Bayside Pointe is in Williams Bay. It’s nice, and it’s walking distance to the lake, and the units have small attached garages and there’s a swimming pool. You can also walk to Bell’s store, though I’ve never heard that written in a description as an amenity that carries any particular weight.  Five units sold here last year, with closings at $185k on the low end and $260k on the high end.  There wasn’t a single sale in this complex for 2015 (per MLS), and as of today there is just one active ($184,900). While I generally find myself concerned about inventory at the higher ends of our market, the best possible scenario for current owners in these sorts of associations is to see very little inventory.  These markets exist in a vacuum of sorts, as sales at Bayside Pointe really only matter to Bayside Pointe, just as Willabay sales only matter to Willabay. There is little crossover here.  The inventory is now low, which is difficult for buyers but fantastic for current owners.

Willabay Shores is just down the road, closer to the lake. It’s walking distance to the water, and it’s walking distance to the little stream that pushes through the Williams Bay beach where I first discovered Snapping Turtles. Willabay sold 11 units in 2016, nearly double the 2015 production of six. Currently, there are just three active units per the MLS, which again, creates a fantastic climate for current owners. In all, a remarkable 2016 for Willabay. Prices ranged from $130k to $217k, which is the typical range here, though some units with slight lake views can push upwards of $275k.

In Fontana, Abbey Hill has long been one of my favorites. It lacks the proximity to the lake that these other developments can claim, but the architecture is unique and I find it to be rather engaging. There were two sales in 2016, down from four total in 2015. But this isn’t a problem, it’s just a function of lower inventory. Currently, not a single Abbey Hill unit is offered for sale on our MLS. Again, that’s not wonderful news for buyers looking to consider Abbey Hill,  but it is the perfect climate for existing owners to discover some appreciation.  Don’t forget about Abbey Hill- if you’re a buyer in the $200k range seeking some sort of Lake Geneva vacation home, you should be asking me about Abbey Hill.

If you like Fontana but need to be closer to the scene, then the Abbey Villas are for you. The development doesn’t allow dogs, so that’s tough on some people, but the development is close to the beach and you can walk to your morning coffee, and that’s something.  10 units sold here in 2016, with closings occurring from $165k to $255k. No harbor front units sold in 2016. The 2015 volume stalled at six total sales, so 2016 is a win no matter how you look at it. Today, the inventory is following the same pattern as our other market participants, with just two units available in the MLS, and one more pending.  The Abbey has the highest association dues of any of these properties, so that’s something to consider if you’re looking to vacation on a relative budget.

Vicki Hansen is my assistant who handles all of these associations for me, and if you’re a buyer or a seller, there’s no better choice for representation.  Buyers tend to shy away from Lake Geneva if they find their budget doesn’t match up with our lofty lakefront prices, but those who wish to find themselves part of our scene for $200k or so would do well to discover these four associations. Expect 2017 to be a solid year, but as with our current prediction theme, if inventory doesn’t build then we’ll see more appreciation this year, and less overall volume.

 

Image courtesy Matt Mason Photography, a Lake Geneva wedding photographer. 
Geneva Lake Access 2016 Market Review

Geneva Lake Access 2016 Market Review

The most economical lakefront home to sell in 2016 was an odd little house in Knollwood. $1,075,000 was the required minimum price for 50′ of frontage on Geneva Lake. Farther up the road in Knollwood, the most economical lake access home of 2016 sold for $69,000. Those two entry points won’t let us assume that Knollwood is a lower end association, because that’s not at all the case. Knollwood is a beautiful association that boasts what I believe to be the nicest large association lakefront park on this entire lake. But in 2016 if you were looking to eek onto the lake, Knollwood was in focus, and if you wanted to eek into the lake access market, you had no choice but to keep your eyes on Knollwood.  This post isn’t about Knollwood.

The lake access market had a solid 2016, though in comparison the lakefront market itself fared much better. In total, there were 77 lake access homes sold in the MLS, the most economical being the $69k Knollwood cottage, the most expensive being my off-water estate in Loramoor with 3 acres, pool, slip, large house, detached garage with studio, water feature, gated entry, etc and etc, at $1.625MM.   The lowest price paid for a home with transferrable slip was in Wooddale, that of a brick Arlington Heights-esque ranch that sold in August for $330k. The highest price someone paid for a lake access home  home without a slip was $800k in Geneva Manor. In total, 12 homes with slips or private piers sold last year. I sold four of those.  A few more with available ramps or buoys sold.   2015 recorded 68 lake access sales, so by any measure our 2016 was a fantastic year.

Of the 77 sales, five closed at $1MM or more.  In that upper bracket lake access market, some things were made obvious not because of what sold, but because of what didn’t. This year offered ample, rare inventory in that segment, with homes available in Glen Fern, Black Point, The Lindens, and Academy Estates. These homes lasted through 2016 and closed the year unsold, or expired. The inventory in these associations was in the low million range, and the availability of these homes was something that the market wouldn’t typically take for granted. A home one off the lake in the Lindens would be desirable, no matter the condition. Yet the market pushed back and these homes failed to sell. What is the takeaway from this? Well, for starters, if buyers are going off-lake in the million and over range they’re expecting something pretty special. Like the Loramoor property, with a slip and a pool and big lot and big, newer house. Or something unique like my immaculate, gem box on Oakwood that I sold in Glenwood Springs for $1.1MM. Give the buyer something unique and rare and they’ll buy it. Give them a $1.3MM fixer upper built in the 1970s and they’re going to take a pass, unless the lot is somehow so incredible that a tear down is warranted.

That 2016 sold inventory included two entry level cottages in our lakefront cooperatives. A small home in the Harvard Club sold for $510,500 and a cottage in Belvedere Park sold for $411k. The Harvard Club had a slip, but Belvedere Park has all-year municipal water and sewer service, so you can pick which one you’d rather have. Nothing sold in the Congress Club, though inventory existed there for most of the year.  Foreclosures were not common in 2016, but at least two homes did sell as REO,  though both were crappy and smaller and sub-$150k.  I don’t suspect foreclosure to play any sort of starring role in 2017 either.  Of note, 25 of the 77 sales were marked as Cash closings, which I find a bit surprising. Rates were remarkably low during 2016, and I would have expected more buyers in this range to take advantage of those rates. Instead, 1/3 opted to pay cash, which proves the strong position of many Lake Geneva buyers.

For 2017, we’re low on inventory. There are just 36 lake access homes available as of this morning. That’s a low tally, especially when you consider that seven of those are priced in excess of $1MM. Our core lake access market is the $450-750k home with a slip, and of those there are just three available.  Because of this inventory condition, the lake access market will follow the lakefront market for 2017 and find itself heavily dependent on adding quality inventory. If we can add inventory in the first quarter, we’ll have a solid year. Interest rates are rising but they aren’t rising enough to squelch the desire of city families to spend their weekends in a different state of being. Expect the lake access market to have a quality 2017, but volume will not reach 2016 levels. Much of the remaining inventory is now aged, so there is plenty of value lurking in the available homes. If you’re hunting for value, I’m happy to be your guide.

 

Geneva Lakefront 2016 Market Review

Geneva Lakefront 2016 Market Review

29. It might sound like a lot, or it might sound like nothing at all. If we have 29 quarters, we don’t really even have enough money to buy a lunch at Culver’s. But then again, I’m currently battling towards the world’s most amazing physical transformation, and so I’m unable to go to Culver’s. This is difficult. If we have 29 electoral college votes, we still have nothing. But if we have 29 cars, we’d be considered to be a collector, because who, if not a collector, has so many? If we have 29 children, we’d have lots of children and we’d have a television show. But if we have 29 cousins, no one would really care. A show called “29 Cousins” wouldn’t really raise an eyebrow. But we don’t have 29 of any of those things, we have 29 lakefront sales on Geneva Lake in 2016 and we should all be very proud of that total.

Those 29 sales (that link won’t include the vacant land sales) represent a slight decrease from the remarkable 2015 tally of 31, but the reality is that both years represent about as much volume as this market can potentially muster. The 29 sales from 2016 included one home in the South Shore Club ($2.75MM), and three vacant lots. For the purposes of this morning, we’ll include the vacant lots as we average out the increasingly antiquated Price Per Foot metric. I dislike this method of valuing properties, but that’s only because I feel it fails to properly account for the compression that exists when frontage increases beyond 100 feet. The results are skewed by a larger number of entry level sales as those properties with 50 or so feel tend to sell $25-30k per front foot, while 100′ lots with barebones homes tend to sell around $20k per foot. Even so, let’s consider the PPF.

