Blog : Lake Geneva

Bluff Lane

Bluff Lane

Buyers have a unique tendency to focus on one or two aspects of a purchase, and in doing so, convince themselves to proceed with the transaction. This is true of jeans. If you love the fit but hate the color, you might buy them anyway. If you hate the fit but love the price, you might buy them anyway. This is why we have closets with jeans that we don’t wear. Sometimes it’s because we started working out and have, as a curious result, gained weight. But usually it’s because whatever jean we bought wasn’t quite right, but we bought it anyway. Houses are like this, too.

On the lakefront, it’s often less about what a house has than what it doesn’t. It has a fantastic stove. Yes! Shiny! But it has one bedroom. It has a big level lawn, sweet! But the foundation is an assortment of neatly, dry-stacked bricks placed at random intervals. Every house has good, and every house has bad. There is no perfect house. Not here, at least. Every property has something wrong with it.  Buyers like to focus on garages. Lake houses and garages have a curious relationship.  On one hand, a lake house doesn’t need a garage. Not at all. On the other hand, at a certain price point, the lake house demands a garage. It needs one. What’s that price point? That’s for you to decide, but I think it’s somewhere just north of $2MM. If I’m a $1.6MM lakefront house buyer, I should understand that a garage is an extravagance that my budget might not afford. If I’m a $3MM lake house buyer, I likely find a garage to be a requirement of the purchase. This is the way the market tends to behave.

That brings us to my newest lakefront listing, N1939 Bluff Lane. Follow the road through the little stone entry, and you’ll end up on the dead end of Bluff Lane. A few lakefront houses, not much more. It’s quiet, down here on Bluff. If you think the name is cute but not meaningful, you’d be wrong. Bluff Lane is indeed a high lane, with elevated frontage. That frontage creates steps, yes. But that elevation creates a most unique perch through which to absorb the lake. It’s a tree house setting, which is unique on this lake but highly interesting.

The house has five bedrooms, four baths. A two car detached garage is a newer addition to the property, along with a full lower level that opens to the lakeside for water toy storage. There’s off-street parking,  a small lakeside yard, and 76 feet of private frontage. The house was renovated and added onto in 2009, leaving this once basic property with a fresh look and a beautiful new master suite. There are three fireplaces here, which should interest you if you like the idea of sitting in a tree house overlooking the lake while the snow piles up outside. It’s a good feeling, a good scene, and with a 30 day close you could be enjoying New Year’s Eve in that exact fashion.

At the lakefront, there’s a massive pier, complete with oversized canopied boatslip and a large swim deck. It’s Linn Township, so the taxes are just $16k and change. This home is in terrific condition, ready for immediate use.  Why wait until May to join the race for summer? Start the race now. Tweak your new house over the winter.  Some new paint colors here,  some new couches there. Do the work in the off-season that so many people put off until the in-season. Take the winter to enjoy the scene, decorate the house, and prepare. When Memorial Day Weekend rolls around, you never again have to wonder which suburban BBQ you’re going to attend.

 

Stone Manor Saga

Stone Manor Saga

In the news this week, more of the continuing saga surrounding Stone Manor. I suppose most of this story is my fault, so I should take some time to explain myself.  Several years ago I was hired to represent the marquee unit at Stone Manor. The first floor residence is as marquee as marquee gets, and since I’m the agent with the most success in that particular segment (no matter what the stapled letter you received in the mail from some other agent says), I was chosen to sell this space. After some market time,  I sold it for just under $6MM to a strong buyer.  As a point of fact, you won’t ever see me drop my client or customer names in this blog. That’s low-class and I’ll leave it for the online gossip pages to fill in the gaps that I intentionally leave empty.

After all, that’s what this story is all about. That’s why it has legs.  The story has personalities involved, and media types love a personality.  But again, here I am getting ahead of myself. The first floor unit sold in late 2016, and I was pleased to represent the seller. Stone Manor, for those who are unaware, features(d) several condominium units. There is a double unit and a single unit on the top floor, the same configuration on the second floor, and the large single floor unit that I sold on the first floor.  Shortly after the first floor unit sold to this buyer, a double on the top floor sold. Then, some fancy deed work between two owners, and ultimately the second floor double unit sold.   In November, the single unit on the second floor sold. That unit, by the way, was the unit owned by Tony Rezko, infamous associate of a prior president.

