Blog : Lackey Lane

Lake Geneva Prices

Lake Geneva Prices

There’s an interesting bit of information available this morning courtesy a recent lakefront sale. The sale was of an older house on a 90′ lakefront lot in the Birches. The property was fine. The MLS description made no mention of it, but I believe the house may have been a Zook.  Zook homes are a lot like Frank Lloyd Wright homes, in that the sellers care about the pedigree of the architect, but the market doesn’t.  This property was initially listed for $3.5MM back in 2008, and after a series of price reductions and listing pauses, the property mercifully sold this week for $2.3MM.  I didn’t have the listing or the buy side, which is pretty awful for me but worse for the buyer and seller.

The parcel of land was reasonably decent, though I don’t count Maple Lane to be among the best streets on the lake. It’s a fine street with fine homes, but it’s not necessarily a street that has a history of selling for elevated prices. Today isn’t about that parcel, it’s about the market context of this sale.  Brokers are clamoring over potential listings to such an extent that prices are being driven up less by market conditions and more by the breathlessness of agents who are new enough to the business that they have no way to be sure of valuations. It’s not their fault, they’re just chasing dollars.  To understand what this sale means to the market we must first look back at some very recent history.

In 2016 I sold three lakefront homes on Lackey Lane. Of those three, two were modest homes, one of which has since been torn down while the other was renovated. Those two properties that sold at land value printed at $1.9MM and change, for 100′ lots on a really desirable street. Geographically, Lackey and Maple are close, so we’ll consider them to be likely comparables for each other, even though I find Lackey to be far more appealing.  Those two sales printed at around $19,000 per front foot. This isn’t some long ago number, this is 24 months ago. Market conditions today have improved, but market conditions in 2016 were still quite good.

The recent sale on Maple printed at $25,555 per front foot. The overall land mass at Maple was larger than Lackey by two fold, but the market pays little attention to overall mass and focuses instead, perhaps at times incorrectly, on frontage.   The Maple sale closed 34% higher than the 2016 sales on Lackey. Does this mean the lakefront market has appreciated 34% in the past 24 months? Of course not.  Does it mean that some properties have appreciated that much in such a short period of time? Absolutely yes.

In 2016, those Lackey sales were not easy sales. Both properties endured some time on market. Both properties were overlooked, even by smart buyers who were working with me.  Today, the Maple property proves out what I knew then: 100′ vacant lots that are selling at land value are becoming increasingly rare. Just as we’ll someday run out of dumpy lakefront cottages that you might be able to buy for $1.2MM, we’re also running out of 100′ lakefront lots with older, modest homes on them.  This scarcity is driving up prices in both categories, though the entry level market remains rather stagnant compared to the 100′ market. Expect this trend to continue as buyers seek out properties that offer them some upward mobility should they one day decide to build new, or undertake a serious renovation.

Lackey Lane Sells

Lackey Lane Sells

At one point earlier this year, there were three homes for sale on Lackey Lane. Lackey, in case you haven’t the pleasure of wandering down that lane before, is a dead end street with a handful of homes on it to the west of the Birches. The street is unique in this market. It’s a dead end, which is always a positive here as it makes it more awkward for strangers to commit to a wandering, gawking drive.  The lakefront is level, the location on the lake creating a slight bay that keeps aggressive boaters at bay. There is little I don’t like about this street. Little not to celebrate. And that’s why there were three homes available earlier this year and as of today there are none, and I’ve sold them all.

First, the beautiful home at W3818 Lackey. I sold that home in June for $4.275MM, and what a home it was. The new owner is happy there, which makes me happy, and the street, though it possessed a history of selling in the threes, had a print in the low $4s that it needed. This print is important as it shows there is a path to value in that range, and the few tear downs that remain on the street now had an angle. Buy one for $2MM or less, build a new home for $2MM or so, and you’ll be secure in your value. This seems easy to do, but it’s not as easy on this lake as you might think.

Next, I sold the small brick ranch on 100 level front feet at W3846 for $1.91MM. Again, the value makes complete and utter sense, and not only when you consider that price per foot is just $19,000. The street can support built value, and if you’ll drive down that lane today you’ll see the foundation of a new build where the old Arlington Heights ranch had previously stood.  That was a nice sale, a  terrific value, and a new place on the lake for a long time Lake Geneva family.