In total, 2919 feet of lakefront sold this year. That’s roughly 2.5% of the entire frontage on Geneva Lake. That’s no small number. We sold a total of 2713 feet of frontage in 2015.  During 2016, we sold $72,372,000 worth of lakefront proper, bringing our price per foot to a whopping $27,193, or an 8% increase over the 2015 average of $25,161. That number is high, but it’s not reflective of the actual value of a foot of raw frontage. The number is bloated this year for two reasons. First off, we sold seven lakefronts under $1.55MM, and those entry level properties tend to sell at a higher PPF. Secondly, we sold four properties over $4.25MM this year, and those four properties alone averaged $40,298 per front foot. They averaged this lofty number because three of those four were fantastically beautiful homes that carried a premium for their quality.  If you were to ask me for the value of a 100′ lot of reasonable size, I’d point you to the two sales on Lackey that prove out a value closer to $20k per foot than $27k per foot.

Of the 29 sales, I closed 10 of them. To put it a different way, of the $73,172,000 worth of lakefront that changed hands this year, I was directly involved in nearly 50% of that volume. I bring that up as I see some other agents’ advertising and it seems as though there’s still some confusion as to who leads the lakefront market. Anyway, the simple reality of 2016 is that it was a complete and utter success for the lakefront market. Most notable in the volume is the activity at the very top end of our market. The two sales, both my listings, that closed for $9.950MM and $7.35MM, proved that we have strength in our upper bracket, but it also proved that in order to find those buyers the product must match an incredible home on an estate sized parcel of land.

I also found the existence of entry level inventory to be curious. After several years of strong sales in this segment, we printed another six sales under $1.55MM. The lake proves that just as soon as we think we’re going to run out of a particular type of inventory, we don’t. When we think the last 100′ lot with a junky house has been sold, we see more 100′ lots with junky houses come to market. When we think the last 50′ lot for $1.25MM has sold, we sell another 50′ lot for $1.25MM. The market has a way of letting people catch up to it, so long as the buyers are patient and wait for the inventory that matches their desire. 2016 was a terrific year, but it wasn’t necessarily unexpected. I thought the year would be solid as long as inventory presented, and that’s exactly what happened.

For 2017, we’re facing higher interest rates and severely limited inventory. The rates should have some negative drag, but gains or stability in the stock market will offset that. Inventory will be the problem of 2017, as we start the year with just 13 true lakefront homes for sale. Of those, I have an offer being negotiated on one of them.  The result of this low inventory will be higher priced listings, as sellers who don’t really care to sell will likely price their homes at prices that reflect their lack of motivation. This could be a problem for 2017, but I’m guessing we’ll add enough inventory to see volume totals in a  reasonable range once this year ends. Will we sell 28 lakefronts again? Not likely. But can we get to 20?  You bet. The key in this market is for buyers to understand that even though prices have escalated, there is still value to be found. Much of the inventory that remains is now aged and buyers may have the ability to negotiate sold value. That is, assuming, they’re working with the right agent, and if you’ve just finished reading this, then you already know who that is.

Geneva Lakefront Condominium 2016 Review

Geneva Lakefront Condominium 2016 Review

Over the course of the next few weeks we’ll discuss how 2016 treated the various segments of our vacation home market.  We know the year to have been a good one for these markets, but we’ll avoid the vagaries and dig into the details.  If you wanted vagaries, you could just visit the Facebook page of your favorite Realtor, assuming that I’m not your favorite Realtor, and if not, when what have I done to deserve such a low level of favor?   The markets we’ll cover will include the following segments:  Lakefront Condo, Lakefront Single Family, Lake Access Single Family, Geneva National, Abbey Springs, and the secondary condo markets comprised of Willabay Shores, Bayside Pointe, Abbey Hill and the Abbey Villas. Let’s get started.

The lakefront condo market has been covered in depth here. Unfortunately, even as I grasp the other markets with remarkable clarity, I have been routinely dumbfounded by the behavior of the lakefront condo market. I don’t know, exactly, why the market has stalled even while the adjacent markets have excelled.  I’ve speculated that perhaps it’s due to a shift in demographics. Younger buyers, more city buyers, those who don’t want to come to the lake to share a hallway.  Even today, eight years after the start of the last housing crisis, I’m not entirely sure why this market has failed to find favor.  With 2016 now closed out, it’s clear to me that the lakefront market has remained an enigma, and the market remains stalled.

Perhaps it’s inventory that creates the problem. After all, if nice things come to market they generally sell, whether they’re condominium or single family in nature.  I sold a beautiful condo at Eastbank for $1.2MM in 2015, but that condo was recently renovated and  absolutely, entirely turn key.  So is it purely a condition of the condition? If a unit is beautiful will it sell?  Does this buyer pool just detest the thought of renovating a confined space?  If we look to the 2016 condo sales, maybe there’s a clue.

In total, the lakefront condo market closed 8 units. That’s not terrific, but it’s not the worst thing, either. A unit at Vista Del Lago sold for $362,500. That’s troubling for Vista, as the development offered several nice units throughout 2016 and yet the only sale was in January of 2016, meaning that likely wasn’t even a 2016 contract, rather a carryover from 2015.  Geneva Towers had one sale at $644,500, a fine number for a reasonably decent condo there. Somerset, a small condo association just south of downtown Lake Geneva had two sales last year, one of a short sale for $725k (though I’m assuming the buyer had additional costs associated due to the way the MLS details are written), and another unit for $1,085,000. That was an upgraded unit, and any buyer considering entry level frontage would do well to consider available inventory at Somerset and at Eastbank.

Working West, Williams Bay had two lakefront condo sales, both at Bay Colony. One of a wonderfully renovated unit, one of a unit with more basic, older finishes. The upgraded unit had sold for $600k back in 2005 when it was in original condition. That buyer then renovated the unit and sold it, after years on market, for $510k in early 2015. That same unit sold for $525k in the fall of 2016 and that, in a nutshell, is the situation with most condos on Geneva Lake. Even in terrific condition they aren’t able to sell for their 2005 valuations. The other unit in that building sold for $415k to a buyer represented by yours truly.

In 2002 I sold a three bedroom condo in Fontana Shores for $427k. That was, at the time, a nice sale for the building and a nice sale for me. That same unit just sold in 2016 for $421,750.  The last owner kept that condo for 14 years and lost money on it. During the same period, a private lakefront home may have appreciated by as much as 50-75%. Lastly, my sale at Stone Manor. At $5,995,000, it was the most expensive condo sale in our market, and likely the most expensive condo sale in Wisconsin, ever. But it’s less condo and more residence, so I won’t dwell on it here. You know it sold. I know it sold. And that sale has no effect on the remainder of the non-Stone Manor condo market here.

12 months, 8 sales.  2015 fared only slightly better, with 9 prints for that year.  There were 11 sales in 2014. But none of this particularly matters. The take away is that the market remains in a difficult way, and I don’t see any catalyst that will change that. If entry level lakefront prices rise, and that entry level inventory remains low, then perhaps the condo market will benefit.  But what I think we’re seeing is a shift away from the condo model and towards single family, and the only thing that might interrupt that shift is rare value or rare inventory.   2016 should be a solid year for the lakefront condo market, but in this context I think sold would mean 7 or 8 sales in total. To expect more would be to expect a change from the status quo, and the condo market hasn’t proven it’s capable of anything but.

Happy New Year

Happy New Year

I hate Luke Bryan. First of all, he has two first names.  A better name would have been Luke Bryant. Like Kris Bryant, without the ring and with the T.  I hate him because he sings ridiculous songs, songs that I cannot name and songs that I cannot hum. Bro-Country songs. I don’t know any of his songs. He throws his voice when he sings, like he’s trying to be someone else, like he’s trying to sing anonymously.  He’s a country Elvis, which is not to take any shots at the real Elvis who also sang a bit of country. I hate him because of his name and because of his voice but mostly because I don’t like the way his album cover looks whenever when of his songs cycles into my Pandora. I can’t Thumbs Down fast enough. So there, I hate Luke Bryan for no real reason, but for all of the other ones. Ceasing pettiness was not one of my 2016 resolutions.

But Luke Bryan has a song on the radio where he tells us that 60 seconds felt more like 30, and that is something I can agree with. 2016 is over and it flew by.  This year, the year that was so hated by the media, so hated by Memes, so difficult for so many reasons, was a pretty good year to be Dave Curry in Lake Geneva. It wasn’t without difficulty and stress, and there’s a headache that I now get that doesn’t let go for a few days at a time, but on balance the year was a terrific year. For all of the celebrity deaths in 2016, every member of my immediate or extended family made it from the first day to this, nearly the last day.  Perhaps this was because the year passed so quickly, in record time, and because of that no one really found the time to die.

