Blog : Black Point

2017 Upper Bracket Lake Access Market Review

2017 Upper Bracket Lake Access Market Review

It’s well known and generally accepted that anyone with a lakefront budget will wish for lakefront. There were some people who lived up the road from my parents’ lakefront house in Williams Bay. Those people would tell me how they were glad they didn’t live on the lake. Too much noise from the boats, the waves, the sound of all that enjoyment. They preferred, they said, to live away from the lake, where it’s quiet. Where the lapping or crashing of the waves cannot find them. I remember that even as a young child I knew those people were lying. No one would prefer to be off the lake, and if a budget allows and the aim is true, then lakefront is the result. Or is it?

The upper end of our lake access market is unique in the flexibility such a budget might afford. A lakefront buyer with a budget up to $2MM might very well, and usually will, choose lakefront. But what will that lakefront be? Will it usually be nice? Will it be large? Will it afford privacy? Well, no, not usually.  The concept applies to those with lower lake home budgets as well. If you’re a $1.2MM buyer, I can typically find you lakefront. But will that lakefront be a beautiful house with two car garage and a pool? Of course it won’t. It’ll be a cottage, with some questionable structural supports and tight neighbors. But for $1.2MM an off-water buyer can find something quite unique. They can find a boatslip, maybe a view, maybe privacy, maybe a pool, maybe five bedrooms. This is why even when market segments overlap within the same price boundaries, many buyers will opt off water in order to gain something the on-water home cannot offer.

In 2017, the upper bracket lake access market experienced a strong influx of buyer traffic and closed the year with a significant volume total. 2017 closed 27 off-water homes priced over $500,000. That’s a huge number, but what’s most remarkable is the presence of liquidity in the $900k and above segment.  This lofty segment closed nine homes, including two in the $1.5MM range.  During 2016, the same segment closed 22 properties, with just five selling for more than $900k.

Thirteen of those 27 homes sold with transferable boat slips. Two of the sales were in our co-op communities, one in the Congress Club for $1.53MM and one in Belvedere Park for $564k. There were no public sales in the Harvard Club for 2017. Associations with volume in this segment included Geneva Oaks, Cedar Point Park, Country Club Estates, Indian Hills, Oakwood Estates, Black Point, The Lindens, Knollwood, The Loch Vista Club, Sybil Lane, Oak Shores, The Lake Geneva Club, Forest Rest, Maytag and Sylvan Trail Estates. That’s some widespread activity, and the market should be pleased for producing such strong volume.  Oddly,  there wasn’t a single residential MLS sale in this segment in Glenwood Springs last year.

Most of these sales made good sense to me. I was involved in six of these 27 sales, which means that at least six of the sales made perfect sense to me. Of the other sales, I was surprised at a few of them, including an off-water home with no slip that sold north of $1MM. Another shocker, at least to me, was the sale of a hilltop home in Fontana that closed over $1.5MM and was subsequently torn down.  That property lacked a slip, but the lake view is, as a point of fact, one of the best off-water views I’ve ever seen.

I was asked this week what I thought would be the better buy with a $1MM budget: an on-water cottage or an off-water home. I admitted I’d always look lakefront first, but I would consider a larger lot off-water, so long as I had a boat slip and was located in a high quality neighborhood (think Black Point, Lindens, Glen Fern, Loramoor, 700 Club). In those settings, I would happily consider off-water to be a near equal trade off. This segment today is light on inventory, as is the rest of the vacation home market. Just 16 off-water homes are available priced in excess of $500k. Of these available properties, my favorite is the modern home (my listing) on  South Lakeshore Drive that’s been reduced to $1.095MM. This is a lot of house in a rare location, and while it’s off-water it feels like a private lakefront home. It’s unique, but it’s a winner.

This particular segment is heavily influenced by overlapping lakefront inventory, which is, at the moment, similarly low in inventory. If entry level lakefront properties continue to be difficult to source, and the off-water market in the $900k-$1.8MM range provides some nice options, expect this market to benefit. If you’re a buyer in search of a lake house around the million dollar mark, I’m here to help.

