Blog : Condominiums

Affordable Lake Geneva Vacation Homes

Affordable Lake Geneva Vacation Homes

Some would say that title is impossible. After all, load into a tour boat and take a trip around these shores and there’s very little that looks particularly affordable. Even the homes that look affordable come with seven figure asking prices, albeit low seven figures. Lake Geneva has historically been home to significant wealth, and the trend in recent years has only accelerated that status.  Several years ago a $10,000,000 home on this lake was viewed as a fortunate albatross.  It was neat, and lavish, but it didn’t make any particular sense, even for the wealthy. Today, a $10,000,000 home would be met with immediate buyer interest, as the liquidity that traditionally dried up around $5,000,000 now meets little resistance up to and through double that amount. Yes, Lake Geneva is for the wealthy, everyone knows that.

But that’s not where the story ends. Because Lake Geneva isn’t just for hedge fund managers and successful entrepreneurs. It’s for anyone who desires something different. It’s for everyone who wakes up on a Saturday morning in the summer and wonders what they’re going to do that day. It’s for those who are stuck in traffic on a Friday night, but not in the northbound lanes. It’s for those with the means to change their weekends and change their motivations, even if that doesn’t allow for a lakefront home or a lavish off-water spread.

Yes, you could buy a cottage in one of our area towns for $80k and use that for your summer house. That’s perfectly acceptable, and encouraged. But let’s assume you’re not looking to buy squalor. Let’s assume you want something easy, something low effort, something large enough to contain your family and/or friends in some form of luxury. If you’re thinking I’m going to suggest a tiny home, please read this bit on the folly of the tiny home. No, I’m suggesting a condo. A simple, easy, two or three bedroom condo. Something affordable. Something in the scene. Something that allows a weekend to be entirely and completely different from the 9-5. If you’re looking at Lake Geneva, as you should be, these condos have names and well defined price brackets. If you can spend $180-250k, you’re in luck. Lake Geneva has sensible, stylish options for you, too.

I’ve written about this particular segment often, because it deserves inclusion in any vacation home discussion. The condominiums that I find appealing in this segment include Abbey Hill, Abbey Villas, and Willabay. There are others, for sure, but these are the three that fit into this lower price point while still offering some meaningful value. When times were bad, these small condo associations were chock full of inventory. Too much inventory, some slight foreclosure activity, and overall malaise. Today, these complexes have recovered completely, and they offer some of the easiest value in our broad market. Let’s take a look at each one to see what’s happening.

Abbey Hill is perhaps my favorite. The complex isn’t right in town, like the Villas, but I appreciate the privacy. There’s a basic swimming pool and some nice topography here, all less than a mile from downtown Fontana. Today three units are available, priced from $199k to $255k. One of those three units is pending sale.  The condo fees at Abbey Hill are around $350 monthly, and taxes run around $3k annually. Factor in a 70% mortgage and you’re looking at a delightful vacation home for the cost of one long weekend rental at the Abbey Resort. Best of all, the units are all a bit tired, so a basic surface renovation can make a dramatic impact.

The Abbey Villas are adjacent the Abbey Resort on the harbor. That harbor is being renovated this off-season, so look forward to a beautiful new harbor (if there is such a thing) by next summer. The villas have a series of swimming pools, and are undeniably in the heart of the action. The beach, restaurants, and parks are all just a short walk from these units. Inventory swelled during the crisis, but today there are just two units available in the MLS, priced from $230-272k.  Some units here can sell into the $400s, if they are harbor front.  Taxes are similar to Abbey Hill, though assessments are a bit higher. Pets are not permitted here, so if you hate dogs and cats, you’re in luck.

In Williams Bay, Willabay fits into this particular segment. If you like being close to the water (short walk), but dislike the bustle of Fontana on a summer weekend, then Willabay might be a better fit. There’s a pool here and some tennis courts, all close to the Williams Bay lakefront and beach. There are five available units priced between $179-235k, with one unit pending sale. Taxes are similar to the Fontana units, and assessments are, on average, a bit lower than Abbey Hill. These units come with one car attached garages, as do most of the Abbey Hill units (the Villas lack garages).