Even though the sales prices have been poorly or inaccurately reported,  the transfer returns point to sales prices as follows: First Floor: $5,995,000. Top Floor Double:  $1,899,667.  Second Floor Double: $3,400,000. Second Floor Single: $2,250,000.  The top floor double may have sold in a different manner to reflect that lower transfer price, but I’m not privy to any details, and those don’t matter. What matters now is that a singular owner now owns all of Stone Manor excepting one single top floor unit. The price paid so far? $13,544,667. This means every reported number you’ve read over recent weeks and months is wrong.

So now what? An owner who isn’t well known locally now owns nearly all of Stone Manor. The new owner has paid a handsome market rate for the property acquired.  And because of this, everyone is going insane. Local news reports on the purchases as if they’re somehow unexplainable. Los Angeles based bloggers can’t figure out what’s going on here. Why would someone want to own so much of a building in rural Wisconsin?  Has the world gone mad?  We demand answers. We must know. We have to know. What’s going on at Stone Manor?

The answer, is nothing.  Stone Manor is a monster limestone structure. It’s somewhere around 30,000 square feet. The property has 400′ of frontage and nearly 10 acres. It is, without question, the most important estate on this lake. No matter what other billionaire lakefront owners think, Stone Manor is actually the king.  And if you’re a lakefront owner or a lover of this lake, you should be thrilled that the property is on the verge of returning to single family ownership. Why would we bemoan a purchaser investing so much in our market? Why would we wish to understand this beyond what it looks like on the surface? It’s an owner who loves a property that had previously never been given much attention on the market, and that owner now seeks to turn 400′ of frontage into a singular estate. This matters, and we should be appreciative.

Let’s say the top floor holdout owner sells. Maybe he does, maybe he doesn’t, it matters little to me. But if he does, and the price is in line with prior sales in the building (let’s not consider the alternatives for an owner who no longer has meaningful voting power in the condo structure), then the singular owner will have purchased the entirety of Stone Manor for around $16MM.  Want to know what Stone Manor, in its entirely is worth?  Probably around $16MM.  Has the new owner overpaid for this property? No. Does it matter if she did? No. Does it matter that she might be from California and her husband might be from New York? No.

My advice to the community is to recognize a compliment when paid one. This owner could choose to spend millions of dollars in any vacation home market in the world. She chose Lake Geneva. I, for one, am flattered by her interest, and as a caretaker of this market and this lake, I welcome the consolidation of ownership.  To that new owner, I say thank you. I say congratulations. I say welcome to the lake.

 

Thanksgiving

Thanksgiving

Halloween is a stupid, fake holiday. There, I said it. It’s absolutely the worst fake holiday there is. I’ll take Sweetest Day over it, and I don’t even know when said day occurs.  Easter is a great holiday, even if my wife tells me it has pagan roots, just like Christmas. Both of those Holidays are not universally adored, because both are Christian holidays heavily connected in tradition and procedure to the aforementioned pagan celebrations.  Labor Day is nice, but is it? Memorial Day is something everyone can get behind, but this isn’t a Holiday with a season so much as a long weekend. Holidays, they’re confusing, and they’re different for each of us. Well, except one Holiday. The King of Holidays, Thanksgiving.

There is no one alive who wishes for Thanksgiving to go away.  Try to even imagine such a person.  Even Ebenezer Scrooge was well known to enjoy a Thanksgiving turkey, even while he displayed open disdain for the Christmas Goose. See, everyone likes Thanksgiving. Even Canadians and people who willingly vacation in Michigan.  Thanksgiving is the one weekend when everyone is in disagreement over something said at the table, or over the way something was prepared (my mom shouldn’t cook her turkey in an oversized crock pot), but when everyone is also in agreement. Thanksgiving is the best. That’s undisputed.

But what is thanksgiving? Not the capital T holiday, but the lower case t act? If we’re thankful, which we know we should be, to whom are we to be thankful? I admit I struggle with being thankful. I have a very hard time balancing being content and striving for more. I don’t know where the balance is. If I’m grateful and thankful, does this mean I’m content? It should, I think. But I admit that I am not. Ask my wife. I’m not predisposed to contentment, even if I am predisposed to be thankful. Indeed, shouldn’t one require the other? This is my personal struggle, the feeling of a unique form of driven anxiety coupled with an understanding that my life, while far from perfect,  has been pretty, pretty, pretty good.

Today, my children are healthy. My son is addicted to some Starwars video game, and my daughter hates homework, but things are, on balance, good. My wife is struggling with an unfortunate deer hunting incident from last weekend, wherein she was an unwilling accomplice to Buck murder,  but that’s a story for another time once the wound isn’t so fresh. Her figurative wound, not the Buck’s mortal wound. That wound isn’t fresh anymore. But still, my wife is well and my kids are well and I love them all dearly. I almost wrote deerly, in reference to the murdered Buck, but I didn’t think you’d get the joke.