On the business side of 2016, it could not have been better.  A good year in real estate is wonderful, but it’s so fleeting it’s hard not to find some discouragement in the face of all the delight.  I started selling real estate in 1996 when I was just a kid.  While my friends went off to college, I just drove a half mile from home to a real estate office and sat there wondering what I should do. I was intimidated by the sound of a ringing phone.  Once I decided that on fall Sundays there would be women shopping at the store next to my office, and the men must be sitting in their cars impatiently waiting for their wives to buy something with Lake Geneva written on it or carved into it. I thought the men would be bored and might want to watch the Bear’s game. This was back when people wanted to watch the Bears play. So I found a half sheet of plywood and scratched “BEARS GAME ON INSIDE” onto it and faced it towards the road. I turned on the tube television and adjusted the rabbit ears to get the least snowy signal I could. No one ever came inside, and that was a terrible, awful idea.

From those days in 1996 until the end of 2009, I sold around $50MM in real estate. All the while I had a family and houses and mortgages and insurance payments and bills for ads in local newspapers that never worked.  That tally matters, because those were the years where I learned what to do and how to act. I learned what to say. I learned how to fail. I learned the market and the roads and the associations and the way the water looks in the morning as it laps against the rocky point where Fontana meets Williams Bay. Those were the years that mattered more than these years. I’m humbled to write it, and uncertain as to why it happened and sheepishly proud that it did:  My 2016 sales volume was in excess of $62MM. Over the last 12 months I sold more real estate than I did in my first 14 years.

I became so accustomed to working from behind, to thriving as underdog, to wishing for some success that I had no business expecting, that now I feel a bit awkward here. I hear the praise from people I know and from others I don’t, and I don’t know exactly what to make of it. $62MM, after all, is a Walworth County all-time record, and a number that leaves my nearest single agent competitor with less than half of that volume.  I was thrilled to represent either the buyer or seller in 10 of the 26 lakefront closings during 2016, and sold 5 of the 6 lakefronts that closed over $3.9MM.  Per MLS (1/1/16-12/30/16 Walworth County sales), my personal volume was more than the 37 agent @Properties office in Lake Geneva, nearly double the production of the entire Rauland office, roughly quadruple the production of the entire D’Aprile Fontana office, and more than any individual office in Walworth County excepting one. I kind of hate writing all that, but I spent fourteen years being told that the small office can’t be as effective as the large office, so I can’t really waste this opportunity.

Does this mean I’m somehow at the top of this game? Does this mean I have no where to go but down, to slowly fade away as someone who was once pretty good at something but no longer subscribed to the process that brought him there? It seems as though this could be the case, that I might indeed just stall here at this lofty height and realize I never learned to land. But the reality of it is I know this success has very little to do with me. I know I’ve been blessed. And I know that without clients and customers trusting me for their Lake Geneva decisions I would mean nothing to the Lake Geneva market.

So today I thank you for your loyalty. I thank you for reading this drivel. I thank you for recognizing that many days and weeks I have nothing really to write about, but I try to do it anyway. I thank you for trusting in a kid from Williams Bay, who never aspired to do very much but always wanted to matter. I thank you for helping my business grow. Where it goes from here I can’t say, but I know it’s a struggle to stay at the top of anything, no matter the profession and no matter the year. I’ll keep trying, I’ll keep working, and I’ll be here if you need anything. If I’m your agent already, a most sincere thank you. If I’m not your agent yet, this is me begging.

Here’s to us, to Lake Geneva, and to a new year with more time spent at the lake.

640 Linden Sells

640 Linden Sells

Earlier this year, I sold a house on Harvard Avenue in Glenwood Springs. It was a decent old house, but more old than decent. It was the sort of house that one family loved for generations, the old bathroom and tiny kitchen quaint reminders of a time long since passed. But new buyers lack the nostalgia that makes old carpeting and small kitchens seem desirable, and so the house lingered on the market for quite some time. Eventually, the house sold because the price succumbed to the market. I sold that charming old house with the small kitchen and  private pier for $535,000 in May.

Yesterday, I sold another old house with private pier on Harvard Avenue in Glenwood Springs. This address was on Linden but the house faced Harvard, and the lake, and so it was more Harvard than Linden no matter what the address rigidly insisted. The house had been lovingly embraced by the same family for generations, much like the other house.  This house had a high pedigree, original old floors, a huge fireplace in the great room, an ample and right screened porch. When I first toured that home with the owner, I saw that fireplace and I saw that porch and I knew that the home would sell.

I listed it for $899k in the fall, and then I told you about it and I told you it would sell. Yesterday, I sold the house for $871,250. The sale, nice for the market, nice for the seller, nice for the new buyer. It’s a nice house, and a terrifically rare example of a well kept vintage home. It was a house that I was proud to market, proud to show, proud to close. The buyer of the other Harvard house, the one I sold in May for $535k, well, he liked the price, too.

Glenwood Springs is a fun association, and for all of its cramped nature and congested lakefront, there’s a feeling that accompanies a summer visit to that old association. It’s a feeling that you can’t quite explain, one you can’t quite understand. It’s a feeling of something old, something trusted, something that feels unique and rare because it is. Glenwood Springs isn’t the only lake access association that evokes that feeling, but it’s one of the associations that accomplishes that with the least amount of effort. In that, a lake house in Glenwood Springs is something that we can all appreciate.

Merry Christmas

Merry Christmas

I heard a radio commercial this morning. “The Holidays are for making memories with friends and family”.  I believe the commercial was for AT&T, but I wasn’t really paying attention after I heard that initial statement. That’s because that statement that most would take as being acceptable and perhaps even warm, is objectively false.  I may have been the only person to hear that message and take offense to it, but that’s because I live in a world where we have plenty of opportunity to make memories with friends and family, and the Holidays isn’t one of them.

Am I supposed to fondly remember my grandfather stumbling into a support pole in my uncle’s basement? Ah, Christmas! Or do I need to remember my father falling asleep in his chair while reruns of A Christmas Story play on TNT? Or do I cast my memory back to sitting on my Grandma May’s green patterned carpet while watching the Bulls play the Lakers on Christmas Day? These are not the memories I will hold dear.

I’d rather remember my Grandpa Curry holding up a largemouth bass on the front lawn of my parent’s house. Smiling with his catch, holding the bass high for all to see, even though through this memory I now see that the bass was merely 14″ and was hardly a trophy at all, let alone a legal fish to keep and eat. I’d rather remember the rare occasion when my Grandma May would sit on the pier with her large sunglasses and marvel at the scenery. How different it was for her than the farm in Princeton, and how rare it was for me to see her in a place that was at once so familiar to me and unfamiliar to her.  That’s where I differ from the ad writers for AT&T. I don’t make memories on Christmas, I recount the memories that were made at the lake.

For now, a most Merry Christmas to you and your family. A Happy Hanukkah if that’s the applicable celebration. I’m supremely grateful that you read this gibberish as often as you do, and even more grateful to those buyers and sellers who trust me with their Lake Geneva real estate decisions. This weekend you can try to make memories with your friends and family, and if you don’t have a lake house, I suppose that’s really your only option. But if you have a lake house, then use this weekend to remember the fantastic times you had last summer, and anxiously anticipate the better lake times that are yet to come. I’ll be off Friday and Monday, back next Wednesday. Starting in January, I’ll recap each individual market segment with a year end review, so we both have that to look forward to. Have a wonderful weekend.

Eagles

Eagles

The Eagles don’t belong to us. They fly here, they fly around, and then they fly away. They don’t visit while we boat, and they don’t visit while we swim. They never get to see the green shore and the smallmouth when they crash through the surface feeding on Emerald Shiners. They never see the carp splash in the shallows while they spawn against the rocky shore. They miss the fields turning from green to gold, from gold to tan, from tan to gray. They miss the sweetcorn sending out their tassels, and they miss the harvest. The planting, missed, too.

The Eagles come with the cold, riding down from the north, from those lakes where they fish and those rivers that they watch. They fly in on the cold currents and they circle overhead for most of a season. They circle my office, they circle your house, they circle the water and they wait. They’re cold and they’re ruthless and it’s minus ten this morning and they don’t even care. They’re waiting for the ice and they’re hoping it hurries. They don’t want to stay here for long, though if they were more discerning they’d wait to see what the piers look like and what the boats do and how the sun rises and sets on a summer day.

But they won’t be here and they don’t care, because they’re here to eat and they’re not our friends. The Coots visit now, too, and like so many arctic birds that stop here for a spell, they stay longer than they probably should. We can’t blame them, these small running-on-water-birds, because they stay longer when they like a place. Just like us. And so the Coots stay and the lake freezes and the Coots huddle into tighter and tighter circles. It’s when they huddle and the Eagles know the timing is right, that they’ve finally found what they’ve been waiting for. That the ice has formed and the Coots have huddled and the air is cold and the piers are stacked, each on their lawn, waiting.

