Blog : Cedar Point Park

Geneva Lakefront Market Update

Geneva Lakefront Market Update

I almost bought a car in December. It was late December. The snow was falling and it was cold and it had been Christmas but it wasn’t yet the new year. I drove to the dealership, took a ride in the car that I was thinking of buying, and then sat in the chair across from the salesman for what felt like two hours. It felt that way because it was that way, and I sat and thought and looked around and thought some more. I wasn’t sure what to do.  The deal was in place, the trade on my car negotiated, the new vehicle ready and able and if I just said yes I would have driven it home. My children would have looked it over with great admiration, and my wife would have told me how superficial and horrible I was. Things were so close.

But I couldn’t do it, not then, and not in the days since, because I have commitment problems as it relates to cars. I dislike purchases that depreciate rapidly, which is also why I’m a solid $30  chicken dinner guy even when I kind of want the $62 ribeye. I drove from that car dealer and emailed the salesman the next day to work on a few final tweaks of our possible deal. The car, I was told, had sold.  I spend hours, no days, weeks contemplating most purchases, no matter how seemingly trivial they might be.  Although I am an alpha consumer, I’m reluctant.

This is a fine way to be, assuming you don’t want to secure something that might be fleeting. Just a week ago I wrote a bit on the state of the lakefront market. I was considering the pending sales on the lake and the market reaction to new inventory that had been slowly trickling on. My theory was that a market can be better gauged by the reaction, either swift or slow, to new inventory than it can be by the absorption of the old inventory. Since then, two things have occurred that have cemented my opinion of this market.

I listed that small lakefront with 60′ of level frontage a couple of weeks ago. Within a week, I had it under contract.  Last week, an odd lakefront came to market in the mid $3s, and it didn’t even last a week before a buyer put it under contract. These are the two newest lakefront additions, both unique in their own way, both under contract within mere days of listing. If you’re wondering about the state of our lakefront market,  these sales should help you understand just what you’re up against.

There are motivated buyers aplenty. More now than I think I can ever remember. There are buyers for entry level and buyers for large estates. There are buyers for land and buyers for finish, there are those who want to find value and those who just want to find a shiny marble shower. The market has plenty of matches, we just need some kindling. If you’re a buyer who, like me, finds it difficult to make a decision in any reasonable amount of time, this market is not going to be easy for you. But if you’re a buyer who knows what you want, and you trust your agent (that’s me) to guide you to lasting value, then it’s time to act. Inventory will be coming to market, but you need to get early eyes on it if you’re going to have a shot. Want to know what’s going on before the rest of the market?  Tell me what you’re looking for and you’ll be in the know before some automated MLS feed spits the listing your way.

Williams Bay Lake Access Market Review

Williams Bay Lake Access Market Review

When a buyer finds his way to Lake Geneva and begins to search for a suitable lake house, he tends to do lots of things wrong. He tends to see Glenwood Springs and think it’s just like Cedar Point Park, or he sees the Loch Vista Club and assumes it’s the same as Sybil Lane. Lake access is lake access, after all, and when you’re just up the road a ways from the lake it doesn’t matter what lane you’re walking. This is a mistake, but you can’t blame our home seeker for his folly. It’s not easy to understand this market, unless you’re just looking for some house on some street, then, by all means, wander away. Or worse yet, stop at an open house and work with that agent who shoved the sign into the snow bank.

The associations that surround this lake operate heavily on nuance, and it’s that nuance that confuses and distracts would-be buyers. Shouldn’t a house in Cedar Point be valued the same as a house in Country Club Estates? These two associations are, after all, the most similar of the large lake access associations, and so it makes sense that a home just up the street from the lake on Shabonna would be worth the same as one just up the street on Glenview.  Our buyer, with his obvious knowledge, wanders up Shabbona and finds a house for sale at $1.5MM, then he wanders up Glenview and finds one for $389k. Things are not adding up.

That’s because of the nuance, of the desirability of one place that might be somehow greater than the other place, even though at first blush the markets look the same. Shabbona homes don’t have boatslips just as Glenview homes lack them. But Shabbona has a harbor adjacent and Big Foot Country Club up the road, and all Glenview has is a beach nearby and Kishwauketoe trails.  That’s why the market behaves differently, because of those things that are not readily noticed. Today, I want to begin a few association specific 2016 market reviews to help better explain these nuanced differences. I won’t spend a day on each association, rather I’m going to dissect these associations into municipality groupings. First up, Williams Bay, because I’m from here and I’m sitting here now and it just seems appropriate to put my town first.

