Blog : Just Sold

Bluff Lane Sells

Bluff Lane Sells

Bluff Lane is a nice little dead end street on the south shore of the lake. In spite of its small nature, this street has been a near constant source of inventory for our market over the last several years.  My listing at N1939 Bluff has been for sale since the middle of 2017, first with another broker and then with me. It was a nice house, offering the sorts of things that most similarly priced houses in the 2018 market just can’t offer. In that, the house was complete. Five bedrooms, three finished levels, 70+ feet of frontage, a huge pier, perfectly landscaped grounds and a two car garage.  I closed this listing last Friday for $1,950,000, but like all sales, there’s a bit of a lesson here.

When the property was first introduced to the market in the spring of 2017, the price was $2,295,000. That seemed a fair target for a house that offers so much by way of living space and amenities. The market was interested, but after several months the property failed to sell. There was at least one offer during that listing, maybe more. Then, I took over for the prior broker and put my angle on the listing. Another offer, but no dice. The price was adjusted downward in small increments. Then, this fall, another offer. A contract. But that deal failed to close. Finally, a new offer from a new buyer who saw the value in this property, but only at a price that made sense to him.

After 16 months of marketing effort, the property sold for $1.95MM. That’s no unique surprise, since several of the other offers that were received settled in a similar range. Try as we did, we weren’t able to get that sales price to $2MM. That was the goal, after all, to make or beat that benchmark.  In spite of this goal, the property just wasn’t able to push a sales price to that $2MM level. Was it  the house? Was it the interest rates? Was it the stock market? Was it the street?

Nope. It wasn’t any of those things. It was simply the reality of a property seeking to sell for $2.195MM. To understand why this property struggled, you must understand the typical buyer and the different price levels that separate groups of buyers. There are buyers that will pay $1.9MM for a house. Lots of those sorts of buyers, actually, each one successful enough in their regular life to pursue this vacation life. But a $1.9MM buyer is often a buyer who would love to spend $1.7MM or less. A $1.9MM buyer is often a $1.5MM buyer who found a bit more motivation to take on a bit more risk.

On the north side of $2MM, there are very few $2.1MM buyers. There are upper $2s buyers, those who might feel comfortable at $2.4MM but would reach to $2.9MM for the right house at the right time in the right location.  But there are very rarely buyers who place a hard cap on their search at $2.1MM. In understanding the demographics and the price categories that most buyers align within, we can make more sense of the Bluff Lane sale.

Was it worth $2.2MM? Sure it was. But a $2.2MM buyer is often a $2.5MM buyer, and if they spend a little more they often find a property that more closely resembles their weekend dream. When the dust settled and the property closed, it closed as it likely should have. For $1.95MM, to a buyer who found his way to the lakefront at a price that made market sense for both buyer and seller.  To the seller who allowed me to represent this fine lakefront home, I’m grateful.

Shore Haven Sells

Shore Haven Sells

The lake access market at Lake Geneva is not difficult to understand. In order to find this understanding,  one simply needs to be open to the facts. In the instance of real estate, the facts are limited to sold comps. This is the only fact that exists in this business. Current value? Opinion. Future value? Opinion.  Sold listings? Fact. If you’re open to the facts, then you must embrace the sold comps.  If we’re looking at lake access markets, then the first comps to look at are inside of the association itself. If the immediate association cannot provide us those comps, then we’ll have to look at the broad market. In that there is an issue, because comparing associations? Opinion.

Last week, there were two lake access sales that caught my attention. One was important because I represented the buyer. The other was important because it just so happened to close for the same price, on the same side of the lake, during the same week. If there were ever two comps to be examined, these are those.  The sale that I closed was in Shore Haven, this of a home that I have sold in the past. In fact, I sold it just last year for $675k when that seller was in the process of upgrading to lakefront.  The home is nice, with some meaningful upgrades, a very desirable, large transferable boat slip, and terrific proximity to the water. This time around, I brought in the buyer, and the home was listed on a Friday and by Sunday we had it under contract. Did I enjoy negotiating only $5k off of a $720k list? No I did not. But the market, man. The market.