The Eagles see the birds and they see the ice and they know it’s time, and so they circle overhead and they dive down like fighter pilots on a strafing run and they eat and they eat. They rip the Coots from the water, one by one, plucking them off like me milling around the waiter with the chilled shrimp tray at a party where no one feels comfortable enough to eat too many. No one but me, and the Eagles. They grab a small arctic bird and fly to the nearest Oak, or Walnut, or Maple, and they rip it to pieces in a hurry. Then, once the feathers and the bones have fallen to the ground the Eagle goes again, circling and circling before diving. The feast will last as long as the Coots huddle in whatever open spot of water might be left.

It’s that time again, and the Eagles are here. The Coots came first, but the Eagles will be the last to leave. And then it’ll just be us, the sturdy ones who don’t mind the winter, the ones who know that after winter we’ll get to put our piers back in and then everything will be alright.

Lackey Lane Sells

Lackey Lane Sells

At one point earlier this year, there were three homes for sale on Lackey Lane. Lackey, in case you haven’t the pleasure of wandering down that lane before, is a dead end street with a handful of homes on it to the west of the Birches. The street is unique in this market. It’s a dead end, which is always a positive here as it makes it more awkward for strangers to commit to a wandering, gawking drive.  The lakefront is level, the location on the lake creating a slight bay that keeps aggressive boaters at bay. There is little I don’t like about this street. Little not to celebrate. And that’s why there were three homes available earlier this year and as of today there are none, and I’ve sold them all.

First, the beautiful home at W3818 Lackey. I sold that home in June for $4.275MM, and what a home it was. The new owner is happy there, which makes me happy, and the street, though it possessed a history of selling in the threes, had a print in the low $4s that it needed. This print is important as it shows there is a path to value in that range, and the few tear downs that remain on the street now had an angle. Buy one for $2MM or less, build a new home for $2MM or so, and you’ll be secure in your value. This seems easy to do, but it’s not as easy on this lake as you might think.

Next, I sold the small brick ranch on 100 level front feet at W3846 for $1.91MM. Again, the value makes complete and utter sense, and not only when you consider that price per foot is just $19,000. The street can support built value, and if you’ll drive down that lane today you’ll see the foundation of a new build where the old Arlington Heights ranch had previously stood.  That was a nice sale, a  terrific value, and a new place on the lake for a long time Lake Geneva family.

Yesterday, I knocked over the last Lackey domino of 2016. W3852 Lackey closed for $1.925MM, to a delightful young family who saw what the prior family saw: opportunity to grab rare land at a very attractive price. The street now will do one of two things. It’ll either quiet down while the new owners make their mark in that dirt and along that shore, or it’ll see another offering or two as existing owners who may have an eye towards a someday sale see the value and demand that is obvious on their quiet little lane.

Coincidentally, two other lakefronts closed yesterday. One in the dead center of the Narrows, that of an older house with unremarkable attributes and a 100′ lakefront lot. That closed for $2.485MM. The other closing was in the same neighborhood as these others, but this home was immediately adjacent to a very busy boat launch. I can change out an old sink if I don’t like it. I can buy a new range if I want a shinier model. I can lay hardwood where there is now carpet. I can nail on shingles where there was vinyl. I can do lots of things to my new lakefront house, but something I can never, ever do is move a boat launch. $2.899MM was the print for a home with shiny finishes and a municipal launch for a neighbor. These sales bring the lakefront sold tally (MLS) to 25 for 2016, and I’m proud to say I’ve been involved on either the buy or sell side (or both) in 10 of those 25. That’s not bad for a kid from Williams Bay.

To the new owners on Lackey, a big congratulations. I’m never unaware of the reality of my business. I can sell lots of homes one year and very few the next. I could do this work for another decade and find success, or I could be cast aside as an insignificant blowhard who writes about Christmas trees and my grandmothers and pontoon boats. I understand that buyers and seller alike have myriad choices for representation in this market, and I’m always grateful to those customers and clients who choose me as their agent. I’d like to think I’m a bit more fun to work with, and I’d like to think I have better insight into the market (I’m actually certain of it, but humility), but mostly I’m just happy that my sale yesterday represented incredible and lasting value, and in that, I’m content.

Christmas Trees

Christmas Trees

In the 1980s, Christmas trees were not especially easy to find. They had trees at the wood boat shop on Highway 50, and then some more trees a ways down that same road, near the cemetery. But we couldn’t go there because those trees were too expensive. The trees were from the north, maybe Canada, and they were pricey. Thirty-five dollars or more.  When my friends would put their Christmas trees up just after Thanksgiving we were not always so fortunate.  The trees were too expensive then, my dad knew that. Why buy a tree when they’re in demand when the real deal only comes to those who wait out mostly all of the season?

And so often we’d wait, wait for the prices to fall. Wait until November 1st to carve a pumpkin, wait till Thanksgiving morning to buy that turkey, and wait until Christmas was nearly here to buy that tree. The tree sellers would know, after the fifteenth of December, that the regular folks who valued trees and tradition would have already chopped, hauled, and decorated their trees. After the fifteenth, the trees must be discounted, because when the clock strikes midnight on Christmas Eve, those thirty-five dollar trees are nothing but firewood. But worse, they’re the sort of firewood that you have to haul away before burning.

Some years, we’d get that tree early. Twenty dollars for the six footer from the Boy Scouts, but rarely from them because that was retail and retail wasn’t our thing. Mostly we’d wait, and we’d wait, and when it was nearly Christmas we’d go get that tree. A thirty-five dollar tree for fifteen, now that’s the way to make a Christmas cheery and bright. Some years, a twenty-fiver for free. My mother would decorate the tree and my father would put his expensive German train around the base of his nearly free tree,  and my brothers and I would feel the relief of a Christmas saved.

This year, I bought my tree where I have for the past three. The tree farm down the road from my North Walworth house. This year, I drove my Gator into the field, surveyed the live inventory,  selected the finest Frasier Fir I could find, and unceremoniously sawed it down. My son and I loaded the tree into the undersized Gator bed, and drove it down the road, the top of the tree brushing against the pavement, the base of the tree narrowly missing the streetside mailboxes. $105.50 for that fine specimen, and just a week after Thanksgiving.

Ready For Sale

Ready For Sale

I’d like to think, after twenty years in this chair, that I’ve seen it all. I’ve seen sellers and buyers of all makes and models, the good, the bad, and the ugly. I’ve seen outliers and trends, typical things and odd things. I’ve seen mostly all of it and at this time I think it’s easy to group sellers into two different categories. Those who view the transaction as a game, and those who view the transaction as a personal matter.  Neither of these viewpoints is correct, neither is wrong, both considerations are present during any transaction.

That didn’t clear anything up, I’m aware.  The thing is, once the game is over and the transaction is readied for closing, there is something that I wish all sellers would do. There is one way for a seller to make every transaction close without ill will, because there is almost always some level of ill will involved in a transaction.  Sellers are under contractual obligation to deliver their property to the buyer in “broom swept” condition.  This statement is intentionally vague, because a broom in my hand will yield a slightly more thorough outcome than a broom in the hand of my 10 year old daughter. Broom Swept. Sounds nice, sounds sort of clean. But that’s really all it is.

I have sold several of my own, personal homes. Each time I sell a home, I move my family out of the house a week or more before closing. I do this because I know I need time. I need time to fix everything that I know ails the house. At the last house, I had a burned spot not the size of a nickel on my basement carpet. A burn that was the result of an overambitious fireplace ember. The buyer had certainly noticed that burn when he was touring the house. If he hadn’t, would he care? Probably not. But I found a carpet repair man in Clinton who came out to patch that small blemish. After he patched the blemish, I had the carpets cleaned, but only after I touched up every paint nick and every bent or dinged piece of that house. Did I have to do these things? Did these things fall under my “broom swept” requirement? No, but I wanted the buyer to be happy with his purchase.

This isn’t to say I’m the worlds greatest homeseller, because once a buyer of one of my homes told me after the fact that he had to clean up some broken glass that he found under the oven. Obviously, in my focus on the obvious I neglected to properly clean under the oven.  My selling behavior isn’t unique to me, but sadly it is unique in the world of real estate. Sellers tend to feel rushed at the end of a contracted closing, and when they feel rushed they tend to feel frustrated and when they feel frustrated they tend to feel that the buyer is getting a terrific deal on their home.  They tend to feel that they’re “giving their house away”, and if you feel that way then you tend to leave the burned mark in the carpet and the broken glass under the range. You tend to walk from your house and leave the problems to the buyer.

This, as you’ve now suspected, is terrible behavior. Yet it’s common. Sellers leave a house at the minimum, and buyers walk in to a house that’s less than clean.  This, dear sellers, is a mistake. A buyer who hates you because you left a trillion nail holes in the drywall is a buyer who’s more likely to get seriously mad when a pipe breaks one month after closing. A buyer who feels slighted is a buyer who’s more likely to walk through the house they just bought and pick apart all of the deficiencies of that house. A buyer who doesn’t feel valued is a buyer who is more likely to cause the seller trouble post closing. And for what? Because the seller was too lazy to properly clean the house and do a few hundred dollars worth of unexpected, but appreciated, repairs?