This week, like every week, I’m going to try to be more thankful. To be more understanding. To be less frustrated and more content. This week, like every week, I’ll fail. But I adore Thanksgiving, and the way it brings a family together to give thanks for the many blessings that have been dropped squarely into our unworthy laps.  The thing is, while my family will have disagreements and spats this weekend (like every week), we know to whom we are thankful.  And that’s really what this Holiday is all about.  We’ll enjoy this week and keep with us an attitude of thankfulness to the bestower of these blessings.

 

Photo Courtesy Matt Mason Photography.
The Fall Of It All

The Fall Of It All

I already know the sort of fall you like. I know the sort of fall everyone likes. It’s the fall we had last Saturday. Sunshine, 70 degrees, bright leaves and a deep blue lake.  A cloudless sky, excepting a few puffers pushed from the South and out to the East by a weekend wind. Boots and leaves, orchards and pumpkins. Walks along the shore path with dogs. Happy dogs. Happy people. Happy skies and happy days. This is nice that you’re so positive all the time, so nice that fall can behave like this, much to the delight of the fall enthusiast. Fall, it generously gives the soft people the fall they so badly desire.

But fall isn’t just like this. Fall gives to people like me, too. It’s not that I don’t love the above fall, I do. When I spent a few hours boating last Saturday with clients and friends, I wasn’t mad about this. The kids flopped around on the tube as we whipped from shore to shore, basking in the waning warm rays of 2017. I enjoyed it as much as anyone, but not more than anyone. I just enjoyed it, enough. But the time for that has past. The time for the soft fall is nearly over.  The opportunities for the casual fall enthusiast to stroll over bright, crisped leaves have just about expired. It’s still fall, mind you, still delicious, wonderful fall, but it’s about to be fall for the serious. Fall for the brooding. Fall for the hardened.

This fall comes with little warning.  Fall might blow bright on a Saturday and dull on a Sunday. When the crisp leaves no longer crunch and instead cling, gummed to the bottom of a nearly soaked boot, this is the fall that the masses dislike. It’s so wet, they’ll say. It’s so dark, my wife will say. It’s so muddy, someone else says.  It’s raw. The temperature might not break 50. If it does, it’ll settle at 51. The wind will blow. The leaves will strip. The gutters will clog. When we drive by the pumpkin patch we won’t hear laughter. No children searching for the perfect, orange gourd. We’ll just drive past without slowing and see the withering, muddied field, wondering why the farmer planted 10,000 pumpkins when he knew he’d only sell 600.  Real fall is full of second guessing.

This is the fall I love. The fall that’s dark. The fall that’s cold. The fall that might be wet and windy on Tuesday and dry and cloudy on a Wednesday. I don’t need the sun like you do. I need the comfort of a low sky. I crave the familiar of a late afternoon that already feels like evening, when the only lights visible are the window lamps, warming a room and reaffirming the distinct difference between inside and outside. In summer and in soft fall, the distinction is blurred. Windows are opened, doors left cracked open, wedged there by a fall boot that has no summer use. In the fall, the boundaries are once again established. Inside it’s warm and it’s soft and it’s comforting, the fire slowly consuming. Outside, the woodsmoke hangs just under that low sky and the deer walk quietly through the tall faded grass.

This is the fall I love. It might still be bright, some days. Peak leaves will be peaking this weekend, assuming they all haven’t been forced to the ground by the wind and the rain. It’s going to be cold this weekend. It’s cold now.  Some will run for the warmth of southern Florida. Others will wish they could escape the drear. The happy fall lovers will find this unsettling, while I’ll try to hide my enthusiasm. Because fall isn’t just for you. It’s for me, too.

 

 

Construction Sadness

Construction Sadness

I’ve decided, in the wake of the Cubs miserable, awful, embarrassing performance this week, to make every post a sad one. Monday, Multiple Offer Sadness. Today, Construction Sadness. Friday, likely, NLCS Sweep Sadness.  For those not paying close attention, I have been building a small fishing cabin not too terribly far from Walworth County. It’s not super far, but it’s still far. It’s far enough that it breaks my own rule for vacation home proximity, which is similar to last week when I broke my own rule about not burning fires until such and such. The rain was a cold rain!  And in the case of this proximity breaker, the trout fishing was just not good enough closer to home.