The other sale was in The Highlands, or the Lake Geneva Highlands, that association just to the East of Black Point.  The Highlands has been gentrifying quickly over the past decade, and more so over the past few years. It’s a nice enough association and one of the few remaining on the lakefront where a lakefront home can reasonably be expected to trade under $1.5MM. The home in the Highlands was a cottage style home with limited parking, a scattered tree lake view, and a transferable boat slip. It was updated, quite cute, and in that desirable location just one home from the lake. In this description, you can tell that the Highlands home was closer to the lake than the Shore Haven home, and the view was much better. The homes were both of average size, though Shore Haven had a garage and parking while the Highlands home was more challenged on this front.

That’s the background, and here is how the market works in each association. In the Highlands, there have been five MLS sales per MLS of off-water, non-lakefront homes that have closed over $470k and under $587,500. Per the MLS, the highest sale for a home not located on the lake or on the lakefront parkway, was $587,500. The fact that five homes have all sold in this tight window proves the primary market range for a Highlands home located off-water. The home that just sold closed for $715k, and now that it’s sold we can all agree that it was worth exactly what someone paid for it. But in the context of the market, that sale price set a new upper end in the Highlands.

Looking back to Shore Haven, we see in the MLS has printed 10 off-water sales priced over $500k. Of those, all but one was over $624k, with the most expensive sale being at $1MM, and five over $800k. The sale that I just closed for $715k, looks to fit right into the middle of the Shore Haven range, especially when considering proximity to the lake and size/location of the boat slip.  Was I deeply in love with $715k for this Shore Haven home? Not really. But did it make a load of market sense, particularly during this period of tight inventory and high buyer demand?  You bet it did.

Both sales were fine for our market, but now you have a slightly opened window into the way that I view these lake access associations. Every association is unique, every association is nuanced. Some are capable of printing high numbers that make little sense, and others are range bound, now and perhaps forever.  These two sales showcase the fall 2018 lake access market, and I think they both prove something important. Our market loves boat slips. It loves proximity. It loves a view. And sometimes it looks at historical sales patterns and determines they don’t matter very much.   To the buyer who just allowed me to represent his family in their Shore Haven purchase, a sincere thank you.

Bonnie Brae Sells

Bonnie Brae Sells

Over the past few years, there have been some Bonnie Brae sales.  Priced between $1.6MM and $3.8MM, these sales have all made market sense. The street is nice, the North Shore location desirable, the approach along idyllic Snake Road hard to beat. Of these sales, three in total, each property that sold has since been transformed by the new owner. One of the homes that sold was torn down to make way for a splendid new lakefront retreat. Another was significantly renovated and expanded, so much so that you’d be forgiven if you thought the current structure was built recently from scratch. The other home that sold has been improved, updated, cleaned and polished. Lakefront owners like to improve their homes, this much we know.

This week I closed my newest lakefront sale on Bonnie Brae,  for $3,800,000.  This one of wide frontage and delicious, dark, deciduous depth. The home was the renovated and remade Ryerson boathouse, one of the last few remaining on this lake, and likely the only one that stands on a large estate sized parcel of land.  You can read about it here, and watch the video below. It was a great house, and it was no wonder that it sold shortly after coming to market in late September. Certain sales befuddle and certain sales confirm what it is that we already understand. This sale was obvious. Beautiful dirt with a charming, historical home, all at the end of Bonnie Brae, which finds its way along Snake Road. What’s not to like?

For me, I remain appreciative and grateful to those clients and customers who choose me to represent their fine vacation homes. This market is loaded with competition. Every agent is the best, the newest, the most amazing. I’m just here in Williams Bay, sitting at this desk that’s really just a few long oak boards bound together by glue and screws. I’m thankful for the chance to assist all of my clients, and this seller was no exception. To the seller, a sincere and lasting thank you. To the buyer, who now gets to experience this place from the front row, congratulations.

Vista Del Lago Sells

Vista Del Lago Sells

After a market downturn occurs, we must set our aim towards the goal of complete and thorough recovery.  If that goal is to return a specific market segment to full health, then there are several steps that must be followed. There is no shortcut to this health, and you cannot out-volume a market issue any more effectively than I can out-lift my horrible, no good diet.  If the market was bad and we wish the market to be good, then the steps must be followed.