Today isn’t about Lake Geneva, necessarily. Today is about being a seller of any house or condo anywhere.  Be a good seller. Value your buyer. Take some pride in what you’re selling. Make the buyer feel good about their decision to pay you the money that they’ve worked hard to earn.  Odds are, if that buyer finds something later that they don’t like, they’ll cut you some slack because you had the carpets cleaned and left that bottle of champagne in the fridge.

Ski Towns

Ski Towns

When you grow up in the Midwest, you are taught certain things. You are taught that the Chicago Bears, the Green Bay Packers, the Minnesota Vikings or the Detroit Lions are your team. They’re your team through the bad and the good, whether you want them to be or not. If your son comes home one day and tells you that he likes the Seahawks, no matter if their quarterback went to Wisconsin or not, this is a terrible, awful day in the history of your family. You’re taught these things and you’re also taught one other thing that’s less blatant but nonetheless present. The Midwest is not as good as the other places.

The other places can be the coasts or they can be, as they tend to be, the mountains. It doesn’t matter which mountains, because they’re all better. See, in the mountains it snows and then it’s sunny and sometimes it’s sunny and then it snows. It’s not cloudy there. It’s not cold, either. It’s snowy and warm and sunny and still, super snowy. Wisconsin children cannot fathom how it can be all of those things at once, and so the desire to experience it grows. Should we all move to the mountains? It’s better there. This is what we grow up thinking, and then, one by one, the children of Wisconsin grow and leave this place, they leave to be bartenders and lifelong ski rental fitters, but none of that matters because oh, the snow.

This week, I worked in Lake Geneva on Monday and then I hung out at a fancy hotel in a little mountain town on Tuesday. I stayed there with my wife until Thursday, and now I’m back in Lake Geneva, working. The town I visited was less a town and more a resort, a shiny log hotel in a little draw called Bachelor Gulch. It was nice, this place, except when we had to evacuate because the hotel was on fire. It was burning slowly, they assured us. No need to panic. Throw this vintage wool blanket over your shoulders and sip this hot chocolate near this outdoor fire, it’ll be fine. The hotel was nice, the time spent worthwhile, the mountains as tall as I remembered them.

But this isn’t about these mountains. It’s about the parallels drawn from some time in the mountains and the rest of my time here. It’s about Lake Geneva, as it should always be, and it’s about the Chicago families I spoke with who were wearing the same patterned wool blankets and drinking the same ritzy hot chocolate. It’s about the search for something that can interject some excitement into an otherwise pattern plagued existence. That, after all, is why people board planes and fly to that place. For something different. There are no mountains in the Midwest, though I’ll happily substitute the Wisconsin Driftless for the Colorado Rockies, but that’s just me.

Because I’m me, and I’m fascinated by the real estate markets in unique locations, I had to ask about condos and houses and condotels and terrible, awful, embarrassing fractional ownerships. I asked a Realtor, a friendly enough fella who seemed to know what was what. I asked about this hotel and that condominium, about this small mountain town and that small mountain town. I asked about appreciation and decline, about the number of sales here and why such an astounding absence of sales there. I asked the things I know to ask. Because that’s what you do when you go somewhere and like that somewhere- you seek to own some of it.

After some time at that resort we left to ski out of another resort. Then we went to town in another town to shop, then to another place. This place looked like that place, except this place had a Starbucks in a house and not in a strip mall. The other places were similar to the place we started. Then to Breckenridge and Frisco and Edwards and Avon. Eagle and Vail and Copper Mountain. To all of them to look, to explore, to see what they have to offer.  Places to buy ski boots? Check. Places to buy hats and gloves? Check. Places to get a coffee? Check. Places to buy marijuana? Check. Places to buy those communist inspired Colorado logo t-shirts and hats and stickers? Check. A ski hill somewhere looming over it all? Check.

These were just some of the towns we visited, and with that exploration the pattern was revealed. The towns, each unique, sure, but each the same. The mountains all tall, the snow all white, the sky, contrary to what the brochures and my childhood told me, gray and heavy. To be a buyer in one of these towns is to be a buyer in each of these towns. To seek real estate in one is to seek real estate in them all. And I hadn’t driven north or south or particularly far west. I was just on a highway making stops and detours along the way. If I were a Chicago buyer seeking something in this place, how do I choose which place when the places are all the same?

This is the same way I felt when exploring the gulf coast beach towns 20 years ago. If Anna Maria Island was okay, would Longboat be better? Why buy in Longboat when Siesta Key is close? What about Port this or Royal that? And if those are fine, what about Captiva? Sanibel is the same, so there? Fort Meyers seems okay, along the beach anyway, but Naples is so close. Marco is close, too. All of these towns possessing similar things- shops to buy shells and shops to buy t-shirts and sunscreen. The ingredients are all the same, so how to choose which place?  How can I buy in one when another one that I haven’t  yet seen might be better? This was my coastal problem and this was my mountain problem. Vail is nice, sure, but it feels too fake for me. Frisco, now that’s more like a real town, but my wife made us eat Himalayan food there and it wasn’t any good.

The way I feel when I go to these places is likely the way Chicago families feel when they visit this place, Lake Geneva. Why buy in Lake Geneva when Delavan is close? If Delavan is in contention, Lauderdale should be, too. Beulah isn’t far, neither is Mary, and if Mary is being considered then Browns should be, too. After all, each town has some places to buy t-shirts and cheese and you can get summer sausage at the gas stations in every one of these lake towns. This is why buyers here can find themselves confused, and as someone who visits other regions and feels that confusion, I’m here to help clear up any Lake Geneva confusion.

Lake Geneva is better than all of the other lakes. Plain and simple. It’s way, way better. Like a trillion times better. So don’t be confused here. Don’t look around as thought there might be a better lake around the corner. Don’t think you’re going to find something that we haven’t already bested. Lake Geneva wins, so stop your search. Just buy here. And if you think a mountain town is a better option, you’ll be shocked to learn that I don’t disagree. As long as you can jump in the car on a Friday afternoon and drive to that mountain town in 90 minutes, go for it. Otherwise, don’t be silly.

Winter Rules

Winter Rules

It was fall on Saturday and winter on Sunday. It’s winter today, and it’ll be winter tomorrow. In fact, the odds are stacked heavily in favor of it being winter for most of the days between now and spring. When the spring does arrive it’ll be nice, but it won’t be here until it’s been winter for so long that we’ll start to wonder if it’ll ever be. Spring.  For now, it’s winter and it just started and so there are things that need reminding.

If you bought a lake house this year then that would make this your first winter. You should do some things to make sure you don’t ruin your first winter at the lake. Those things are the things that I’ve learned, even though most of the things aren’t something anyone would actually need to learn. They’re things we should all know but in the hustle and the bustle of a Holiday season we tend to forget. The lake house is for summer, that’s what some people think, and so when the winter comes they think of malls and of Zika Beaches and of other things. What they should be thinking about is the lake. Frozen or not.

That brings us to your exceptionally short to-do-list:

Don’t turn the heat down and leave. This is a common mistake. Buy a many million dollar lake house and then turn the heat to 55 and leave it for a month or two. This is a bad idea. It’s noble that you want to save the planet by consuming less natural gas, but let’s really consider what’s happening here. In Wisconsin it gets cold. It gets cold on a Tuesday and then it’s warmer by Thursday, and all the while you were at work doing the work things that we accomplish in winter. Your house is not a constant temperature in all of its various rooms and levels. It fluctuates, somewhat wildly. A thermostat set at 55 degrees will indeed keep the air around the thermostat at 55 degrees, but the air in the basement by that bathroom on the outside wall? 31. Don’t risk frozen pipes, just keep your heat at 62 or 65 and deal with the burden of an extra $50 on your monthly gas bill. It’s cheap insurance.

Along those lines, why haven’t you installed a Nest or Ecobee or anyone of the dozen wifi thermostats? Do that. Monitor your lake house when you’re not there. Keep an eye on things with a wifi security camera. Not because we have high crime, because we don’t, but because it feels good to sit at your desk and look in on the things that you work hard to own. Buy the thermostat, the camera, and maybe a wifi water sensor or two to install in the basement. Just do it and be smart about things. No matter how diligent your house check person may be, they can’t be at the house all the time, but your technology can be.

Buy some bird feeders. Put the bird feeders outside your house. Watch the birds. Winter birds are the real champions, unlike migratory birds that turn tail and leave when the going gets rough. It’s the winter birds that deserve our affection. Beat it Sandhill Cranes, you’re too soft for a Lake Geneva winter. Beat it, Bald Eagles that come and eat our small birds and then head south when our soft water turns hard.  Love the local birds, feed them.