My relationship with construction is complicated. Extremely complicated. On one hand, I crave it. I enjoy the creativity the process allows. I enjoy the implementation of a vision. Sometimes, it’s a vision that only I can see, and so I take great pride in delivering what no one else expected. Earlier in  my life, this took the form of remodeling projects. When visitors would stop during various stages of the disaster that is a gut remodel, they’d shake their heads. They’d tell me they don’t think it’s going to work. I paid too much. I improved too much. I was always disheartened by those words, but they fueled my desire to deliver a product that would defy their negativity. In the end, the projects all resulted in success.

The last few construction projects have been new builds, from the ground up. This process is different but still the same. It requires a vision, but mostly it requires dedication to the process. The last house I built is the house I live in now. I finished that home in 2013, and it’s been a dandy of a house for me and my family. The construction process at that house was unique, in that I built the home when the market was poor which meant plenty of tradespeople were willing to work for reasonable wages. Further, those who weren’t affordable were available, and the project started in September and finished the next May. The current project is a handful of highway hours away, in a county where no one knows me and I know no one, in a region where work is a nice suggestion but not really something toward which anyone feels a particular fondness.

Once the land was purchased (that took two full years of searching), the project began. It was a modest project. 1200 square feet, give or take. A rectangle of a house with a tall gable and some cedar shingles. Much to the horror of this Lake Geneva market, I stained the shingles black. Like the night (my wife did much of the staining).  The bathrooms were lined with marble, or are, at least in theory, in the process of being lined with marble. My tile guy hasn’t reported for duty for a few months, but I’m sure he has a terrific reason.

When ground was first torn up by the rusted dozer that cut a twisty path up the side of that hill, the goal was to have the house finished in four months.  Maybe four and a half. Maybe less.  The dozer cut that path 16 months ago. The house is not yet finished. In fact, the house is not even close to being finished. I tell my wife that it’s almost done, and then I look over the list of things remaining. Trim, paint, floors, tile, bathrooms, plumbing, kitchen cabinets, countertops, appliances. It’s really not much of a list, or so go the unconvincing lies I repeatedly tell myself. The project, once a chorus of so much enthusiasm and light, has turned into a dirge.

The process has, however, afforded me many lessons. I sympathize on a deeper level with my Illinois clients who have a hard time getting contractors to do work here. I understand customers who are embroiled in multi-month, multi-year construction projects. How can something take so long? It just can. And I understand that better now.  In spite of the deep construction based depression that has consumed me, this project has given me an opportunity to practice what I preach. Give the market what it doesn’t expect. If the market expects carpet give it hardwood. Make it wide plank. If the market expects vinyl, give it cedar. If ceramic bathrooms with one piece plastic showers are good, then line the bathroom in marble. If Home Depot light fixtures light the neighboring comps, send all of your money to Restoration Hardware and use their lights instead. Markets give clues as to what construction standard is acceptable. If the market is nuanced and there’s an opportunity to create value by creating a superior product, then create it.

Lake Geneva Market Update

Lake Geneva Market Update

When times were particularly bad and getting worse, I hatched a particular theory.  The theory supposed that in spite of the various factors that we know prod consumers to buy and sell homes, things like interest rates and employment and marriage, there’s really only one thing that makes real estate markets move. In bad times, it’s fear. If you have $10MM in the bank and your $2MM home is only worth $1.7MM, do you need to sell it? Of course not. Then why sell it for $1.6MM? The answer, which we can only know now, is that you sell at $1.6MM because you’re afraid next month it’ll be $1.5MM. That’s why this market moved like it did from 2009 through 2012, because of fear.

And if it’s fear that drives a declining market to lower lows, then it must be the opposite that drives an escalating market to higher highs. Job growth is great, but it doesn’t fuel the top end at Lake Geneva. Interest rates are important, but are they? Stock market return are incredibly important to this vacation home market, and with steady returns piling up it makes sense that consumer confidence is as robust as it is. The opposite of fear is confidence, and it’s that confidence that’s driving the Lake Geneva market. And it’s driving super fast.

Another week, more contracts. More offers. More sellers wondering if their house is next, more buyers buying homes they didn’t know they needed but now can’t live without. There are 30 lakefront homes available this morning, per the MLS. Of those 30, nine are under contract. That makes just 21 available lakefronts.  Of those 21, several have active offers being negotiated. 20 true lakefront homes have already sold in 2017, leaving us to assume that we’ll break the 30 home mark for 2017.  Last year was a banner year, and we only closed 24 true lakefronts (MLS). If we break 30 this year, it’ll be even more important to remember that in 2007 we only sold 17 lakefronts. This new norm is really, really something.