The lake access associatons in Williams Bay proper include only these few: Cedar Point Park, Summer Haven, Oakwood Estates, Loch Vista Club, and Dartmouth Woods. Because Dartmouth Woods is a lakefront association that finds membership in our lakefront segment, we’ll skip that for now. The lake access market, though made up of four associations, is dominated by one: Cedar Point Park. That’s because it’s huge, and it’s interesting, and it has the most diverse price points.  2016 provided sales as low as $142,800 and as high as $775k. The cheap sale was a remnant foreclosure, an REO that was an absolute mess of a house. I looked at it plenty, made an offer on it personally once, and decided that it was a house that was terminally hampered by the layout and overall design. The most expensive sale was on Oak Birch, and I liked that parkway cottage quite a bit. $775k for a cottage without a boatslip sounds like a lot of money, until you realize the setting was immensely special and the views comparable to any off-water view you could find.

In total, 16 homes sold in Cedar Point last year.  Three were over $750k, two of which were on a parkway. The parkways, as I should mention, are large grassy swaths that run from the lake and provide ample community lawn space for the association. If your home is located directly on a parkway, you’re in luck. It’s worth a lot of money, even for a home that doesn’t have a slip.  No homes in Cedar Point Park possess transferable boatlsips, in fact, no association home in any Williams Bay association can offer you a transferable boatslip. Keep that in mind.  Notable in Cedar Point last year was not the number of home sales, rather the low entry price of many of those sales. Nine of the 16 sales closed below $300k, proving that Cedar Point is a budget friendly option for anyone seeking a lake house in an old time association.

Nothing sold in Summer Haven last year, and nothing sold in Oakwood Estates. These two associations flank Pier 290 and Gage Marine, with Summer Haven to the North and Oakwood to the south. Both associations offer nice community piers, a private park, and some sparse parking. Summer Haven has a sand beach, making it one of very few associations on Geneva to lay claim to a sandy patch of frontage.  Of the two, Oakwood Estates is the more valuable, mostly because the lakeside aesthetic is superior and the separation from Gage Marine is greater.

The Loch Vista Club is where I grew up. It’s where I will always feel at home. It’s the pier I learned to swim from, the pier my kids learned to swim from, the place I know better than all of the others.  It’s a quality little association, with two piers and a diving board. There are no transferable slips, and the guy next up on the boatslip waiting list first scribbled his name onto it in the 1970s. If you want a slip, the Loch Vista Club isn’t for you. But if you want an idyllic lake experience, it’s a winner. Typical sales prices range from $300k and up, and in 2016 two off-water homes printed. One for $495k and one for $584k. These two sales are important, as they’re actually quite high for off-water homes possessing no view and no slip.

In total, 18 lake access homes sold in Williams Bay during 2016. Four other vacation homes sold last year with private frontage.  The take away is that if you’re a lake house buying in the Bay, don’t buy a home that doesn’t possess lake rights. That is, those special access rights that afford an owner unique membership to a private lakefront park and pier system.  During the prior market peak buyers would routinely buy off-water homes that lacked lake access and treat them as lake homes. They did this because the lake access prices were so high that the non-access homes seemed cheap in comparison. Today, the lake access homes are still affordable, and if you’re looking to make a solid investment in a lake house you’d do well to consider one of these four associations. The available inventory is sparse, but there is still value available.

Above, my son on the Loch Vista Club diving board at sunset. 
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.

 

Lake Geneva Foreclosures

Lake Geneva Foreclosures

Lake Geneva Foreclosures. Those three words were types into search engines with terrifying frequency over the last decade. In the early part of the past decade, the 2006 part, those words were typed because buyers were looking for deals. They were looking for anything that wasn’t on the market, something rare, something unique, something in trouble that might spell opportunity. In the middle part of the past decade, those years of 2009 through 2013, the words were typed more solemnly, with purpose and diligence, seeking still opportunity. And now, the words are typed, but it’s half hearted, well intentioned but wishing more than expecting. There might be some foreclosures still lurking, but there probably aren’t. Still, the words are typed, Lake Geneva Foreclosures, hoping something might still be out there, something that the rest of the market hasn’t been paying attention to.