Above, an idyllic cottage I sold this summer in the Lake Geneva Club.
Black Point Sells

Black Point Sells

The whole lake is special, we all know that. Every nook and cranny, whether our particular nook or our own favorite cranny, is unique and valuable. Some North Shore dwellers couldn’t fathom the horrors of living on the South Shore, and those South Shore owners would rather be dead than find their pier numbering 1-411. But there are universal bright spots, rare locations where the stretch is just right. The trees greener. The water bluer. One cascading landscape falling into the next, on and on, until the unique nature of it all turns to a different flavor, a different style, favored by someone else but not by everyone. These particular sections of the lake are sometimes obvious. Basswood. Snake. Creek. The lanes that offer up our best.

But the other areas, those are more nuanced. I once had a client who could have owned anything he wanted on this lake, and it was a difficult push to get him to move from his lakefront house in Glenwood Springs. He loved that house. That area. Those streets. The way the lawn runs uninterrupted for 1800 feet, give or take. He learned to love what he knew, and when the chance to move on presented itself, bold and immediate, he paused. Because Glenwood Springs was where he felt most at home.

This week, I closed on a hilltop house on Black Point. Black Point is just to the East of  Majestic Ski Hill. It’s dark and it’s intimidating and it’s high. The Black Point Mansion once anchored the entire point, but is now relegated to the land on the West side of the point, and everything else has been developed into large lakefront and lake access parcels. The homes there are varied, but mostly vastly improved and manicured. Two years ago, a 1980s cedar house came to market for $1.395MM. It was a nice enough house positioned in a most incredible way on the top of the bluff that runs from deep under the water and up to this very tippity top. The house is surrounded by towering pines, the sort that create a most audible white noise whenever the wind rustles. Under the summer sun, the sweet aroma of pine sap is unavoidable and welcomed.

The problem here was that the house just wasn’t nice enough to command that price. It was a nice house, sure, and the location was incredibly desirable, but the house lacked the sizzle that the market responds to. There’s a house in Lake Geneva that just came to market around $1.3MM, and that house looks as though it’ll sell quickly. The location is okay, not super unique, but quality. The house, however, has the interior sizzle that buyers clumsily rush towards.  Fancy finished in this market always attract buyers, whether that’s a lakefront home, an off water home, or a primary home without any lake access at all.

And so the house on Black Point sat. It caught the attention of a dear client of mine, but our lower priced interest was rebuffed by the seller. We watched it some more, enamored with those pine trees and that deep water slip. It should be noted that “deep water” is a way we describe slips, often. But in the context of Black Point the deep water is different. It’s really deep. Like immediately deep. Dropped your sunglasses off the end of the pier? A fish with large teeth, irridescent skin and a light dangling off its head in front of its eyes just ate your RayBans.  The house, no matter that location and that slip and those two acres of pine trees, didn’t sell.

Over time, the price was adjusted. Lower a bit here and lower a bit there.  This spring, after the property was growing a bit weary, we bid again. That deal was negotiated to an end, and the cedar house on the top of Black Point sold this week for $950k. My client is pleased and excited, as am I.  This is a special location, a prized location. There are others on the lake, some more special and more unique than the others, but this location, man. This location. Congratulations to the new owners.

Linn Township Lake Access Market Review

Linn Township Lake Access Market Review

Once, I was in trouble with a seller. The seller was upset, but not upset like a seller gets when I leave a light on. Which, by the way, I tend to do. It’s like a puzzle, a prize, a riddle, each time different but always the same. A light, left on, somewhere.  But this seller was more angry than that, seriously angry, and not because I had left a light on or eaten a Reeses Peanut Butter Cup out of the pantry, which, of course, I never, ever, do. This time the seller was angry because I listed her home in the MLS under “Linn Township”. She said her home was in Lake Geneva, that no one looks for a home in Linn Township. That Lake Geneva is everything and Linn Township is nothing. Where is Linn Township? No one knows. She was upset.

