Blog : Congress Club

Lake Geneva Lakefront Market Update

Lake Geneva Lakefront Market Update

I read an article yesterday about slowing home sales in the Hamptons. Hamptons’ Homes See Double Digit Price Drop. Sounds terrible, unless you don’t care about the Northeast, which I don’t. In fact, I root against the Northeast as a general practice.  I read the entire article, but I didn’t really need to. The first graph told the story.

 

The softness in pricing was mainly due to an oversupply in the luxury market…The luxury inventory is still expanding, noting that there were 322 active listings during the last quarter, a 22.4% increase from a year ago. ~ Jonathan Miller, Douglas Elliman

Well then, that sort of takes the mystery out of it all, doesn’t it? Why is the market slowing? Oversupply. Why do my shorts get wet when I swim? Because of the water. News sorts like to look at localized headlines like these and paint a national segment with the same brush. Unfortunately, the real world doesn’t work that way.  But the article does bring up an interesting topic, that of supply. If supply is overwhelming the demand, we all know markets have to drop. Why will they drop? Because if there are 322 active listings in one segment, you can bet that at least 30 of those chowder eaters are going to want to sell, and they want to sell now. That puts downward pressure on the list prices, which results in lower sales prices, which results in Mansion Global running an article, which results in David Curry writing another article in the response to the article.

The month of October was again kind to the Lake Geneva upper bracket. Four lakefront homes sold last month, with many others heading under contract.  Today, there are just 17 true lakefront homes available on Geneva Lake (with private frontage). That means we have the opposite problem that afflicts the Hamptonites.  Though this will also cause our volume to shrink, even as our prices remain stable or increase.  The four sales on Geneva from this month are unique, in that three of the four had experienced elongated market time. Did the list prices soften or did the market rise to meet the seller demands? Both, sort of. Kind of.

A Congress Club cottage sold for $1.53MM. That house had been for sale for two years, on and off, and finally sold after a series of price reductions.  The property is not private frontage, rather it shares a wide swath of frontage with the other Congress Club cottages. It’s a unique set up, something that the market finds both appealing and strange.  This particular home sold for a similar number several years ago, effectively putting a cap on the prices in the Congress Club. Do people mind sharing frontage and sharing piers and having to abide by all sorts of rules? Yes. Do they mind as long as the price is mid $1s or lower? No.

Another old cottage, this one with 84′ of private frontage, sold recently. Main Street Lake Geneva is a location that the market didn’t used to find as appealing as it does today. The traffic, the noise, the scene, were mostly left off of buyer’s want lists until this most recent cycle. Now people like the action, they crave the scene, they tolerate the traffic. The house that sold was one that I had for sale a year or two ago. I failed to sell it, for similar dollars. But that wasn’t because I’m not good at selling things, it was just that the market has increased since then and the increase allowed the seller’s number to make some sense to a buyer. The home closed for $2.1MM and change.

In September, I wrote an offer for a client on a lakefront home in Cedar Point Park. The house was okay, not perfect, but okay. Our offer was followed by another offer, and when our reasonable offer was rebuffed, my buyer stepped out and the other buyer bought. $2,775,000 was the closing price for a modest home on the hill in Cedar Point. I thought this to be a high number, but that’s just like, my opinion, man.  This property sold in 2004 for $2,025,000, again in 2009 for $2,575,000, and now in 2017 for $2,775,000.

Lastly, a sale near the Lake Geneva Country Club for $2.85MM. This home had been for sale for what felt like my entire life, though I’m sure that’s not accurate. The house was nice enough, the 125′ of frontage, good enough. But the house was plagued by a location next to the LGCC maintenance building and paddle courts. The market didn’t love these conditions, but as with any lakefront sale, these are each unique and certain buyers prioritize amenities and detriments differently. I’ve sold lots of homes that the broad market didn’t love, but when you find the perfect buyer their perfect house, deals happen. In the context of price per front foot, this sale was the most affordable of the other three private lakefronts to have closed recently, so that’s worth something.

If the market is expected to slow, 3% GDP, all-time index highs, and low inventory aren’t the conditions that will lead to that slowdown. Will the possible elimination of itemized deductions hurt us, as the Crain’s Chicago Business article this week claimed? Maybe, but I don’t think so. Buyers aren’t here because they’re combing over every last dollar. They’re here because they love it, because it means something to them, because it means something to their families. They’re here because they want to be, and they keep coming even when the price of admission is on the rise.