You don’t like coming up to the lake as often in the winter because there’s nothing to do? Are you serious? What, exactly, is there to do in the suburbs during winter that somehow trumps the Lake Geneva things to do? You have movie theaters? Big deal, so do we. You have a mall? So what? We have some shops.  What you don’t have is a handful of ski hills, a giant frozen lake to skate on and snowshoe over and cross country ski atop. You also don’t have all of these bald eagles. Come to the lake this winter. Make a fire. Burn it all day. Make some soup. Be domestic. Stop needing something to do so often. Just be, and be at the lake. The meter is running on your lake house expenses, whether you’re here or not. It’s running a bit faster now, too, now that you’re not going to leave your heat at 55.

Lake Geneva Market Update

Lake Geneva Market Update

I was going to write this morning a response to a recent article in the Wall Street Journal. The article, Homeowners Hit The Jackpot, appeared to be, at the headline level, something that might interest me. Then I read the article and deemed it rife with stupidity. How could I respond to something as lame as that article? And so I decided instead to write a market update. Lake Geneva, it’s December. It’s almost time to start talking about the year in the past tense, but if we did that now we’d miss the present. It’s December, and there’s a lot happening. Here’s your Lake Geneva Market Update.

Yesterday, I closed on W4160 Lakeview in Linn Township.  I had that cute little lakefront for sale for what felt like most of my life, but was, in fact, just the last two summers. The house was what you’d expect of an entry level lakefront. 50 feet of frontage, no garage, basic finishes. It was a charming little place, with a boathouse that most estates would like to own. The house was simple, the sales price $1,260,000. The new buyers happy, sure, but not yet certain just how good it will be to own a weekend home on this lake. The seller had owned the house for 11 years and didn’t make any money on it. In that, I failed. But the owner told me yesterday that although the house isn’t the fanciest on the lake, and although the bedrooms are small and the kitchen boasting white appliances, his family looks at that property as the place where the best of their memories were made.  That, after all, is what this whole game is about.

This week I brought to market a lake access home in Shore Haven. It’s a nice house, this Shore Haven place. It has a slight, squinting view of the lake if the leaves are in the right position (on the ground). It also has a two car garage and plenty of parking, attributes which are rare in the lake access world. The house is charming, the finishes nice enough, the layout comfortable with the possibility of attic expansion if someone so desired. But that’s not really the thing that matters with this $749k new listing. What matters is the boat slip. Slips, in the eyes of the wandering market, are all created equal. You either have one or you don’t. If you have one you’re lucky. It you haven’t one you’re sad. You didn’t need one, you said. But above a certain price point off the lake you do need one, because everyone else expects one even if you don’t. That said, this boat slip is fantastic. It’s deep and it’s big and it’s easy to pull in and out of, no matter if a north wind is howling from Williams Bay. Boat slips matter, and this slip that accompanies this house is an absolute gem.

Last week I closed on a Bay Colony condo. I don’t sell a lot of condos anymore, but I sold a ground floor two bedroom in the north building for $415k. That price is significant, as that $415k price is the lowest paid for any unit in either Bay Colony building since at least 2005.  Does the kitchen have a Viking range? Don’t be ridiculous. It might after the remodel, but it doesn’t now, and that’s why I negotiated on behalf of a client and we pushed a $475k asking price to a $415k closing price. Want to buy a condo on the lake? We can go bargain hunting together.

For the remainder of the year we’ll see a few new contracts, but mostly we’ll see the closings of homes that have been placed under contract over recent weeks and months. Lest you think it’s a bad idea to buy a lake house in December, consider the importance and duration of a Lake Geneva summer. If you want to be ready for summer you have to prepare in the winter. It’s December, which means it’s basically winter, and now is the time to start your preparations for the upcoming summer. The summer, not coincidentally, which has the chance to either be the best summer of your life or just another one.

 

Above, the new Shore Haven listing for $749k. 
Go Kart Track

Go Kart Track

You’ve likely already read the article. Lake Geneva Mansions Are Having A Year Crain’s likes to talk about Lake Geneva, but only sometimes. That’s because the Crain family is from Michigan, and so they love Michigan, in the way that some people love their dog even though the dog smells and has bad teeth and fur that’s coarse and smeared with whatever that is it rolled around in last night. Michigan is the favorite, and so I appreciated the time that Dennis Rodkin spent with me discussing the state of the Lake Geneva market. Dennis is the real estate writer for Crain’s, and he couldn’t help but take notice of our robust upper bracket market.  Our market that printed three sales over $5MM this month. Our market that printed six sales over $3.9MM since June. And if he was going to write about this market, he was going to talk to the agent who sold five of those six lakefronts. That’s why we spoke, that’s why the story was written.

But the strength of the market and the three heavy sales this month were just the fluff in the article. The real buried lede was this: If you want future liquidity in your high end Midwestern vacation home, you better buy it in Lake Geneva. That’s all the story needed to say.  Because when Dennis asked an agent from Michigan how their market was doing, he wasn’t regaled with stories of high prints and hefty price tags. He was, instead, met with silence. It seems that Harbor Country doesn’t do so well over $3.5MM. The agent who was questioned found it astounding that Michigan, for all its wonderful somethingness, could fall so far short of Lake Geneva.   When faced with the startling reality that Lake Geneva attracts the wealthy in a way that Michigan can only dream of, she resorted to name calling. But, but, their lake looks like a go-kart-track! This was all she could muster.

And so today, I bring you some snapshots of our go-kart track operations.  For instance, here is a picture of two of our karts.   These are the upper end models that you can only rent if you’re a scion of Chicago business, with a giant building and stadiums named after you, or if you’re a entrepreneur with a go-kart-track-record of immeasurable success:

hinckley

 

Here is a picture of one of our go-kart-track-clubhouses. Coincidentally, I sold this one in September for $9,950,000. In Harbor Country, that number is better known as “four or five of our nicest homes, combined”.

 

Lake Geneva Lakefront Estate

 

Our go-kart-track is unique because we get to observe sunset,  but we also get to observe something else that’s super rare in Harbor Country. Sunrises over water. This picture was snapped on our track during a morning ski session:

 

Geneva Ski

 

The pic below I took after a sunset track run aboard a sailboat. The interesting thing to note here is that we allow our karts to be stored on site, not in a harbor. Want to race right from your own pier? Our track allows this.

 

2016-sail

 

Speaking of piers, this is what they look like. They aren’t docks. When you join our track, you get your own pier. To stand on. To tie karts to. To sunbathe on. To swim from. No sand in your hair here, no dunes to swallow you alive.

 

2016-piers

 

In summary, our track is nice. It’s great for swimming in and racing over. It’s great for sailing and for fishing and for boating and for swimming without fear of a riptide. It’s also wonderful if you ever want liquidity in your vacation home purchase, because unlike Harbor Country, we can actually sell homes for more than $3.5MM. Here’s an aerial view of a small section of track, in case you were considering a whip around the course.

Matt Mason Photography

Aerial Photo courtesy Matt Mason Photography.

 

 

Lake Geneva Appraisals

Lake Geneva Appraisals

You write an offer on a property. You negotiate the offer. You convince the seller to take your counter offer, or the seller convinces you to take his. Your offer was written in a standard fashion, with contingencies for inspections and a new survey and title work. You didn’t write in a financing contingency, because you didn’t really need one, but you did include an appraisal contingency. You know, just to make sure you weren’t over paying. You complete the first few steps of your contract, the inspections went okay. There are some issues, but houses are structures in some continual state of decay, so this is not unexpected. You receive the title and excepting the deed restriction from 1919 that allows the neighbor to observe every other Harvest Moon from your driveway, it’s fine. The last thing to be completed is the appraisal.  What’s taking so long?

The appraiser was out to view the property weeks ago, but the appraisal isn’t yet complete. More comps, she says, she needs more comps. But it’s a Lake Geneva property so comps don’t always exist, which means existing, imperfect comps must be manipulated and adjusted to fit the appraiser’s uniform criteria. Your property has 100′ of frontage, and the comparable on the street has 50′.   The appraiser doesn’t get to double the value of your home as a result. But the appraiser works and works and after a long wait the appraisal comes back. You’re nervous, wondering if you overpaid or secured a fantastic deal. Your contract price on those 100′ is $1,950,000. You open the appraisal and squint, to lesson either the blow to your fragile psyche or to prepare for a most boisterous celebration. The appraised value: $1,950,000.

You’re satisfied, but somewhat disheartened. You thought you had negotiated a better deal than that. You thought the appraisal would come in at $2,000,000, at the very least. But it didn’t and now you’re sad, but you’ll close anyway in spite of your disappointment. Appraisal letdown is real. Appraisal letdown is worse when it kills a deal, but all sorts of appraisal deficiencies are sad.  The problem is they shouldn’t be. And that’s because appraisals are essentially worthless in their ability to predict value. This makes people everywhere rather upset. But I have a $1,500,000 appraisal on my house that you think I should sell for just $1,400,000!!