If you love the Lake Geneva scene, and you’d like to be part of it, I’d gladly sell you a $5,000,000 lakefront house. I’d be happy to, really. But if that’s not in the budget, and a $200k condo near-ish the lake sounds more appealing, just let me know. You have solid options here, and I’m happy to guide you to the best value.

 

Geneva National Market Update

Geneva National Market Update

Ah, yes. Geneva National. The single greatest argument against Walworth County growth that I, or anyone, has ever made. Growth, it’s good, they say. It’s a necessity of life, like breathing and tacos. But it really isn’t. It might be good initially, for the mattress salesmen and the carpet installers, but over time, spurts of growth generally cannot be maintained in low population locations. There was a spurt of growth in a small town of Arena, Wisconsin. Perhaps it was Mazomanie. There’s a new commercial building on the main drag, shiny and bright. Vacant as vacant ever was. It’s for sale now, the restaurants long ago gone. Nothing there to take their place. Sure, growth dictated that the building initially be built, but the community lacks the ability to maintain the vestiges of that growth once the cycle slows. This is the problem with Geneva National.

When times are good, as they are now, things are fine. Things are never terrific, just fine. Today, Geneva National is fine. The inventory is low, which is the single best condition for GN. There are just 70 listed homes and condominiums. There are an additional 11 properties pending sale. All of this is good. What’s not so good for current owners and sellers is the pricing. Consider a little house on Saratoga. I lived on this street once. It’s a nice street. The house is listed at $599k and is pending sale. It’s the most expensive property in GN to be listed as pending sale this morning, which is a side- topic for a different paragraph. The house sold in 2007 for $750k. 10 years have passed, the market on the lake and near the water has recovered most, if not all of its losses from the past crisis, and yet Geneva National properties remain stuck.  Geneva National is struggling through the end of its lost decade.

But perhaps this is just anecdotal. Maybe it’s not all like this, right?  There’s a house on Edinborough pending sale. That’s a nice street, what a noble name. That house is listed at $347,500 and is under contract for a number that is, presumably, somewhere near that price. The house sold initially in 1995 for $375k. In 1995, lakefront homes on Geneva were selling in the $400-500k range. Those lakefront homes have appreciated 300% over the years, while Geneva National properties have found a way to decline over the same tenure.  Not good.

There are currently 11 homes listed for sale over $700k. That’s not a ton of inventory for a development this large, but it’s tough when not a single home in GN has closed (per MLS) over $600k all year. 44 homes and condos have closed this year in GN, outpacing the 38 sales YTD for 2016. That’s a good sign, but the weak performance at the top end, and the lack of appreciation at all segments is the issue here.  Last year, three homes sold over $600k, and even that was anemic. Does Geneva National offer a buyer a good value? Yes. Would I be a buyer in GN right now? Yes-ish.

I’d be a buyer of the condominiums in built enclaves. I’m not a buyer of something new in an unfinished section. This isn’t unique to Geneva National, this is my standard for any purchase, anywhere. Why buy into a segment that is possibly more sensitive to a  softening of the market? Why buy and leave your investment up to the future whims of the developer? I  like the idea of buying in stable segments with a pattern of sales that allows me to feel confident in my purchase. I want to buy something that cannot easily be replicated. Would I buy an existing house in GN right now? You bet I would. But I’d be looking for value in the sub-$550k price range, or over that I’d be considering homes that I can buy well below current replacement costs.

I love Geneva National. Because of this I want it to succeed. Sadly, the only way it will succeed is if future development stops and the existing inventory is absorbed. As long as GN keeps building new products, the existing products will find themselves in a tough spot. But growth is good, the simpletons scream.  They’re wrong, and Geneva National can prove it.

The Abbey’s Market Update

The Abbey’s Market Update

This summer, the activity in the single family market has been well documented. In fact, it’s been documented to death. Bludgeoned with exclamation marks. Cause of death? Overuse of hyperbole. But still, the market is hot and so we recognize that. We’re grateful for it. The thing is, each market is connected, each segment joined to the price range above and below it. Each style of property hinging somewhat on the performance and inventory in the adjacent market created by a different type of property.  If the vacation home segment of $250k single family homes is hot and low on inventory, then the vacation condo market in the same price range should be equally as hot, right?