The first step is to weed out any weak hands. Financially troubled owners have a tendency to drag on a market, negating any market gains with the constant, worrisome threat of foreclosure. If volume is printing but prices are still falling, this is generally acceptable, and will, over some period of time, work out in favor of the ownership. But if there are pieces of weak ownership that have the ongoing possibility of some form of distressed sale, this creates market drag that volume alone cannot overcome. This scenario occurred in the South Shore Club in the early years of this current decade, and the only way the SSC moved forward was by eliminating those trouble spots, which unfortunately only occurs after an owner has lost their home to the bank.

With the weak spots identified and fixed, then we need volume. Plenty of volume. We need sales in all price sectors within that segment. Some prices will be low, and we cannot be too concerned about this. If an average price in the segment is $500k, and over a particular duration there are two sales around $400k for every sale around $500k, that’s not a big deal. It’ll feel awful, but remember, the goal is not immediate health but rather a path towards it. It’s painful to watch low sales print when you know they’re creating an issue for those who wish for higher sales, but  I never said this path was going to be fun.

With the weak owners flushed and the volume on the rise, the third step is bright spots of higher valuations. A sale here and there over the expected average of the segment. If we’re in this $500k range, then we’ll need to see some sales print higher- $525k, $550k. There will still be lower sales, sure, but the momentum is achieved by raising the expected ceiling.  Higher sales beget higher sales, and all it takes is one or two of these sales to move a market higher.

Step four is the strengthening of volume. We need more sales. More and more sales. New listings, shorter Days On Market. Movement, that’s what we need now. Liquidity is important to both establish the market pattern and introduce new, energized ownership to a segment. The reason new owners matter is because they tend to make improvements. Remodel the kitchen, update the bathrooms. New appliances, new tile, new paint. This shows a potential buyer that they’re surrounded by neighbors who value what it is that they own. Increased volume is vital to return a market to health.

The last step is a tightening of inventory.  True price gains cannot be realized if there is ample, sufficient inventory. We need limited inventory, tight conditions. We need buyers asking about product in that particular segment, be it a specific association, condominium, or price range. Without this last, crucial step, a market cannot return to full health. If you doubt these steps, consider each and every step has occurred in sequence within the South Shore Club over the past eight years. The good news for the local condominium market is that Vista Del Lago appears to be following the same, successful path.

Last week, I closed on another four bedroom unit at Vista Del Lago. I sold one in May for $520k, and I sold this recent one for $515k. Both sales represent meaningful volume for this association, and both sales prove that Vista is on the path towards full health. If you’re a condo buyer on Geneva, you generally have options with two bedrooms. Some association have three bedroom units, and some have four bedrooms. But the four bedroom condominiums tend to be pricey, located in higher-end associations like East Bank. Vista offers four bedroom units for $520k, and as long as families want a view of the lake, a slip, and a place to sleep, Vista will have a market.  Speaking of the market, there are only three available units at Vista this morning, and none of those are four bedroom units.  Vista isn’t yet finished with this plan, but as you can see, it’s well on its way.

Buena Vista Sells

Buena Vista Sells

It’s a curious thing to watch buyers as they watch the market, and the houses that exist inside of that market. Buyers are attracted to various things, to shiny, for sure.  They like marble and they like glitz, and even the most staunch defenders of Location First cannot help but be dazzled and drawn by the varying shapes and sizes of housing perfection that exist here. But beyond those things, there are locations that speak to buyers in different ways. One buyer might find a location to be busy, dense.  One buyer sees that scene and they decry their lost privacy, their potential involvement with their neighbors, their exposure. And yet another buyer comes to that same scene and feels at home. They feel at peace with those same surroundings. They thrive off of the activity, the proximity, the scene. To each his own is just a saying, until you come to these shores, at which point it becomes a most steadfast rule.

