Blog : Golf Courses

2017 Geneva National Market Review

2017 Geneva National Market Review

Do people still golf? It seems to me that they do, even though I don’t. Previously, I enjoyed golf. I enjoyed getting to the course a bit early and hitting some range balls. I enjoyed a sandwich on the patio. I enjoyed the scramble for par, the thrill of a birdie. I once almost had a hole-in-one and that was almost super fun. But the game of golf no longer fits into my ideal day. I enjoy it still, if the course is green and the company prime, it’s a nice way to spend a morning, or an afternoon, or an entire day. But increasingly, my schedule doesn’t allow for a long round on the links, and when time does allow my distractions have taken other forms. Still, I used to like golf and I understand why other people still do. Geneva National has some incredible golf courses, but you needn’t love golf to consider ownership there.

This has come up often in my long history of Geneva National sales. New buyer asks for nice vacation condo at the lake. New buyer doesn’t want to spend lakefront money, and new buyer doesn’t want to buy one of our standard issue two or three bedroom, 1200-1500 square foot off-water condo units. I suggest Geneva National, knowing that there’s tremendous bang for the buck inside those gates. Buyer says she doesn’t golf. This is the Geneva National flaw, the common refrain, the reason some people dismiss this place without ever considering it. News Flash: You needn’t have a desire to golf in order to live in Geneva National. If you hate manicured lawns and rolling, forested terrain, then you should hate Geneva National. But if you like those things and you hate golf, then you should like GN. It’s really that simple.

Geneva National is huge. It’s a monstrosity in our small overall market.  That size is what makes it so susceptible to momentum swings. Those market swings have occurred with some frequency since GN first bulldozed their first roadway sometime around 1990. The good news is that the last several years have featured a solid combination of strong sales and diminishing inventory, and that recent trend continued throughout 2017. For the year just ended, GN closed 84 single family and condominium units. More likely sold- private sales, direct from builder sales, and new construction. But the MLS number is 84.  There were 71 sales in 2016 and 82 in 2015. The market strength today is obvious, and the trend supportive of a strong market. But GN isn’t without an issue.

The top end in Geneva National is remarkably weak. Consider in 2017 just two homes sold for more than $560k, and the top sale registered $750k. In 2016, there were four sales over $560k, and the top end printed $795k. 2015 closed six over $560k, with the top at $1.050MM. Now that you understand the pricing history, look to the active inventory. While there are just 43 active homes and condominiums (four more pending), there are five properties priced over $1MM.  Given the last three years of history produced just one sale over the million dollar mark, Geneva National currently has 15 years of upper bracket inventory on its books. If I’m a seller in GN and I’m looking for a number north of one million dollars, I’m not pleased.

The issues that plague the housing stock in GN are varied, but all come down to dollars and cents. GN still has ample vacant parcel inventory. Currently, 44 vacant parcels are listed for sale. Many more exist off-market.  Last year, 10 vacant lots sold. Of those 10, six sold for $13k or less. For all of 2016, the MLS registered two vacant lot sales in GN.   Geneva National has lots of vacant inventory, and a housing stock that is aging. It might come as a surprise to some owners, but a house built 15 years ago needs to be remodeled already. A 20 year old house definitely needs to be remodeled. And sadly, your eight year old house likely needs some refreshing. The problem with existing inventory in GN is that it cannot compete with the availability of easily sourced vacant parcels.  If you’re a buyer in GN seeking single family and you like a vacant lot listed at $50k, are you going to hire a builder to construct a $650k home for you (one where you get to pick the colors and materials and design), or are you going to go shopping for a 15 year old house that looks like it needs a new roof?

That’s why the single family market in GN is difficult and may remain difficult for a while. The association should do everything in its power to eliminate vacant inventory, and the easiest, most simple way to encourage that absorption is by allowing existing homes to buy vacant, neighboring parcels and be allowed to own those without incurring another monthly association fee. If the association enacted this policy, perhaps more vacant inventory would be removed from the market, and that would be the start of price appreciation for the single family homes. Until then, or until the market slowly absorbs this inventory, expect stagnation.

The condominium market in GN is much healthier at the moment, and I’d expect the low inventory to benefit this segment especially.  If you’re a buyer looking to spend $150-350k on a vacation home in the Lake Geneva market, I cannot see a better option for large square footage at a discounted price.  While the property feels like a country club, you can either enjoy it as such or just enjoy it for the natural beauty it so easily displays.  Just remember, if you hate golf, Geneva National might be perfect for you.

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.