This is not entirely uncommon, and if you’re a buyer I’m guessing you’ve possibly struggled with this distinction. The City of Lake Geneva is one municipality. The Town of Linn is another.  Where the confusion comes in is the mailing address for Linn Township homes is Lake Geneva, WI.  So, my confused seller from the example above was indeed correct, that her property had a Lake Geneva address, but it physically wasn’t in the City of Lake Geneva. Making matters worse, the Town of Geneva (think Lake Como, Geneva National, etc) also has a Lake Geneva mailing address but isn’t at all the City of Lake Geneva.  Of course none of this matters if Neumann was right and zip codes are meaningless.

Linn Township, whether confused for the City of Lake Geneva or not, is, without any doubt, the biggest player in our Lake Geneva lake access vacation home market. Linn has loads and loads of lake access communities, in fact, far more than all of the other lakefront municipalities combined.  I attempted a quick mental count and grew quickly tired by the time I had worked my way from Lake Geneva to Williams Bay, adding up 10 associations in that stretch alone. That brings up another item of geographical housekeeping: Linn Township is that area on the lake that extends on the North Shore between the City of Lake Geneva and the Village of Williams Bay. It’s also the area on the South Shore that runs from Fontana on the  West all the way back to the City of Lake Geneva on the East. It’s a large municipality, hosting a few dozen lake access associations, some big and others very, very small.

Today, just 16 off-water lake access homes are available in Linn Township. That’s a tragically low number, but it’s actually more inventory than most of the other municipalities have, relative to their 2016 sales. Last year, 12 lake access homes sold in Linn Township, priced from $69k for a cottage in Knollwood (please do not ask me to find you a $69k cottage in Knollwood, because the one that existed just sold), all the way up to an off-water estate in Loramoor that I sold for $1.625MM.

Maple Hills had a sale in the $200s, but before I tell you more, I will tell you that I’m not a huge fan of Maple Hills purely because it doesn’t feel like a lake access community. The location, approximately three million miles from the lake, makes it feel more like a subdivision in the woods than a subdivision near the lake, and for that reason, I’m not all that interested.  There was a sale in the Lake Geneva Beach Association at $360k, and there were sales in Wooddale (3), the Lake Geneva Highlands (2), Sunset Hills, Forest Rest, and Knollwood (2).  These are the sales, but 2016 was more notable for what didn’t sell, rather than for what did.

Per the MLS, there wasn’t a single closing in Shore Haven, Lake Geneva Club, Oak Shores, or Sybil Lane.  Nothing sold on Aspen Lane, nothing on Black Point, nothing in Glen Fern, nothing in Hollybush, nothing on Hunt Club Lane, nothing in Valley Park, nothing in the Lindens, nothing in Alta Vista, nothing here and nothing there. It was a year of limited inventory, and because of that, the sales totals were anemic. But beyond the lack of inventory pushing the overall number number, there were some notable offerings that didn’t transact. I discussed this at length in my year end review of the lake access market, but as a quick reminder, the market tested that $1.1-1.4MM price range for off-water, older homes that required significant updating and the market responded with a muffled, unenthusiastic, meh.

I don’t think the lake access inventory is going to stay limited for too long, but the lack of available inventory in each segment is causing a bit of gridlock for sellers that would-be move up buyers.  If you own a nice $600k cottage with a slip and you’re looking to upgrade to an entry level lakefront for $1.4MM, that’s really nice. But if you’re that seller who would be a buyer, you need something to buy. If you can’t find something to buy, then you’re not going to have something to sell, and if you’re not a seller then what am I doing here? This is the problem today, as each market needs a carrot waiting for it in the next market higher, and without that incentive to upgrade the market stalls. That’s what it feels like right now.

Linn Township is a wonderful municipality in which to own your lake house. The taxes are low, and without adjacent city-centers, the roads feel more rural, more quaint.  All of Linn Township functions on private well and septic (or holding tank), so that’s something to be aware of but it isn’t something to fear. I live in a home serviced by private well and septic and I’m almost entirely normal.  If you’re looking for a lake access home in Linn Township and your target association doesn’t have any open inventory today, please reach out to me and let me know what you’re looking for. I’ll go find it for you.