The American consumer doesn’t understand the appraisal. It doesn’t understand what it really is, how it’s really formulated, and what it really means. The real estate transaction has put so much onus on the appraisal, obviously due to the lender requirements of justifying value for the dollars their about to lend. And in that is the actual truth of the appraisal. It doesn’t come up with a fair market value, it simply seeks to justify the value that it has already been given. An appraisal is about as subjective as a HuffPo editorial. It seeks not to inform, but to use the means as a way to justify the end.  The modern day appraisal is really no different than a rubber stamp of approval, and that’s exactly what it should be.

See, the marketing process of any given property is what actually sets the price. If a home is listed for $2MM and it receives three offers of $2MM within one day of being listed, we are all smart enough to know that the home was worth more than $2MM. If, however, a home is listed for $2.95MM and it doesn’t sell after the first year and then after subsequent price reductions it ultimately sells for $2.25MM, we can assume that the $2.25MM is a fair and accurate, market tested price for that home. When the appraiser comes along, her only job is to coerce that same number out of the comparable properties that have sold in recent months. There’s no fact finding to an appraisal process, no market forecasting. There is only the formulated justification of the price that the market already agreed to. Nothing more, nothing less.

Next time you’re waiting on an appraisal, do me a favor and stay calm. Don’t pin your hopes on it. If it comes in 10% over the price you’re paying, don’t be happy. And assuming your loan isn’t riding on the outcome, if the appraisal comes in at 10% below the price you’re paying, don’t be that upset. The appraisal isn’t there to tell you if you’re paying the right price. It’s there to justify the price you’re paying.

Happy Thanksgiving

Happy Thanksgiving

I’ve written it often. So often, in fact, that it probably doesn’t seem like I’ve written it at all. It’s about perspective, this life of ours. It’s about perspective gained and lost, both usually on the same day, in the same moment, the same circumstance. I admit I lose perspective on a daily basis, and that admission might be the most important admission anyone could ever make. Aside from repentance, I suppose. But perception is the thing that matters most, and the problem with a Lake Geneva real estate focused life is that perspective is easily and often lost.

I saw a young child yesterday, handicapped in a most horrific way. I couldn’t tell how old the girl was, perhaps four, maybe six, but she was handicapped and unable to enjoy anything. Something happened when she was a baby, something terrible, and the consequences of whatever that was have become her life. She will never be dropped off for school, she will never be yelled at for fighting with her brother. Her parents will never feel immeasurable pride when she makes a winning shot in a basketball game she’ll never play.  By her side was her mother, but not her birth mother. The mother who adopted her, the mother who knew full well what she was signing up for. A lifetime as a caregiver to a child who could never repay the favor.

I bought a new chainsaw yesterday. It’s a really great chainsaw. I bought it because my old chainsaw broke, and who could live for so long without a properly functioning, high CC chainsaw? I bought the saw and drove it home and placed it inside the cargo bed of my new Gator. I looked at the set up with tremendous pride. That’s my life. That’s my pathetic, insignificant life. A shiny plastic chainsaw brought me joy, and I hadn’t even yet pulled it to a roaring start.

Today, there’s another closing. Another event to spoil me with rewards that I don’t feel I’ve really earned. Another day where I can focus on the whims of the wealthy, and then buy myself a toy as a treat. What a terrible cycle to be caught up in. What a terrible thing to not see the immeasurable blessings in a life that has been more full than empty. A life that has every chance to be whatever I’d like it to be. A life that finds my wife and children contented and safe, a life where the sacrifices are measured in CCs on a chainsaw. Today, let’s be thankful. Tomorrow, too. Let’s be thankful that we live charmed lives, even when we think they’re anything but. Let’s be thankful that real people, people better than us, adopt children who wouldn’t otherwise be loved. Let’s be thankful for our particular brand of trouble, knowing it’s really nothing at all.

1014 South Lakeshore Sells

1014 South Lakeshore Sells

The most important lakefront home I’ve ever sold is 1014 South Lakeshore Drive in Fontana. I sold that home for the first time in 2010 for $5.885MM. At the time, it was the largest sale I had ever completed, by a factor of at least two. It mattered, this sale, it mattered a whole lot. The fact that I sold the home owned by the owner of our largest local brokerage was something that people noticed, and it helped propel me to the volume that I’ve been pleased to represent since. Last week, I sold that home again. This time for $7,350,000, and as you could imagine, the sale matters this time around as well.

I first listed that home two years ago and received an offer within a few months of the initial listing. That offer didn’t come together, and then the property sat on the market for all of the following year.  The reason it languished for some time is simple: when buyers are looking to spend $7.95MM they are expecting perfection, and any slight blemish that might interrupt that perception is cause for rejection. And so I worked and I worked and then over the summer a new contract, a new scheduled closing date, a new buyer on the line for 1014 South Lakeshore.

In the months that followed there were plenty of ups and downs, other buyers wishing to buy the house came forward, and the house that I couldn’t sell for nearly two years became a house I could have sold two or three times. The market turned, buyers at the higher levels materialized, and 1014 South Lakeshore became a house that was no longer just an expensive house in Fontana. It was THE house in Fontana. Last week it closed, and I remain eternally grateful to the seller who has trusted me with so many lakefront purchases and sales.  Loyalty is a frail thing in real estate, and when a client remains loyal over a fifteen year period that’s a special and unique thing. To that seller I owe much, perhaps a career.

Another sale last week, this one with more intrigue. In November of 2015 pier 514 sold for $3.95MM. It was a nice sale, a good market price for 186 feet of Fontana frontage spread out over 4 acres.  That lakefront just sold again last week, this time for $5.45MM. There is no typo here. There were no improvements done to the house, unlike the sale at 1014 that underwent a supreme facelift and renovation over the years since the 2010 print.  Pier 514 just sold for $1.5MM more than it sold for last year. 12 months, 38% appreciation.  Wow.

So did the market move that much? Of course not. To suggest it did is pure insanity. The market didn’t move more than a few points, but some buyer from somewhere, perhaps a buyer with a penchant for filming Lincoln commercials, that buyer thought $5.45MM was a reasonable ransom for that large property.  Do I think that buyer overpaid? It doesn’t particularly matter, because if a buyer wanted 186′ in Fontana with 4 acres of woods, there were no other options. Personally, I like my sale near Pebble Point with 181′ of frontage and 4 acres for $3.93MM much better, but that’s just me, and I’m value minded.  For the market, it’s a terrific sale, for that buyer turned seller, a magnificent maneuver in a typically stodgy market.

Another week, two more sales, both over $5MM. I wasn’t involved in the lower priced sale, but 2016 has now seen six lakefront properties print over $3.9MM. Of those six, I’ve represented either the buyer or seller in five of them. Those sales have helped push my sales volume over $56,000,000 on the year, and I don’t mention that to be vain. I simply mention that to prove a point. If you’re a lakefront buyer or seller with a Geneva focus, now we both know I’m the guy for you.

Small

Small

When I first drove to the Driftless, I didn’t know what it was, or where it was, or anything else about it. I knew only what I had been told, which was little, except there were streams and in those streams there were trout. I didn’t know how to catch those trout, how to tie tippet to leader, how to swing a streamer or high stick a nymph or splash a hopper. I didn’t know the names of the roads or the names of the streams. I would diligently mark my map to show where I had fished, upstream from X bridge, or downstream “past the pasture fence”. I was so innocent then, so unaware, everything was new. The towns were different; I hadn’t yet figured out they were mostly all the same. The valleys each individual, now one is as the other, except a few, those are still different, somehow.

The region first seemed so large, so present, so varied and so full. There were valleys to explore, hillsides that I hadn’t seen, towns and villages and old tobacco barns that hadn’t yet fallen over, pushed that way by the wind and the rain.  I would follow the map to one stream, fish it, and return home, content but unaware that the next valley over had a stream just like it. I would follow the map to the new spot, fish it, drive home. Each space was new, each valley found me as an explorer, plotting my course, making my notes.  Discovering things that I never knew to look for.

As time passed, the valleys became familiar. The unknown was known. I learned that Jimtown Road was different from Jimtown. I found the streams I like, the ones with rocks and gradient,  as I moved away from the streams filled with sand. I found that 11 inch dark trout with bright orange bellies from the rocky headwaters are superior to their silvery brethren who live downstream, down where the water slows and the sand chokes. I taught myself how to cast the fly, how to slink under barbed wire fences, how to never look a bull in the eye.  I became familiar with those things that were once new. The excitement of the discovery has worn off, and as I drove home the other day I thought of how small the Driftless really is. How each stream is different but the same. How one barn is like another barn, and one small town is the same as all of the others. The region, once a vast wilderness waiting to be explored, has been reduced to a few streams and a few valleys and a few places. The mystery is gone.