This week, a lakefront closing. That of Kerry Wood’s house in Fontana. At $4.7MM it’s an okay sale. I don’t love it, and I don’t hate it. I’m ambivalent, which is how I feel about baked cod and maple syrup.  It’s a lofty sale for the frontage (102′), and the location (mostly homes valued under $2MM in the immediate neighborhood). It’s proof, once again, that our market loves new(er) homes, and will do just about anything to own them.

More contracts this week as well. A new contract on my listing in the Elgin Club. A new contract on a large Fontana lakefront listed in the $6s. A new contract on the non-lakefront modern home ($1.85MM) that sits on the cliff overlooking Fontana Bay.  A new contract on the house next to the Lake Geneva Country Club ($3.095MM), and a new contract on the Main Street, Lake Geneva lakefront ($2.495MM) that sits near the Library Park.  Hillcroft, that big estate with an older house that anchors 415′ of Snake Road lakefrontage is still pending ($12.5MM), as is the spec home in Williams Bay ($3.85MM) and the Circle Parkway lakefront ($2.95MM).  My South Shore Club lakefront also remains under contract ($4.595MM). Rounding out this flurry of activity is the small home on Marianne Terrace in Lake Geneva that’s under contract ($1.799MM).  The market is searingly hot. Breathlessly hot.

Do you think every deal is a good deal? Absolutely not.  Some of the deals I see are pretty awful. Embarrassing, really. But that ties in with Monday’s bit, so you already know how terrible this is. Still, the market is moving and there’s plenty of room left in 2017 for it to move further. Are prices increasing? Well, yes, they are. The wood sale just printed at $47,000 per front foot. That’s not the average, but a few of those in a year will skew our 2017 average to the very high end.  Continue to expect sales as we finish the year, and continue to expect many of these sales to be carried out by buyers who really should have done some more homework before they docusigned on the dotted line.

Above, my dynamite Loramoor listing.

 

Lake Geneva Agent Representation

Lake Geneva Agent Representation

We know lots of things. We know that if we don’t cut our grass once a week it will grow too tall and too thick, and when we cut it after the week off we know that the cutting will be difficult. It would have been easier to mow it last week. Once in a while, it’s good to let it go and struggle through the off-week cutting, to remind oneself not to skip the lawn. In the same way, we know we should floss our teeth. It’s a good habit, this flossing. I floss, sure, but when sitting in the dentist chair I have to both admit it’s not twice a day and then endure the chastising reminder. Flossing, it’s good.

In the same way, there are certain real estate things that everyone needs to remember. This is your Monday reminder. In an attempt to make this exceptionally easy reading today, I’ll distill the reminders down to just one.  What I’m asking you, no, what I’m begging you to remember, is so simple. It’s nothing complicated. It’s not painful like mowing too-tall of grass, or annoying, like flossing stupid back teeth. It’s so easy, anyone can do it. Best of all, this thing you must do doesn’t cost you any money. In fact, it will likely save you money, and also save you from the heaps of shame that accompanies the forgetting of this thing.

In part, I blame the internet for the way it has made all real estate, and all markets, feel the same. When zooming over a map of a county on Zillow, all the consumer sees is a “market”. A house here for $4MM, a house over there for $400k. A house down the road for $1.1MM and one over here for $200k. The market, when viewed through the lens of a smartphone, looks small and quaint. In the same way, an agent in Middleton is the same as an agent in Madison, is the same as an agent in Milwaukee. It’s all one state, and it’s a midwestern state at that, which means it must be simple and it must be easy.  For the Zillow tells us so.

I’ll tell you a secret about Lake Geneva. When an agent has a listing that he or she knows is overpriced and/or a very difficult sale, guess what we hope happens? Of course we hope the listing sells. That’s our job, to work and to hope. But we really hope a buyer shows up who is tethered to an agent who isn’t from our market. Make it an agent from out of state and our eyes light up at the naivety of it all. A buyer working with an inexperienced agent, or one who isn’t from our market, is a buyer that will likely make mistakes. If we’re the listing side of a grossly overpriced property, we hope you make the mistake soon.

This is the problem, and this is the reminder. Stop working with agents that don’t know the market. It seems so obvious, so elementary. Yet the market is full of buyers working with agents who aren’t active in the particular segment they’re attempting to sell.  There’s a reason I don’t go to Door County and sell real estate on Thursdays. There’s a reason I don’t go to  Bayfield on Wednesdays and Elm Grove on Fridays. I’m pretty good at this real estate game, and I know my limitations. If I don’t know a market I’m not going to represent myself as an expert in that market. It’s just that easy.