The vacation condominium market is dominated here by the two large players- Abbey Springs and Geneva National. But these resort developments are so large they actually operate as their own individual markets, with little carry over from the single family market and other smaller condo developments. Strange as it may be, a $650k house in Geneva National does not benefit from the strength of the $650k lake access market. When I was a seller in GN I would always find reason to complain about this lack of  correlation. It felt unfair, but I learned to accept it and have only harbored resentment and bitterness ever since.

The two condo markets that would most directly benefit from the entry level lake access activity are the Abbey Villas and Abbey Hill. Both are in Fontana, where the heart of our lake access market resides.  This morning there are only two single family homes with lake access priced below $300k in Fontana. That’s an incredible drought of inventory, and at this date in July it’s unlikely the inventory deficit is corrected before the year ends. If the single family market in Fontana is starved of inventory, then the two condo markets that feature units under $300k should be hot, right?

Well, sort of. Abbey Hill has two available condo units this morning priced from $225-255k. There haven’t been any sales in Abbey Hill for 2017 (MLS), following a 2016 wherein two units closed.  Abbey Hill, for the uninitiated, is up the road a mile or so from the Fontana beach.  It’s an older condo complex that won’t win any particular architecture awards for the overall complex, but the individual units are quite interesting. I’ve long appreciated the Abbey Hill condominiums for their character, and I don’t expect that fondness to change anytime soon. The units are cool, and if I’m a buyer in the $200s looking for a lake-based weekend, I’m paying Abbey Hill a visit.

The other Fontana property that should be directly tied to the single family market is the Abbey Villa. This is not to be confused with the Abbey hotel condominiums, which are different and, in my opinion, not a good idea. The Abbey Villas have had some difficulty over the last market cycle, but today the recovery seems complete. Last year there were 10 sales in the Villas, closed between $165k and $255k. 2017 had has five closings YTD, all priced between $216k and $260k. There is currently just one unit available at the Villas, priced in the mid $200s. The Abbey Villas have completely and thoroughly recovered, and for that, we can all be pleased.

Two condo markets, both in Fontana, both tied directly to the single family vacation home market. Both performing quite well, as they should be. If you’re a buyer looking for a sub $300k lake home, consider these condos. Specifically, consider the Abbey Hill units. They’re affordable to own and I don’t think there’s a better value in the Fontana market. As always, let me know if I can help.

 

Fontana aerial courtesy Matt Mason Photography. 
Geneva National Market Update

Geneva National Market Update

I decided this morning that some market behavior has no choice but to flood over into different market segments. If, as we discussed last Friday, the primary home market is on fire below $350k, then the lake access and vacation home segment should be similarly torrid under that same mark. There’s no greater concentration of sub-$350k properties in the vacation home segment than in Geneva National, and so, as the theory goes, we should assume the market there is performing quiet well. Guess what? It is.

In Geneva National today, there are 80 MLS offerings of condominiums and single family homes (zoned condo). Of those 80, 12 are pending sale. Looking deeper, of those 12 pending properties, 10 are priced under $350k. This is a positive for Geneva National as much as it is a glaring negative. The condo market is doing just fine under that benchmark price, even though the prices are stagnant, but above that price Geneva National continues its decades long falter.

Of the 80 total homes and condos on the market, 39 of those are priced at or above $400k. Of those 39, just one is under contract today per the MLS. I’m not really worried about the homes in the $400-700k range within GN, as I think they will always have some relative liquidity in the market. The drag on those homes, as we’ve discussed, is the availability of loads of vacant lots and the incredibly low prices of many of those available lots. Why buy someone’s old house for $600k when you can build a new one for $575k?

On that subject, Geneva National would be wise to consider a revision of their condo declaration. I’m not attorney, so I’m not advocating as one, but I think GN could solve some of its vacant land inventory glut if they amended their declaration to allow property owners to purchase adjacent vacant lots and not pay the monthly assessment on those lots until they are sold by that owner or until a home is built. If I’m an owner in GN I might consider buying the lot next to me if it’s $25k, just because I’d like the privacy. But if I do that today I’m going to pay $300 or so per month in association dues, on top of the same amount I pay for my built house.  Because of this, I might shy away, but if I didn’t have the pay those additional dues, I might consider it. Eliminating the vacant lot inventory should be the goal of Geneva National, and this is one way to help accomplish that.