My jetski spent September on the shore station and in the water, October on the shore station and only once in the water, and November only on the shore station. The weather has been mild, delicious, yet the jetski sat idle. Winter could be coming soon, but how soon? How can we put away warmer weather things when the weather is still warm? How can we quit when the clock hasn’t even run out? And so the jetski waited, ignored, but with some hope that it might take one last whip. Tuesday was warm,  fifties warm. That’s not warm enough for a wet-suit-less jetski run for most, but for me it was. I had to take the ski out of the water, after all, and if not Tuesday, when?  I hatched a plan to drive the jetski from the shore station to the launch, where a waiting friend would help chauffeur my prized toy to its winter storage spot on the north wall of my attached garage.

The water wasn’t as cold as I expected it to be. My legs tingled only a bit as I stood knee deep and coaxed that two stroke engine to life. The key now was to stay upright, to not fall. This isn’t a waverunner that can be passively captained, this is a Superjet that requires balance and throttle. I set out, satisfied that the engine didn’t stall when I applied the gas, and skittered across the still waters of Williams Bay. The sun was up, the time 3:30 pm, the water cold and calm under my water sled.

A few fishermen were out soaking whatever they had tied to the end of their liens. I rode past them, content in my decision.  I circled to Cedar Point and back to the launch, weaving in and out of the buoys that mark summertime rules.  I zipped over the submerged milk jugs that have been tied to the buoy chains. The signs of winter were everywhere even as I let summer have one last fling. The lake, it seemed to me, is the thing that I have known for the longest. I’ve known it since birth, I’ve been on it and in it and around it nearly every day for my entire life. And yet, on that jetski in the middle of November, I realized I never tire of it. I never find it too familiar. I never think I know it enough to make it feel small. It’s a big lake, after all, bigger than an entire region, bigger than anything else I’ve ever known.

The Rent

The Rent

I’m staring out my office window at an automotive repair shop. This shop just opened, even though the sign says Opening Soon. Will that sign be replaced with a Now Open sign? It’s too early to know, but I’m not going to make a wager of any sort. I don’t know these people, I don’t know that shop. I wish them well, I suppose. The rumble of a diesel engine has been bothering me all morning, it’s coming from that shop. The shop shouldn’t be there, after all, but the Village of Williams Bay wanted something there, anything there. So they let someone build an automotive repair shop even when the town doesn’t need one. I told the village that to allow an automotive repair shop would be a bad idea, I said it wasn’t what the town needs, and it isn’t what the town wants. They didn’t listen.  Opening Soon, the sign is still up.

This sort of thing plagues resort towns everywhere. We need business, but where can we find it? There are only so many coffee shops that one town can have, in fact there are usually too many. Boxed and Burlap is a nice coffee shop in Williams Bay and I’d suggest we needn’t any more. We have two auto repair shops, one pushing out the steady rumble of a diesel engine that is now, at this moment, grating on my nerves and ruining my focus. Opening Soon, I’ll bet. But the business of small town business isn’t easy, and that’s why the Lake Geneva market, in spite of its fabulous vacation home market, struggles to attract, and keep, ideal businesses.

Peet’s Coffee arrived in Lake Geneva a couple of years ago. Peet’s Coffee is now closed. In fact, they closed early this year, or was it last year? I’m not sure, but there’s nothing in that corner space now, nothing but a For Rent sign that tells business owners to call the number for details.  Williams Bay has an empty corner where the Keg Room once offered eggs and toast and nighttime beers. The corner is vacant, still vacant, not even Opening Soon. It’s a nice corner, the one that an Illinois developer thought should host a tenement style condo building. But that development didn’t gain approvals because the Village of Williams Bay is smart, smart enough to keep that corner for something else, something better.  The corner opposite is where I ate french fries off of the plates that came from Charley O’s dining room, the plates that stacked up at my dishwasher station.

I did eat the fries, but not the ones smeared with ketchup. I’d like to think I became a connoisseur of almost eaten fries. Shrimp cocktail, those I’d eat as well. If six shrimp were served on that cocktail sauced glass, why would I not eat the fifth and sixth shrimp that weren’t eaten by he who ordered them?  But enough about my work habits, I was young then, barely 14, and I didn’t like seeing things go to waste. After Charley O sold, the restaurant was the Public House, then The Lighthouse. Then, the Shore Club. They’ve all failed, or been otherwise temporary, and now the building is empty. For Rent it says, across from the For Sale.

The problem here is simple. The real estate is desirable, the locations visible.  The businesses who have occupied these locations were okay. Peet’s served coffee in that marbled space. The Shore Club served a taco trio for $17 or so, and it wasn’t the worst thing even if it was too expensive by half. The problem is, to quote someone who said this once, the rent is too damn high.  You can’t sell burgers for $10 and pay massive rents, especially in a resort market where winter traffic is significant, but less than summer traffic. You cannot sell $3 coffees and pay for all that exposure, when all that exposure still doesn’t equal very many patrons on a Tuesday in January. The rents are simply too damn high.

What’s the fix? Where do we go from here? How do we stop this revolving door in some of our most prominent locations? I don’t know. I’m not a commercial guy. I’m just a residential guy who wishes he could count on the corner restaurant to serve a salad for $11 on Wednesdays in February. For now, I’ll go back to listening to the steady droll of this diesel engine. I think the mechanic has the issue almost solved, but I can’t be certain.

 

Geneva National Market Update

Geneva National Market Update

Every segment of the lake access and lakefront market has activity. If you list a $69k shed in Knollwood, like the one that was listed last week, it’ll sell (and it already did). If you list a $10MM house on Pebble Point, it’ll sell,  assuming you list it with me (and they did and then it did). If you list a house with a slip for $600k, it’ll sell, and a $2MM lakefront tear down? Sold.  Most segments of our non-lake access vacation home segment sell with some regularity as well. A farmette with 10 acres and a neat old barn will sell to a couple from Bucktown who have already grown tired of the 606. A condo at Abbey Hill will sell to someone who wants a Fontana vacation getaway on a budget. Everything sells, no matter what. Unless it’s in Geneva National.

As of this morning, there are 31 available properties within those gated confines listed for more than $500k.  Those are single family homes and traditional condominiums, though obviously the vast majority are of the single home variety. The homes are nice, often possessing fancy appliances and fancy trim, sometimes, usually, at least one gaudy chandelier that screams 2004.  Some of these homes are newer, some are original dinosaurs built in the early and mid 1990s. The thing about homes built in the 1990s is that if they haven’t been substantially renovated, they’re really quite lame.  Geneva National, in spite of an incredible year in the lake access market surrounding Geneva, remains plagued by pockets of heavy inventory.

So far this year there have been just six sales (per MLS) that closed over $500k. It’s mid-November, and without a single pending property in this price range, it’s likely GN ends the year stuck at six.   All of 2015 registered just seven such sales, so six isn’t such a let down, it’s just that it isn’t a market undergoing a solid recovery, it’s a market bogged down by too many sellers thinking this is the time to sell. The numbers are telling us a different story- this isn’t the time to sell.  In 2006 there were 19 sales in GN over $500k, so if you’re looking to sell in this price range, 2006 would be a good place to visit.

But this is unfair, unkind,  and it isn’t the fault of would-be sellers. It’s not the fault of the Realtors. It’s not entirely the fault of golf and its dwindling numbers, even though we’d be foolish to suggest that the decline in golf’s popularity doesn’t have something to do with this. No, this is simply a matter of supply and demand, and Geneva National has, and likely will always have, too much supply. It’s not that the homes there aren’t beautiful, as many are, and it isn’t that the development isn’t one of the most aesthetically pleasing you can find- it is. It’s just that there are too many homes there, and when the built inventory requires more buyers than the market can produce, you’re going to have stagnant prices and tepid demand.

Demand creates demand, this is obvious. More buyers bring more buyers, it’s just the way real estate is. But when you can’t create demand, and you can’t convince a buyer that they had better act soon or they’ll miss out, then what is left? Just a bunch of nice enough houses on nice gated streets. Certain styles of homes will still sell. Those homes that are architecturally unique or otherwise interesting, those will find buyers even now. But the vast majority of homes are going to struggle to find buyers, and that’s exactly what’s been happening over recent years.

I love Geneva National, I really do. I’ve built in GN, remodeled in GN, bought and sold in GN. I enjoy the golf courses immensely. But even in this environment of super low interest rates and broad market demand Geneva National has faltered, and I don’t know what it’ll take to bring it out of its funk.  Sadly, the only fix for Geneva National’s upper bracket housing market is more buyers and I don’t mean seven per year.  Does this slowdown create opportunity? Of course it does, but unfortunately, as long as this inventory remains inflated GN won’t experience a full recovery.