If you’re a lakefront buyer seeking a Geneva Lake property, is it in your best interest to walk into a real estate office on a Saturday and sign up with the agent standing in front of you? Would you visit the walk-in clinic to have your kidney transplant performed? Real estate is not as complicated as surgery, but the analogy of a surgery taking place is indeed accurate in that real estate surgery involves removing too much money directly from your pocket. If you’re looking for a $3MM home in  Hinsdale, work with an agent who routinely sells $3MM homes in Hinsdale. If you’re looking for a $200k condo in Lake Geneva, work with an agent who routinely sells $200k condos in Lake Geneva. And if you’re looking for a $3MM lakefront home on Geneva, work with the agent who routinely sells $3MM homes on Geneva. And if you have a dentist appointment tomorrow, start flossing right now.

 

 

 

Fall At The Lake

Fall At The Lake

Of the things we know to expect during an autumn here, 95 degree sunshine is not among them. The heat is rare, but in a summer devoid of any lasting heat, I don’t know how we could do anything but welcome this heat with open, sweaty arms. It’ll be cold soon, consistently cold, where the days that hit 60 will be the summery ones. We’ll delight in those days, saying they’re too warm to wear a sweater, and we’ll sweat just a bit and we’ll be happy. For now, the green is fading but the summer remains, which leaves us little choice but to hold onto it like grim death.

This is something we don’t expect, but there are now market things we should expect. If we don’t expect them, that’s because we’re working with the wrong Realtor, which isn’t so much my fault as it is yours. The things you should expect are both obvious and yet, many of them are contradictory. That’s Lake Geneva in a single sentence. It makes perfect sense as long as you understand that sometimes up is down and often down is up and expensive properties sell so long as they have a Wolf range or so long as you’re the buyer who just latched onto a Realtor that you met because that Realtor was working floor time at the office on a weekend.

Sellers. It’s September, and sellers who haven’t yet sold are a bit concerned. Some are, some aren’t, but the general theme amongst aged inventory is some cautious concern.  There are two things that must now happen. First, asking prices should soften. This is not going to be the case for all sellers, but for some, prices will adjust as sellers look toward the off season. Second, what off season? Our market will remain vibrant up through Thanksgiving and beyond, with just a seasonal adjustment being made for Holiday weeks when only the faithful few will be actively buying and selling. The key for sellers is to understand the market remains hot, and will remain so, no matter if our 90s fade to 50s. Lake Geneva is still king, and kings do not relinquish their crowns when the temperatures drop, they just wrap themselves in some fine custom garments.

Buyers.  There are lots of you out there, and lots of you are making terrible, terrible mistakes. I try to warn you, but some of you insist on waltzing into real estate offices and make the assumption that the warm body in front of you is going to be your best chance at securing lakefront, or lake access value. This is sadly not the case, but you keep doing it anyway. There’s a funny game we can play. It’s called look at properties that no one thought would sell for the prices they sold for, and often you can find the selling agent to be an agent that doesn’t routinely work the lakefront market. To be certain, all agents are not created equal, though agents love to attempt to punch above their weight in the lakefront market because the prize money is alluring. Agents who sell $205k ranches in Elkhorn are not the agents who routinely sell $3MM houses on Geneva Lake. I’m begging you to understand this.

But for buyers there are still deals to be had. There is aged inventory that has been fielding and rebuffing offers all year, and those properties might be open to negotiations.  My recent experience is that sellers are still far too confident. Solid offers are being declined, because there is too much optimism. Sellers don’t seem to understand that 9/10s of a bird in the hand is so much better than 10/10s of a bird in the bush. This is what the game has come down to- fractions of lofty valuations- and sellers are proving their lack of real estate prowess by routinely ignoring solid, market bids.

If we’re buyers, does this mean we give up and look to another lake that might more feature more motivated sellers? Just because it’s September does this mean we wear boots and jeans when it’s 95 and sunny?

Above, my Elgin Club lakefront, now $1.925MM. It is, in my infallible, expert opinion, the best lakefront on the market priced under $2.5MM.
Sell The Lake Geneva Riviera

Sell The Lake Geneva Riviera

In a recent Lake Geneva Regional News article, City of Lake Geneva Alderman John Halverson, when discussing the state of the Lake Geneva Riviera and a desired multi-million dollar referendum for repairs asked, “If we don’t get it passed, what should we do? Sell the building?”

I’m so glad he asked, so that I can answer.  Yes. That’s the answer. Sell the building. The question was posed rhetorically, in a way that would suppose a yes answer would be ludicrous, even sacrileges. But the best way for the City of Lake Geneva to deal with the aging Riviera and the several million dollars of repairs it supposedly needs is to sell the building to the highest bidder. To keep the building beyond 2017 would be a significant mistake, and would prove once again that the city has no regard for the tax payers who already pay the highest rates around the lake.