The biggest question for GN today awaits it at the top of the market. There are seven homes offered today priced over $1MM. These are nice homes, to be sure, and they likely couldn’t be built (at least some of them) for what they could be bought for, but there’s a problem here. The market in GN has closed three homes over $1MM since 2010.  That’s one home every two years, rounding down out of kindness.  Today GN has 14 years worth of $1MM+ inventory on its books. This is a bad thing, and I’m not sure how the market ever catches up to these heavier offerings if the housing market between $500k-$999k is still suffering as well.

So what do I like in Geneva National? I like the condos priced under $250k. I think they’re cheap, I think they can’t easily be replicated at those prices, and I like them for a vacation home seeker who doesn’t want to break the bank.  In spite of the unique difficulties facing Geneva National, I continue to think there’s nothing quite like it in our market, heck, in the Midwest, and for that reason it deserves consideration.

Geneva National Value

Geneva National Value

I’ve spent a fair amount of time this year in Geneva National. I’ve shown most of the houses that are on the market inside those gates. I’ve generally been underwhelmed.  Many of the houses are older now, in need of kitchens or baths, paint and trim. They have bright shiny brass this and oak that. They’re just not right anymore. Sellers have been a problem, too. They’ve been stubborn, acting like they haven’t a care in the world and that if this buyer fails to come up the minuscule 1.5% to match the seller’s number, well then the seller stands his ground and lets the deal fold. This has happened twice this year, and in both instances the offending seller is still offering his home for sale. Sellers are being foolish in GN, but this is mostly the situation for sellers of the single family homes. They’re unwilling to recognize that their 2006 valuations still have nothing to do with their 2016 valuations. But alas, Geneva National offers redemption.

And it isn’t found by way of the single family homes, it’s found in the lower priced condominiums. Those units at the Lakelands, the Woodlands, the Highlands, yes, the names are repitious and boring, painfully so, but there is value to be found. Consider the broad Lake Geneva vacation home market is, by my keen eye, still between 10-20% off the prior cycle highs. This number is the broad measure, as certain homes have appreciated beyond their highs, and other homes are still off as much as 30%.  Markets are unfair, and a rising tide might life all ships but the truth is that some ships are more buoyant than others. Some have leaks.  In Geneva National, the market has rebounded nicely, and 2015 booked a huge number of transactions, but still, value abounds.

A nice enough Woodland unit sold in 1992 for $119,900. That unit is available today for $136,900. It isn’t a stretch to assume the seller will lose net money on that sale, even after 24 years of ownership. Another Woodland unit sold for $219,900 in 2006, at what would have likely represent the peak for GN in the last cycle. The market in GN started fading before the rest of our market did, with a strange feeling starting in 2007. That same unit is offered today for $149k. Lest you think I’m a Woodland abuser, a Lakeland unit currently listed for $175k first sold for $200k. In 1992. That’s 24 years, a span where something on the lake might have appreciated 400%, and in GN, this unit is losing significant money after such a long period of ownership.

Why does this look bullish to me? Why would I not take the opposite approach and say that GN just can’t hold it together over a long period of time and as such should be avoided? Because of the market conditions that show us which sort of properties are being replaced. See, the reason I’m anti-development is because of what mass development does to the existing housing stock. If you own a $199k vinyl ranch in Elkhorn, congratulations. Your $199k vinyl ranch was likely $199k in 2000 and it’ll probably be $199k in 2020. That’s because they can keep building small $199k vinyl ranches on cheap farm land until the end of time. In Geneva National, they’re no longer building 3 bedroom 2 bath condominiums for $149k. The newer stock, excepting the complicated Cobblestone Court, is generally $250k and up. That’s because it doesn’t make much economic sense to try to flood the market with $169k brand new condominiums. And because of that, your $130-240k condo purchase in GN is likely a very good, rather safe, idea.