Yesterday, I knocked over the last Lackey domino of 2016. W3852 Lackey closed for $1.925MM, to a delightful young family who saw what the prior family saw: opportunity to grab rare land at a very attractive price. The street now will do one of two things. It’ll either quiet down while the new owners make their mark in that dirt and along that shore, or it’ll see another offering or two as existing owners who may have an eye towards a someday sale see the value and demand that is obvious on their quiet little lane.

Coincidentally, two other lakefronts closed yesterday. One in the dead center of the Narrows, that of an older house with unremarkable attributes and a 100′ lakefront lot. That closed for $2.485MM. The other closing was in the same neighborhood as these others, but this home was immediately adjacent to a very busy boat launch. I can change out an old sink if I don’t like it. I can buy a new range if I want a shinier model. I can lay hardwood where there is now carpet. I can nail on shingles where there was vinyl. I can do lots of things to my new lakefront house, but something I can never, ever do is move a boat launch. $2.899MM was the print for a home with shiny finishes and a municipal launch for a neighbor. These sales bring the lakefront sold tally (MLS) to 25 for 2016, and I’m proud to say I’ve been involved on either the buy or sell side (or both) in 10 of those 25. That’s not bad for a kid from Williams Bay.

To the new owners on Lackey, a big congratulations. I’m never unaware of the reality of my business. I can sell lots of homes one year and very few the next. I could do this work for another decade and find success, or I could be cast aside as an insignificant blowhard who writes about Christmas trees and my grandmothers and pontoon boats. I understand that buyers and seller alike have myriad choices for representation in this market, and I’m always grateful to those customers and clients who choose me as their agent. I’d like to think I’m a bit more fun to work with, and I’d like to think I have better insight into the market (I’m actually certain of it, but humility), but mostly I’m just happy that my sale yesterday represented incredible and lasting value, and in that, I’m content.

Another Lackey Lane Sale

Another Lackey Lane Sale

Sometimes, you just want what you want. You want to be on the lake, that’s smart. You want to see a weekend like the one just ended and you want to see it from the front row, up close and personal. You want to be on a road, something of pedigree, something that matters, not just any road.  You want the road to be easy. You want it to be on this shore or that shore, but you want it to be quiet and peaceful and you don’t want the rumble of a wayward motorcycle tour to interrupt your Sunday. You want a dead end, that’s what you really want, but you know it’s not easy to find a dead end. Bonnie Brae is a dead end, and if a car wanders down to your end of the lane home you can be sure it’ll be quickly followed by a many pointed Y turn, but Bonnie Brae is not on the shore you want. You end up looking and looking, content to be patient but wishing it wouldn’t take so long.

Then Lackey Lane comes to life with not one, nor two, but three properties available. On a street so small, an exodus so large. And so you see those 100 level feet and that wooded approach and you say that Lackey Lane is where you want to be. And then last Friday you close on that lakefront, the one with the small brick ranch that would be so much more at home in Niles. $1.91MM for 100′ of frontage, that Lackey Lane location, and a dream that someday soon you’ll have built a new home on Lackey Lane that will compliment but not mimic the newer homes that have already been built on that short little lane.

You’ll remember that last Wednesday I also sold the $4.275MM Pickell built home on Lackey. You’ll also understand now that $1.91MM makes thorough sense. It’s not that easy to find a location on the lake where a $1.91MM land buy can lead to solid, demonstrable value in the $4.5MM range, but on Lackey that’s possible. That’s why this post is about the two sales I just completed, sure, but it’s more about the one property that’s left on Lackey Lane. If you’re a buyer on Geneva right now, you should be letting me lead you to Lackey. The house that’s available is fine. You could fix it up and live in in for a long while. Or you could do the likely thing-  buy it, tear it down, and build at the same time the adjacent, new neighbor is building.  If there are few streets where $4.5MM all in costs are easy to justify (Loramoor is another one), then there are even fewer where you can build a new home next to another new build, at the same time.  The convenience of one singular disruption is difficult to fully appreciate until you’ve spent a summer next door a new build.  Just ask anyone in the 1030 area of South Lakeshore Drive, Fontana.