I’m not suggesting the building be sold in a traditional manner, wherein the new owner would have the flexibility to do with it as he or she pleases. I’m suggesting that the city utilize the power of deed restrictions and covenants to clear an aging liability from their books.  The Riviera is a most impressive structure, and its unique location and design lends a visual boost to downtown Lake Geneva and that commercialized lakefront scene. The structure has anchored downtown for generations, and should be respected.   In the 1930s my grandmother would ride the train up with her sisters to dance at the ballroom on Saturday nights. She met my grandpa there, while he was hawking popcorn or cigarettes or newspapers. The Riviera has a deep and important history, and the building itself should be preserved. That’s why the property should be sold. Here’s how it could work.

The city slaps deed restrictions on the property, dictating the allowable future uses and the exterior design and color palette of the structure. What happens to the interior shouldn’t be any concern of the city, especially once they receive a few million dollars for the building.  With the deed restrictions in place, the aesthetics of the Riviera and the setting will be secure, no matter who owns the deed. There are options as to how to sell the space. The city could rezone the building into a condominium, and retain the lower level retail spaces to be operated as they are today. The problem with this model is that the city would then still be on the hook for repairs, that’s why it’s best to sell the entire structure. Separate the park from the building, retain the park (the fountain, etc), and sell just the building. The entire thing.

Who buys it? Well, I don’t know. Maybe one of the nearby local business would like added square footage? Maybe the cruise line operating from the adjacent city pier system?  The cruise line could utilize the space for some offices and use the ballroom for a wedding venue, just as it is used today. The difference is that rates could be increased exponentially from those paltry sums the city charges, and the building could be modernized to host more events.  Some might suggest the increased usage of the facility would be a negative for the city. I’d argue that the structure is a ballroom. It wasn’t built to sit idle. It was built to host bands and dances and parties of epic proportions. Why not let the private market return the building to its original intent?

The city has estimated the repairs to be in the neighborhood of $5MM. My estimates that I’ve considered now for all of five minutes prove that the cost would be significantly less. The problem is municipalities pay retail plus for everything they do (just check on the cost of school construction for proof). The private market could handle those repairs for less than a million dollars, likely with ease. Yes, a new owner would have to undertake these repairs, which drives up the initial investment. Yes, the fact that the city has broadcast these repairs to the world means a buyer will use the city’s figures against them in a negotiation.  Yes, that might mean the building sells for less than it might otherwise sell for. But the alternative is worse. The alternative is the city taxes its vacation home owners to fix up a building that loses money. To repair the Riviera on the taxpayer’s dime is the very definition of throwing good money after bad.

The idea of selling the Riviera hasn’t been discussed much in public, but it’s time the conversation begins. There is no reason for a city to own such a valuable liability. Deed restrict it. Zone it to allow very few select future uses, and sell it to the highest bidder. Since I am nothing if not a fan of Lake Geneva, I’ll even offer to sell the building for the city at a reduced commission rate.

Summer Night

Summer Night

There is some thought, rampant among those who cannot yet know, that a night is a night is a night. The night it dark here, just like there, in fact like every night. Night.  Those who love the night take great pride in this universal truth, that night is dark and it’s dark everywhere. In the daytime everything can be different. Every place its own, each unique. Some places with high mountains and cold rivers, others with wide plains and low, wet marsh. Some other places teeming with dark leafy trees and little dotted lakes, clear perhaps. Daytime, now that’s different because it looks different. But in the night when there’s nothing to see, each place is the same: dark and quiet.

But that’s not at all true. The night is filled with sounds, each season its own, each place its own. A winter night under a brilliant cold sky is something to behold. The deep, snowy still of a leafless and seemingly lifeless field contrast under the brilliantly bright stars.  But it’s not something one can savor. It’s too cold to dwell, and in, and so a winter night is something gulped in deep breaths and left alone. It’s still night outside, but inside with the wood fire and the warm lamp light is much more comforting.

A fall night is a noisy night, a windy night, some rain maybe. But that’s not entirely true. A fall night can be as alive as a summer night, or as still as a winter night, or it might be anything in between. There’s no rule for fall, nothing it must do. What it will do is build to a colorful crescendo just before it ebbs and falls silent. Fall is like winter without snow, unless it isn’t.