That’s why I’m here, fighting through this wretched head cold, scouring the lis pendens filings and the sheriff’s sale notices.  In an effort to make this somewhat concise, I kept my sensitive eyes peeled for signs of foreclosure activity in our most foreclosure prone associations. I don’t see a single unit in Geneva National pending foreclosure, according to recent LP filings. I also don’t see anything at GN scheduled for a sheriff’s sale. In the MLS, Geneva National has one short sale listed and one REO, that of a $150k type condo that doesn’t appear to me to be any particular form of value. Geneva National seems to have made it to 2016 damaged but unbroken by the foreclosure trouble that had plagued it from 2009 through 2014. The market has sufficiently absorbed most of the trouble there, though I’d still be keen to avoid newer enclaves so I don’t face a Foxwood type situation. Foxwood, for the uninitiated, was the latest and greatest thing in GN, a beautiful enclave of higher end homes and duplexes. And then the developer lost the project and all of the unfinished lots and now it’s in limbo. It’ll come back, sure, as a newer, better thing,  but we all know it won’t be.

Abbey Springs doesn’t have any foreclosure issues, which continues to amaze and impress me. Abbey Springs combines relatively high association dues with price points that range from the mid $100s to $1MM. That association is large (592 units), and it seems to me that some of those owners would have run into a bit of financial trouble over recent years. Alas, that has proven to not be the case, and Abbey Springs scoffs at your foreclosure interests. Country Club Estates has one sheriff’s sale pending, and that’s of our old friend on Shabonna that has been in and out of foreclosure trouble for as long as I can remember. As an owner, I’d imagine this sort of thing is exhausting. I once fought with Aurora Healthcare over an egregious medical invoice and after like a month of battle, I caved and paid the extortion. I can’t imagine the effort required to continually fight with a bank over a house.

With that theme in mind, the foreclosure in Williams Bay on Conference Point is still there. Still. There. It’s been years, or decades, maybe my entire lifetime, and it’s still there, still on the market, still listed as a Short Sale. I’m sure it still attracts the attention of the uninitiated, because it’s so much house in such a nice spot for a reasonable sum of money. Maybe someday that home will sell, but had we been holding our breath waiting for that day we’d all be thoroughly and completely dead. The same goes for the foreclosure that’s been on and off in Loramoor. It’s no longer worth thinking about. There’s an REO in Cedar Point Park that’s pending sale in the mid $100s, and that’s a home that I once made a personal bid on before realizing that the home, even with a substation renovation, will still be odd, still weird, still unloved by the market.

The IRS seizure of a lakefront house to the East of Cedar Point is still hanging out there, as best I can tell, still awaiting its turn on the IRS auction block. If you’re interested in this property, let me know and I’ll keep you posted on the progress of this interesting spectacle. All in all, there’s very little going on in our foreclosure market.  In 2012, Walworth County had one single family foreclosure sale every 1.3 days. In 2016, we’ve averaged one sale every 3.85 days.  Of those sales this year, the most expensive closed for $210,000, so it’s fairly obvious what sorts of properties remain sensitive to default.

If you fear you missed out on the foreclosure crisis and the buying opportunity that it sometimes presented, don’t fret. I saw several commercials over the weekend (On Wisconsin!) for Rocket Mortgage. Looks to me like you just punch in some numbers on your phone and then you get a mortgage, which sounds completely and entirely fantastic.  If Rocket Mortgage and their algorithms turn you down, you can then check with Sofi, which is another company making loans super duper easy. Or, if you’d like to go the stringent, more traditional route, FHA will still lend you 96.5% of the purchase price, assuming you have a rock solid credit score of at least 580.  So don’t feel left out, it won’t be too many more years before there’s a new foreclosure crisis waiting for cash buyers.

Lake Geneva Market Pricing

Lake Geneva Market Pricing

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

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

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

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

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

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

Lake Geneva YTD Performance

Lake Geneva YTD Performance

The year is young now, but not so young that we can’t judge it.  One year old children are young, so young that we shouldn’t judge them. But two year olds? Judge away. The market is now in its second month, and with a lifespan of only 12, our market is as a 7 year old, and we know very well that we can judge 7 year olds. If a kid is fantastically smart and sweet as a 7 year old, chances are that behavior will stick through his or her life. If the 7 year old is horrible, mean and ornery, we can, sadly, assume that this 7 year old will grow to be a horrible, mean and ornery adult.  The 2016 Lake Geneva real estate market is old enough now that we must judge it.

January was not a kind month to my biotech heavy portfolio, in fact, it was ruthless and homicidal. The year started with big index declines, and continued in this most miserable lower for longer pattern. The good news might be that the bottom seems to have held for now, so buyers have not been scared away in the same way that they would have if we remained in that free fall. Most segments are doing just fine today, with individual markets performing better than others. Remember, cheap oil means your portfolio looks awful and you won’t be retiring on time,  but never underestimate the life affirming power of $1.49 gasoline.