But I lied a bit, because this isn’t just about the available lot, and it’s not just about a fabulous client who let me help him into the new Lackey property, it’s a bit about me, because real estate requires shameless self promotion. That sale pushes me over $140MM in sales since the start of 2010, including $10MM worth of sales in just the past two weeks.  No single agent (operating without a multiple person team) has sold so much real estate in Walworth County since then, and that’s exceedingly humbling to me. Additionally, no other active top agent has, since that cold day in January of 2010, an average sales price in excess of $1MM. I think those things matter, and they should matter to any lakefront buyer or seller seeking to buy or sell some slice of Geneva Lake.  I’m well aware that these production numbers wouldn’t be possible except for the loyalty of my incredible and growing client base, and for that, I’m supremely grateful.

To the newest owner on Lackey, congratulations and thank you.  The market should be keen to watch a new home rise from that site over the coming months, and I’m certain we’ll all be the beneficiaries of what promises to be a most beautiful new home. If you’re a buyer and you want to have a beautiful new home and a lovely family as your next door neighbor, we need to start talking, like stat.

Lackey Lane Sells

Lackey Lane Sells

It should be no secret that the cool  people are buying at Lake Geneva. It’s not just the people, but the cool people. The kids who live in the city who know that city life is for weekdays. The young affluent set that realize brunch lines are best left for 24 year olds who have yet gained the financial ability to escape the clutches of that tall city for two days a week. This is the group that has learned of Lake Geneva, embraced Lake Geneva, and are benefiting from Lake Geneva. Our market is benefiting from them as well, as there’s a new generation coming to these shores to indulge in the things that make this place so darn special. But while this new generation of buyers is needed and wonderful, the last generation is still active in the market.  Each year there are new faces, new families, new kids jumping into their dad’s arms from white wooden piers for the first time, but each year there are also the others, those who have been here who just felt the need to do something different. Something bigger, something smaller, something on this shore instead of that shore.

This week, I sold W3818 Lackey Lane for $4,275,000. I negotiated that deal on behalf of a cherished client last November, and from that day in mid fall through this day in late spring, the property was under contract. The buyer waiting with nervous anticipation. The seller, presumably, hoping the deal would hold together and close. It did, and the buyer need only sit in a lakeside lounge chair on a day like today to realize the reward of the effort. The seller need only check his bank account balance to see his reward. The deal worked, and for that we can all be pleased.

The lake has a considerable absence of printed sales in the $4MM range. The reason for this is quite simple: There just aren’t that many high quality, newer homes on reasonably large but not huge lots. The trend on this lake has been clear: Buy a beautiful lot between $3-4MM, tear down whatever might have been built on the lot, and build new. The new build costs for these larger homes are safely between $3-6MM.  The lake has gone long on builds with all in costs between $7-10MM, and yet these newer properties, excepting the incredible home on Pebble Point, have not typically come to market. The cliff-top sale in Fontana in the low $5s last year was as close as we’ve come to touching on this particular segment. But what’s less common is a $2MM lot with a $2-3MM house on it. These are the types of properties that the market could more easily absorb, and this is where Lackey Lane fits in.

This sale, for as common as it might look in this market, is somewhat rare. It’s a newer Orren Pickell built home, so it’s of pedigree. And along those lines,  please don’t forget that builders matter here. If you wish to obtain some level of premium when you look to sell your newly built or dramatically renovated home, I do hope you’ve chosen a builder wisely. Pickell, Lowell, Engerman, these are the names that matter to this lake. Don’t think they don’t. And so this home was built properly, with the proper elevated finishes one would expect from a renowned high end builder. The landscaping was ideal. The lot level, 100′ worth. The home large but not too large. The sale making perfect, complete sense.

When this home first came to market last summer, the asking price was $5.275MM. I thought it had a chance to sell in the $5 range, but only because the inventory was low and this was a most beautiful home that the market wasn’t expecting. Alas, it did not sell, and when the price was adjusted a couple of times over the course of the fall, my buyer took notice. That’s why he’s sitting on the pier right now contemplating just how terrific life is on a Friday morning when the water is glassy and clear and the fish swim, dodging only the toothier fish and the plastic baits of the trolling fishermen. The seller of this property was wise to reduce until he found his market. The buyer was wise to wait.