Golf Lake Geneva

Golf Lake Geneva

I haven’t cared about golf for a long time. To be honest, I never particularly cared about golf. I was on the golf team in high school, which, at first blush, might sound like I was a reasonably good golfer then. The truth is the Faith Christian School golf team didn’t have any barrier to admission. If you owned a set of clubs, or felt like using a set borrowed from one of the teachers who liked to golf for free and was, as a result, labeled the golf coach; then you were on the team.  At the start of one match, I teed off on the 10th hole of George Williams and ripped the drive straight down the middle.  My opponent acknowledged my immense skill, to which I replied in a golfing sort of way, “that’ll probably be the only good one I hit all day”. It was.

Into my twenties I played some golf. At one point in time, I counted myself as a good enough player. The summer I twice shot 80 was the summer I hurt my back, and just like that, my golf career was over.  I still play from time to time, and I still think I might have a shot at being decent if I were to practice, but interests have pulled me in different directions now. Those different directions didn’t stop me from flipping to the last few holes of yesterday’s Masters finish, and what a finish it was. I felt genuinely pleased for Sergio. I felt somewhat strange watching the announcers handle him as though he was a washed up old veteran who had finally broken his personal curse. I felt that way because at his old age he’s younger than me.

And that finish got me to thinking about golf again, about the courses and the options and the Lake Geneva golfing scene. There are plenty of reviews of local courses available. I’m sure you can read all about slopes and handicaps and the like, but this isn’t like that. This is the abridged version of local golf as seen through these two eyes, and as experienced by this one-time-marginally-proficient-golfer.

In my mind, the king of the local golf courses is Geneva National. It doesn’t matter which of the three courses it is; this is the best golf in the area. The Player course is the most scenic and involves the fewest number of houses. Trevino is the easiest of the three. I once teed off on a Trevino par three. There was a group just leaving the green who had stopped to watch my shot. There was another group behind my group, watching. The pressure was on. I gripped the eight iron and swung. Clean. Beautiful. High. It looked good, like it might go in. When the ball landed on the green and rolled towards the hole the green-side group through up their arms and hollered in celebration. A hole in one! At least it seemed like that was the case, until I walked up and the ball was three or four feet from the hole. The green-side group must have been more easily triggered to celebrate than most.  The Palmer course is nice, but I despise the finishing few holes. Geneva National is the king. If you want high quality golf, play here.

The Grand Geneva would beg to differ with that prior opinion, as their Brute and Highlands courses are indeed very, very nice. But the Brute from the tips is just awful, a terribly difficult endeavor suited for truly great players. The Highlands has some spongey, swampy holes that I don’t like. I played the Grand Geneva often when I had a good friend who was the tennis pro there. We’d play and he’d beat me and I’d realize how much I hate the game of golf. The Grand Geneva is worth playing, and you may like it, but I don’t.

Abbey Springs is a curious little course. I don’t think it gets the respect that it deserves. Yes, it’s short. Yes, the driving range is short. Yes, there are condominiums and houses throughout the course. But it is a beautiful track, capable of flustering the best golfer. There are views of Geneva Lake, wonderfully manicured fairways and greens, and if you own a lake house in the Bay or Fontana, it’s right next door. I dislike the layout of a few holes, but when you’re tucking a golf course into a residential development, creativity can suffer. Still, play Abbey Springs and be happy you did.

In Delavan, you’ll find Delbrook Golf Course. I’ve never played there. But I drive by it sometimes and I think about how some golfer apparently killed a turtle with his club and I cringe. What a terrible thing to do to a turtle. I’ll never play Delbrook, but I’m sure it’s just fine. Evergreen Golf Course in Elkhorn is where we played some high school matches. It has some ponds with bass in them. I’ve fished for the bass before, but I don’t remember the course. It’s green and there are some flags. It’s fine, probably.

Hawk’s View still feels like a new course to me, though it’s been here for nearly two decades. In the 1960s, this was Mount Fuji, a ski hill that really was just a hill. Now the beautiful grounds host an 18 hole par 72 course and an 18 hole par 3 course. The par 3 course is ranked as one of the top ten in America, according to someone. Hawk’s view is well maintained, close to Lake Geneva, and it’s more affordable than the larger courses in the area. A Saturday round in July will run you $85, while the same round will go for $115 at Geneva National. The Par 3 at Hawk’s View is very nice, and comes highly recommended if you’re playing with a kid, or you’re just crunched for time. I haven’t played that course in a few years, but I just talked myself into it.

Obviously we have private courses in the area- The Lake Geneva Country Club, Big Foot Country Club, and Lakewood. But these aren’t the topic for today. I’ve played all three courses, and they each offer something unique, but today isn’t about the country club set. It’s about people like me, people like you, people that like to golf but haven’t made it their obsession. This summer, play a bit of golf. If you’re at all like me, it’ll remind you of the reasons you no longer play.