I had a closing last month in Geneva National. GN, as you may recall, had a fantastic 2015. The carry over has not yet been evident. Today, GN has the rare condition of owning 71 market offerings (single family and condominium) but not a single showing as under contract. I have little doubt that something is under contract there, but the MLS isn’t yet reflecting that. That’s rare, that’s odd, and it’s not good. Sellers in GN who entered 2016 thinking that things have been completely healed should rethink that supposition. The market is better, yes, but if a particular seller has not yet succumbed to the pricing realities that cemented in 2015, then don’t expect buyers to be rewarding GN with liquidity in the way they did last year. GN, pay attention and don’t get smug just yet. YTD Grade: D

Abbey Springs has somewhat high inventory at the moment, with 36 offerings. The good news for AS is that they also have at least five of those properties under contract. If GN boasted a similar ratio, we’d see 10 GN properties under market at the moment and everyone would proclaim the market as hot, hot, hot (Disclaimer: Many agents do this regardless).  Abbey Springs has just one single family home under contract, that of a reasonably nice home on Saint Andrews listed at $699k. It’ll be interesting to see if 2016 delivers some upper bracket buyers in Abbey Springs. That didn’t happen in 2015, but we’ll see if ample inventory provides a few of those rare $800k+ buyers to Abbey Springs. YTD Grade: A-

The lakefront condo market on Geneva has, since its heyday of 1998-2006,  stalled. Spurts of volume here and there do not heal a market particularly well. But alas, prices in this segment never cratered in the way that the residential lakefront market did, which always perplexed me. If you’ll remember back then, I was perpetually wondering why there weren’t more foreclosures in the lakefront condo segment. I was happy there weren’t, but still surprised. Today the lakefront market has some nice movement, with a bit of aged inventory in Fontana Shores under contract and a townhouse in Somerset that just closed this morning for $725k. Inventory remains light in this segment, which is good. The lakefront condo market chokes on inventory. So far, so good. YTD Grade: B

The lake access market surrounding Geneva is off to a quick start, with five properties pending sale today. A few new ones- a contract with buyer of mine on a Glenwood Springs property, and a new contract on an off-water home in Cedar Point. That home is listed for $825k. It’s a charming home, but off-water with no slip and a somewhat limited cottage design. It had sold previously in 2007 for $1.15MM. That was a peak price, and then some. Other pending properties are in the lower reaches, including on in Indian Hills in the $400s, and three more under $250k in Country Club Estates and Cedar Point Park. YTD Grade: B

Lastly, the king, the lakefront market itself. Inventory is tragically low, with just 23 true lakefront homes listed (and four vacant lots, including two that are my listings- Loramoor $2.34MM and North Shore Drive $4.475MM). Of those 23, six have contracts. That’s really quite remarkable, so let that sink in for a bit. Out of 600 or so lakefronts on Geneva, just 17 homes are for sale. If you think you’ve found an exclusive market somewhere in some mountain town, I assure you we belly laugh at your exclusivity. Pending today is the small odd home in Knollwood ($1.125MM). That home is proof that if you just wait forever and keep dropping your price, you’ll sell. Dartmouth Woods is pending ($1.35MM), and that’s a nice little place that I like quiet a bit. A newer build on LaGrange is pending just over $2MM. If you don’t know the house, it’s the one that sits in the shadow of Vista Del Lago.

Bonnie Brae has a pending sale in the low $2s, and once that closes we’ll have seen a rather significant turn over on that Snake Road street. In the past several years, the market has closed three other lakefronts on that short road, with this pending ranch about to become the fourth. That’s nice to see, as new owners generally undertake some level of beautification of the home, and the market benefits.  In the upper reaches, the old brick home in Williams Bay formerly known as Towering Elms (until Dutch Elm Disease killed them all) is pending with a $3.85MM ask. Expect that home to be knocked down once closed. Finally, I have my sale on Lackey Lane in the mid $4s pending to  buyer whom I’m proud to represent.  YTD Grade: A-

One small lakefront closed last month, that of the skinny lot on Outing, just to the West of George Williams. For $800k, a buyer snuck onto the lake. It’s a curious property sure, but it’s $800k and that, is that. The lakefront market won’t be making an encore of the 2015 volume totals if this inventory stays low.  I have some exciting lakefronts coming to market in the near future, and I expect other agents have their own off-market properties on their radars.  The South Shore Club continues to be absent a single offering, which means that club won’t be lending too much to our inventory totals unless there’s a sudden influx of inventory, which I’m betting there won’t be.