 

Above, my new listing at 434 Oakwood in Fontana. $1.295MM for so much perfection.
Lake Geneva Market Update

Lake Geneva Market Update

I have lots of brushes. I have small brushes and smaller brushes, medium ones, too. I have huge brushes, trust me, there’s no problem with my brushes. I have great brushes, the best. Other people, not so many brushes, sad. But still, these brushes of mine are varied and I store them not in a wide-mouthed jar labeled BRUSHES, THE BEST, but in my mind. These aren’t real brushes, you see, they’re just the sort of brushes that I use to paint these insights into this market. I use them as I attempt to explain what’s going on here, what you’re part of or what you’re missing out on. If you want to know about my brushes, I assure you there’s no problem. Today, let’s use the yugest brush I have. Let’s talk macro. Other agents can’t use this brush, it’s too big. Sad!

The market today is active. Across the board, active. My development loving friends will say, A HA!, but when the new development market is active that just means there’s a single house being built in that empty subdivision behind Reek School, which means there will be four homes there. Out of 35 total lots. So, no, the development lovers out there are still out of luck even though the market has reached some form of normalcy and activity is widespread. The primary home market is buzzing. A quick glance at neighborhood and towns that I don’t deal with shows an incredible amount of sales activity in the $90k to $250k range, so let’s be happy for that but let’s not be too excited because the primary market here means very little to the vacation home market.

The entry level lake access market on Geneva is performing wonderfully this year. Five of the 23 lake access homes priced under $400k are pending as of this morning. I’m sure there are others that aren’t properly labeled in the MLS. Six of the 34 lake access homes priced from $400k to $1MM are pending as well. That’s not a tremendous number of pendings in that segment, but it’s not terrible.  The market is lacking inventory of homes with boatslips in the  $450k to $850k range, so if you’re a buyer looking for something like that I feel your dissatisfaction. If you’re a seller who owns something like that, let’s talk about it. Overall, there’s a high degree of buyer activity in that range but mostly boring inventory that has been on the market for quite some time. What we could use is some new inventory in Oak Shores, Lake Geneva Club, Shore Haven, and the likes.

The co-op market on the lake has been quiet of late. There’s a single home available in the Congress Club, though that home is priced more like lakefront than association, so it’s a bit outside the bounds of what a typical co-op buyer seeking out inventory in the Harvard Club, Belvedere Park, and the Congress Club might be hoping to find. The other associations haven’t a single available property, though there may be one coming back on in Belvedere Park soonish. The Harvard Club had a private sale last year, so that’s good for them. Remember, if you’re a buyer hoping to find something in one of these clubs, you’d be wise to let me know so I can try to free something up for you. I’m the leading broker in these co-ops over the past seven years, so no one has the inside track like I do if we’re talking co-ops at Lake Geneva.

Last year at this time, the entry level lakefront market was chock full of inventory. Today, that inventory has sold off. There are just two true lakefront homes on the market under $2MM this morning, and that’s a rather shocking situation.  The lowest price lakefront is my listing for $1.475MM on Lakeview in Linn Township, that super-cute cottage owning 50 feet of frontage, a traditional H-slip canopied pier, and a rare boathouse at the water’s edge. The only other home with private frontage under $2MM is on the tippy top of Cedar Point, that listed just under $1.6MM.  This development is good news for listings like my one-off lakefront on South Lakeshore Drive listed for $1.395MM (photo above). That’s a home that plays like lakefront, but isn’t technically lakefront, though you’d be forgiven for repeatedly assuming it is. That’s a home that I feel is poised to sell really right at the moment, so a buyer looking for lakeside fun would be keen to consider that property.

The rest of the market is somewhat interesting. This morning the MLS shows just two lakefront homes pending sale, and both of those are to buyers that I’m extremely happy to represent. Both properties are on Lackey Lane, so there’s just one Lackey Lane opportunity left. The market has some offers being considered, and there are properties that are the object of much attention (my new listing at 976 South Lakeshore, for one), so I’d expect something to pop in the next month or two and we’ll see several more lakefront contracts come together. Last year the lakefront market was very slow until mid summer and then finished with a remarkable flurry that saw our lakefront sold numbers push to record highs. That’s volume, not prices, so if you’re of the “it’s too expensive already so I missed out” opinion, then you’re not looking at the right information.

With that, my brushing is complete. I will return my brushes to their storage container, which I promise you is the best. There’s no problem with my figurative brushes and their figurative storage container. The losers who suggest there’s a problem are just jealous of my many different brushes. Sad!