Yes, some of the older buildings are GN are subject to special assessments as they repair and replace the cedar siding that has given out over time. This is unfortunate, but it’s a fact of condominium life everywhere. The pure condo model wherein the owner pays a little bit of money each month into a collective fund so that when the roof needs to be replaced they have money; that’s a sweet, tender concept. But what actually happens in most cases is the owner pays in every month and then when  major capital project needs to be completed, the owner is special assessed to pay for it. In that, the condo model is dead. But as long as the condo buyer knows this in advance, it’s not the worst thing in the world. Most specials are amortized conveniently and will not represent too much hardship for the assessed owner.

So today, consider Geneva National. If you like the houses there, terrific, so do I. Except the brass and oak ones, most are offered at or below replacement value, giving little reason to consider a new build there as long as this overhang of housing stock exists. Look to the older condominiums, the ones that need some paint and trim work, and maybe some new counters and appliances. Those are the units that can be bought right, and those are the units that represent value even in this well performing market.

Abbey Springs Market Update

Abbey Springs Market Update

I don’t think I ever had cause to enter Abbey Springs before I was 18, maybe 19. As a kid, I surely knew Abbey Springs was there, over on that south shore that we didn’t dare take the Boston Whaler to, for fear that it was too far, too rough, to unknown. I didn’t have any friends who lived in Abbey Springs, so I would have never been to a birthday party or a sleepover inside those gates. I didn’t mow any lawns in Abbey Springs, mostly because the lawns there are primarily wood chips and an unkempt mix of poison ivy and buckthorn. And so it must have been, an entire childhood spent outside of Abbey Springs. Only when I started to play tennis was I attracted to this place, and I learned to play under my own tutelage inside that giant winter-time bubble they’d inflate over the courts. It was a treat to play, some phenomenon to know you were playing indoors in the winter, with just that thin bubble wall protecting you from the elements. What a thrill it was to shout out the score and have your opponent rarely hear it, the giant fan blowing and roaring to keep the tent warmish.

But that has nothing to do with this. Abbey Springs looks, from my eye, to be ready to yield value next month. The inventory is high, with forty available homes and condominiums, though far more of the latter. In fact, there are just eight single family homes available today. The market for single family homes in Abbey Springs was pretty slow over the spring and summer months, but late summer and fall proved active, and several homes, lead by my $746k sale on Saint Andrews, sold. Another listing on Saint Andrews was listed as pending, then listed as active, now showing as price reduced, so we’ll assume that either the listing office is dazzling us with their technology or the deal fell through and the home is now looking for a new buyer. Either way, the single family market is vibrant, and any buyer looking to steal a home in Abbey Springs will likely find themselves out of luck. Small condo buyers on the other hand have a distinct buying opportunity forming.

That’s because there’s a glut of condo inventory in Abbey Springs right now. Traditional inventory isn’t nearly this high, and because we’re the smart ones we know that ample inventory in a very specific segment can lead to falling prices. As of this writing, there are 25 condominiums listed in Abbey Springs under $300k. That’s a lot of inventory, and buyers can tactfully pit those owners against each other. Many of those sellers won’t be in a huge rush to sell. They’ll just sit until they sell, because that’s how real estate works. But if we have 25 sellers, we must have 5 of them that really would like to sell before the snow flies. That’s why a smart buyer in search of an entry level lake access condo would do very well to weed through the inventory and find those sellers that truly want to sell.

That’s really all I have to say about Abbey Springs this morning. The bubble bit and the fact that you could come up and steal a small condo with me next month. The other interesting market news of the week is a major price shift at Lakewood Estates Golf Club. This is the development that I wrote about on these pages earlier this year. It’s a small, gated enclave of higher end homes that ring a private lake and share access to a private, member’s only golf club. It’s an extremely unique property, and as with most extremely unique properties in Lake Geneva, it didn’t capture the attention of the market, even after my glowing review. With that market reaction in mind, the seller of these properties just dramatically reduced the asking prices, lopping $200k or so off of every available parcel. A development that was originally priced in the mid $400s and up can now be had from the mid $200s. This matters, and this should make a huge difference to anyone looking for a second home in the country. As with every property I represent, if you’d like more details and a private tour, all you have to do is ask.

The news last night said that Lake Geneva is now past our peak fall colors. I say bunk. That’s not the case at all, it’s just that there are equal amounts of fall colors in the trees as on the ground. Take a drive up to the lake this weekend, crunch some leaves. Walk the path. Enjoy fall because October has been an incredible month but it’s just about over.