This week I closed 274 Sylvan in Buena Vista for $2,775,000. The house was special not just because it shared that glamor of sparkly hardwood and expensive appliances. It was a vintage home made to live like a modern one, but still filled with the original touches that made it feel rooted on that shore.  Buena Vista isn’t an association for everyone, but that’s only because there wouldn’t be enough houses to go around. There are tennis courts, an ample lakefront park and pier system, and then these scant few lakefront houses. A dozen, perhaps. These few lakefronts on this Northwest shore of Fontana Bay offer a classic lake experience combined with dynamite views of the lake and an easy stroll to Fontana’s lakefront scene.

To speak to the unique nature of this now sold offering, consider the last MLS sale to come to market here was this same house, when I sold it in the spring of 2011. Who can know when the next Buena Vista lakefront will come to market?  Like every lakefront sale on this lake, once a property is under contract or sold there are numerous buyers who wish they had bought it, and this home had its fair share of regret filled buyers. That’s because it wasn’t just an old cottage on the lake. It was an old cottage with a recent addition and important updates, but it still oozed that vintage appeal. That appeal isn’t easy to find on this lake, especially if you’d like to find it in Buena Vista. To the owners who allowed me to represent them in this sale, I thank you. To the new buyer who gets to enjoy their weekends in an entirely different frame of mind, congratulations.

Loramoor Sells

Loramoor Sells

Most of the players in this game are endless and unflappable cheerleaders.  I did this! They say. I’m amazing! Others chime. Such is the business of self promotion. Without this promotion, no one would know anything about any of these players.  Aside from a news article once in a while, no one will spend much time considering your success. In the real business world, this is fine. To quietly go about mining dollars is the preferred way, but alas, the rules of this game do not allow quiet success.

I engage in this self congratulation often. I write this blog to educate and entertain, but also to make sure the reader knows which player in this game is indeed the most meaningful.  Heck, I write a whole magazine dedicated to this market, and as a fortunate aside, this player. Some pose with their real estate signs as though they’re prom dates, others plaster their names on their cars, while others still want to watch you while you grocery shop. No matter the platform, we’re just playing by the rules.

But sometimes, there’s no praise to be given, no praise to be asked for. There’s just a sale and a seller and a buyer, and that’s that. This is what happened last week when I finally closed on my aged listing off of South Lakeshore Drive. I first listed this home two years ago, and throughout that time I asked for listing extensions and price reductions more than I’d like to admit. I worked to sell this house, and ultimately I did sell this house, but I did a miserable job at it.

The market is, by all accounts, back to the prior market peak. In many instances, prices have pushed above that peak. Now consider this house that I just sold. It previously sold during the prior market escalation for $1.5MM and change. I just closed on it last week for $925k. That’s a terrible thing, and while I feel relieved that the property is no longer on the market, I know I was rather unsuccessful in selling this home.

The issue with the home was a complicated one. It wasn’t one issue at all, really. It was the perfect storm of trouble. First, a high prior print to chase. Second, an initial and subsequent list price (with another broker, by the way) that was sky high. After that initial list, the market was lost and the owner spent the next several years chasing buyers in the only way that actually makes a material difference: price reductions.  By the time I took over the market had written the property off, and while I thought I might be able to put some shine on the listing I ultimately failed at doing so. The price of $925k was a reasonable market price, but in this case, the buyer won.

I closed on another property last week, also somewhat of an aged piece of inventory. This was my vacant land listing in Loramoor. The lot was quite lovely, just one home from the water with slight views and proper lake rights through the East Loramoor Association. That lot was on the market for a year or two before closing last week for $625k.  In this market, that sale makes perfect sense. It was a nice market rate, with seller and buyer both doing well for themselves. Why would a buyer buy a home in a cottage neighborhood only to significantly renovate or rebuild it, when they could buy this lot in a high end neighborhood and be surrounded by high priced homes? Expect a new home to be built there soon, one that will likely make proper market sense.

These sales prove one important thing about the state of our market. As the lakefront inventory dries up (the lowest priced true lakefront home available today is my listing on Bluff for $2.145MM), buyers will look off water for reasonable values. If the cheapest lakefront is $2.1MM, it only makes sense that buyers in the low buck range will seek alternatives to sparse lakefront inventory. Expect this trend to continue for the foreseeable future, as off-water homes in the $900-$1.7MM range find favor with inventory hungry buyers.