With a decided absence of very recent comps in this range, how do we ascertain value? Well, we look at the land first. 100′ level frontage, $2MM all day. Two more comps on the street for tear downs bear that out. One of those I’m closing on today, the other is available. It should be noted that the other one on Lackey at $2.15MM, along with my Loramoor lot at $2.34MM are the best, easiest options for a buyer seeking a new home on Geneva Lake in the $3.5-4MM range. So if the land is worth $2MM, what’s a 6189 square foot Orren Pickell home going to cost us? Well, it’s probably going to cost between $2-2.5MM. And so there you have it, the cost approach for helping pin point value. In the case of this house, there’s a very real chance that the purchase price is  below replacement cost. If we’re considering a lakefront purchase, isn’t that a pretty nice data point?

For now, the new owner will be content in his new lakefront. I’ll be content to have helped. The market will be content to have printed another high value sale.  The question is, does a brunch line on Sunday morning really make you content? And yes, I know the hollandaise is amazing.

Lake Geneva’s Lackey Lane

Lake Geneva’s Lackey Lane

Williams Bay is a big bay. Fontana Bay, also a big bay. Geneva Bay, big.  These are the bays we know from maps and from vernacular and because we know this place.  But there are other bays, small ones, nuanced and slight, formed from the most delicate positioning of the shore relative to the water. These bays are all over the lake, but if you travel the lake exclusively in summer you won’t notice them. Piers have a way of dulling the edges and making the lakeshore appear uniform when as a point of fact it is anything but.

These small bays are really nothing more than drawn out impressions in the shoreline. You wouldn’t sit in a boat and nudge your guests to look to the shore while suggesting that this is, indeed, a fine bay.  There is one such barely bay to the north of Conference Point. The point juts out into the depths and as the shoreline recovers from that trauma there is a gradual bay that curves from that point all the way to a place somewhere around the Oakwood pier. Would you know this bay? Probably not.

Basswood is another bay like this, where boats don’t follow tight to the shore because Black Point makes them want to cut away from shore to by-pass the tall, rocky point. This makes Basswood a preferred stretch for owners, because boats don’t clip the Slow-No-Wake buoys. The water tends to be calmer in these small bays and it might be for that reason alone.

Basswood Lake Geneva

Another bay occurs on Lackey Lane, just West of the Birches. That’s because boat traffic rounds Black Point and rarely pushes South quickly, because the next point created by the Narrows is already in sight.  This creates a boat lane that bypasses near shore adventures and spares the Lackey shoreline from that rush of traffic. In this, there is a secret. Find a spot on the lake in one of these nuanced bays, and you’ll be pleased.
Lackey Lane has historically been low on inventory. That’s because it’s a short, dead end lane, a rare piece of the area that combines uniform, level lakefront with a dead end drive. There are just 11 residences off Lackey Lane, and only 9 if you count the lots that measure approximately three quarters of an acre in depth and 100′ of frontage on the lake.  There’s a beautiful Orren Pickell home on that lane that has been pending sale for several months to a client of mine. That property, listed in the mid $4s, will be marching off to closing soon.

Two other properties on Lackey hit the market last fall, both modest homes, both on those easy lakefront lots. As of last weekend, I have a buyer in place on one of the listings. That’s a buyer who sees the value in Lackey, in the nuance that is a dead end, quiet lane combined with a slight bay on the lakeside, mixed with 100′ of level frontage. That home that’s under contract will be razed to make room for a new home, and in that the transformation of Lackey that began with the Pickell home will continue.

Lackey Bay

Luckily for you, there is one home on Lackey left.  I have that property co-listed, and it’s my goal now to find a buyer who appreciates the unique nature of Lackey Lane. Listed at $2.15MM, it might be one of the best values on the lake right now. The home is dated and a bit rough, but it could easily be renovated and turned into something special. Think about what our local spec home remodeler did to the boring ranch at the end of Geneva Bay Drive, and then apply that sort of polish to this home on Lackey. Or, tear it down and be all-in around $4MM on a street that has proven the ability to support that built value.

Either way, Lackey Lane is calling, and if you’re listening, we should be meeting there this weekend.

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.