For now, so far, so good. No after school tutoring or behavioral sessions necessary for our little seven year old.

 

It’s Lake Geneva’s Winterfest Weekend, so please do come to the lake if you like cool things, like snow sculptures. It’s a really great weekend. If you’re planning on waiting in line for brunch tomorrow, you can do so much better.

2015 Lake Geneva Lake Access Market Review

2015 Lake Geneva Lake Access Market Review

The real estate market in 2011 was pretty bad. It was fun, if bad, because sellers wanted to sell and buyers, though fewer than now, wanted to buy. It was a great year, and the Lake Geneva markets functioned as they should. Few buyers, few sellers, plenty of motivation for both sides. What’s not well understood now is that the market is no longer healing. It’s no longer mending. It’s no longer about to be something. It is something. It’s already there. It’s four full years into this new housing boom. To suggest that the recovery is somehow nascent is to either misunderstand the word or the markets, possibly both.

The lake access market on Geneva had a most terrific 2015.   2014 was similarly good, and in that year we sold 61 single family lake access homes near Geneva Lake. This year just ended we sold 70, making the good of 2014 look small and weak compared to the splendor of 2015. Both years saw activity in all segments, as the woes of individual off-lake segments have long been left in the dust of 2011 and 2012.   Both years experienced their share of anomalies, with 2014 printing a parkway home in the $1.5MM range and 2015 trading a Knollwood house for $2.2MM. Outliers they are, but still proof of a market truth: Shiny sells, if the implementer of the shiny is willing to take a bath on their shiny bad investment.

Proving that Lake Geneva can indeed be a market for the masses, we sold 17 lake access homes under $250k in 2015. I would have expected that number to be higher, as interest rates hovered at their lowest levels since Cain asked Abel for a short term loan to buy a very heavy rock, and this market should be especially sensitive to interest rates.  We sold another 48 lake access homes priced between $250k and $1MM.

Of interest in this meat and potato portion of our off-lake market is that two parkway homes in Cedar Point sold just under $1MM. For those who were not feverishly watching this market in the early and mid 2000s, you cannot appreciate the spectacle that is two parkway sales in one calendar year. For a while, during the escalation years of the prior cycle, Parkway homes were mythical. They were sometimes available, most of the time not. They were rare. To catch a glimpse of one on the open market was akin to a Yeti sighting, or to Tim Allen actually vacationing in Michigan. They were elusive, and they were desirable and the market loved them. That affection has returned, and prices up to and just over one million dollars is a reasonable ransom for such a rare property.

In that segment there are two other market tales, both sad tales, sure, but both telling an obvious market story. In 2007, a large log-ish home in Somerset came to market for $1.1MM. Two years later, it was raised to $1.295MM. The years that followed featured a vast array of For Sale signs in the front lawn, including a stint where my sign was there. The price dropped and dropped, as the market didn’t particularly enjoy an off-water home that lacked a slip but did possess a $20k property tax bill. In 2015, the home finally sold. For $600k. The heat of the last three years of bull market didn’t touch that property until last summer, and at $600k one could hardly suspect the transaction gave the seller any warm feelings.

Another sale that tells a similar story, but on the other side of the lake. It is no secret that the Lake Geneva Club is one of my favorite lake access associations. I like the street, I like the feel, I like the aesthetic. A home came to market there in 2007 for $829k, hoping to ride the coattails of a sale I had just closed for $790k in the same association. My sale was of a cottage one home from the lake, this offering was much, much farther away from that water epicenter.  This property came to market at various prices over recent years, on and off again, under contract at least once, then back to market after a failed deal. That home mercifully sold last summer for $500k. What was it likely worth in 2007 when it listed for $829k? Around $500k.  Medicine is often best taken quickly and without hesitation, because the longer you dwell on the smell and texture the less likely you will be to swallow it.

I’m not sure how I feel about 2016 in this segment. In theory,  market returns for 2015 will not make anyone feel particularly paper rich, especially if they went long TWTR with me in April. Interest rates will be rising, sure, but slowly, and anyone with any historical perspective will not be too upset by 4.75% interest rates. I expect the market to remain solid, and there will be outliers in 2016 just as there have been in recent years. Brokers love to whip markets into a frenzy, and all it takes is some shiny photographs of a Wolf stove and voila, some naive buyer will pay a lakefront price for a lake access home. Want to avoid that sort of amateurish buying behavior? Work with me, because I know the difference between an outlier and value.