South Shore Club Sells

South Shore Club Sells

In the South Shore Club, there are 40 total lots. Most are built on, a few are not. At present, there is one new construction underway.  To date, there had been one sale, that of an aged inventory home near the back of the lakeside circle. While there are 40 total, there are only four built homes that play as true lakefront homes. Those are the front homes, the homes you walk into and see the water, unavoidably.  Those are the homes that function as their own market, and the home I sold this week is part of that elite group.

There is some confusion over the South Shore Club, and how to come to a valuation. Will the market pay lakefront prices for these lakefront homes? The answer is yes, and no. The yes part is obvious, because there’s a sales pattern now that didn’t exist prior to 2012. The no part is less obvious, and it might not be a negative in the way you’re suspecting.  The market won’t pay true lakefront prices for these homes because the prices paid for them represent a discount to what those homes would trade for if they were on their own private lakefront parcels. So the market respects the South Shore Club, but buyers still expect a slight reduction over private frontage valuations. This is all good news.

Consider one way to look at this closing at $4,175,000. The last front house sold in 2014 for $3,591,000.  For 2014, the average price paid per lakefront foot was $21,144.  2017 YTD through October 10th, 2017, the average price paid is $27,743. That represents a 31% increase in valuation. If we apply the same appreciation increase to the South Shore Club lakefront four, we’d see a valuation $4,704,210.  Is this the only way to compute value? Of course not. A lakefront in Fontana sold in the high fours this fall, and that home, with a very small lot, sold for $713 per square foot. The South Shore Club home was 8736 square feet, which comes to a $477 per square foot.

A sincere thank you to the buyer and seller who let me help with this transaction. It was not the easiest deal I’ve ever worked on, and that comment may win Understatement Of The Year. That’ll put a wrap on my 2017 sales production, unless someone needs to close on a new house by the end of the year. Put a big red bow on it, like a Lexus. The year ends for me with $44MM in sales, which makes me the #1 individual Walworth County agent for 2017, and in that top slot for the third year in the past four. Combined with the 2016 volume that’s $106MM in the past 24 months. And that isn’t so bad. The address being written wrong on the property below that just sold, now that’s bad.

Jerseyhurst Sells

Jerseyhurst Sells

There are nice locations on this lake. We know most of the nice ones. If we get to drive down Snake Road while en route to our lake house, this is a wonderful thing. If we turn off of South Lakeshore Drive onto Basswood, this also makes us happy. If we drive down Linn Pier and get to turn left onto Lackey Lane, we know we should celebrate that we were able to turn left instead of just right. There are roads that deserve our praise, and each person who has ever driven these curving lakeside roads knows it. 

But the roads we know are not the only roads. There is one road that most people don’t know. Tell them to find Jerseyhurst without the assistance of GPS. Tell your older friends to find it without a the help of a Rand McNally. It’s a road we know about, because we once heard someone at a nearby dinner table mention it. Or we know about it because a friend once went on a garden walk down that lane, though most invitees became lost along the way.

Once you do find Jerseyhurst, just to the West of the Elgin Club, it requires no creativity to understand why it’s so special. There are several homes here, but not so many really. Just a handful, each unique and each manicured and each representing the best that Lake Geneva has to offer. This is a unique lane, short and curved and limited, but why it’s special is apparent to anyone and everyone who has ever wandered down it.

This is why my Jerseyhurst listing sold, and sold so quickly. I was pleased to represent the seller and work directly with the buyer in this transaction, and the print price last Friday of $2,795,000 represents a fair ransom to find ownership on this most lovely lane. To the new owners, a big congratulations for becoming the new stewards of this wonderful lake house. To the sellers who spent many fine years here, a most sincere thanks for allowing me to handle this sale, and best wishes for whatever comes next.

As a self-indulgent aside, this sale has pushed my 2017 sales volume to $34MM and change, which leaves me alone at top of the Walworth County leaderboard. So that’s neat.