But those summer nights. In our memories, they all sound the same.  Crickets and hoppers, chirping and singing their redundant tune. Softly fading as the night wears on, only to be replaced by the chirping of song birds once the morning light is near.  This is what night at my house sounds like. My house, surrounded by prairie and distant trees, alive with the casual rhythm of so many field bugs. An occasional rustle in the grass, a rabbit hiding from a fox. A coyote clinking through the wooded edges, thinking about which chicken it will steal. There are other characters in this prairie night, but the stars are those bugs that I cannot identify, crudely scratching out the sound that I’ve come to love. Summer days can wear on me, but the sound of a summer night has yet to grow old.

I spent a few hours last week on a lakeside screened porch. The sounds were those of my childhood, a slow churning boat pushing through the night, returning its guests after dinner. Or the other boats, the large boats with parties aboard, spinning around the lake and clearing each point,  the dull murmur of the happy crowd reaching across the window and to my childhood bedroom. But what struck me wasn’t the familiar sound of a few slow boats. It was the quiet of it all. It was the distinct sound of a Geneva lakefront porch.  The steady but louder pitch of the cicadas, a sound I know well but one that I don’t hear at my prairie house. The quiet hush of leaves flittering in a late night lake breeze.  Next time you think a summer night is a summer night, spend one in a screened porch next to Geneva Lake. You’ll soon be like me, well aware of the privilege of a summer night anywhere, but equally aware that there is one place where that night is better. At the lake.

 

700 South Lakeshore Sells

700 South Lakeshore Sells

When I listed this property last August, I knew exactly what it was. It wasn’t the most perfect house on the lake. The kitchen wasn’t exactly the current style. But it was 4 acres and 162 of frontage with so much square footage and so many resort-style amenities. The house had been listed off and on for what felt like ages, as if anyone really knows exactly what an “age” feels like. Still, the property was repositioned with the help of a fresh perspective and some fresh marketing efforts and I was pleased to work for that seller to get that property sold.

Last Friday, I sold 700 South Lakeshore in the city of Lake Geneva for $5,900,000. The sale is the fifth over $5,000,000 since the start of last year. Of those five sales, I’ve represented the seller in four of them. I’m not really sure now what else I can do to help convince the upper bracket market that I’m the man to handle these luxury listings. Perhaps the secret will be unlocked after I sell five out of the last six…

While I’m happy for the seller who now gets to move on to the next chapter of her life, I’m exceptionally pleased for the buyer. This is a new lake owner, with a new reason to look forward to the weekend. There’s something extra rewarding about selling a lake house to a first time Lake Geneva owner.  They don’t yet know what they’re in for, but I do. We do.  A very special thank you to this seller and buyer who allowed me to help bring this sale together.

Colors

Colors

By now, we all know that things haven’t been going our way. We started out with that winter, so intent on enjoying it and skiing it and sledding it, scraping and shoveling it, too. But what happened wasn’t anything like that. We skied, a bit. Shoveled, a bit. Scraped, some. But the winter had come and the winter has left and nothing really happened. It was a winter without. We knew what would come next, and we waited and we waited and in February it came. Bright spring. Sunny spring. Warm and soft, spring.

That was a few days, maybe four, and it was February and no one thought it was really spring. Winter returned, but it was easy winter, annoying winter, just enough winter to ward off spring.  That winter relapse was quickly forgotten and there have been days of spring, days of warm, soft sun, and days of wicked wind, biting cold. Then the rains came, so many rains with so much water, sheets and sheets and buckets and buckets. No one thought it could last, but it did, and it washed our streets and soaked our lawns and filled our lakes.  The season isn’t so much spring, it’s just a rainy winter.

There are barns between my house and this desk. Many barns. Most are clad in metal, some form of sheet paneling either vertical or horizontal, typically in fleshy tones of white, gray, or brown. In the winter landscape, these barns blend in, offering no excitement, no allure, just utilitarian usefullness. But there is one barn painted the brightest of reds, and in the winter it is a beacon on my drive, a visual reminder that color exists even in the dullest of dark winters. In the spring, too, when the ground is gray and what isn’t is brown, and the tans of the cut corn stalks and the dull olive of the roadside grass means everything is quiet and stark, that barn shines bright and vivid, a reminder of color in an otherwise colorless world.

But these rains and this sky and this gray and this brown, it’s not all bad. My eyes can rest under this sky. There’s no strain here, no squint to see beyond the glow, because there is no glow. It’s just March in Wisconsin and things are easy on the eyes. The north side of Geneva Street is greening this morning.  The grass is greening and the bulbs are shooting and the crocus is blooming. The dull wrens of winter are being crowded out by the orange breasted robins of spring, and soon, the elusive Orioles will coast in on a southerly breeze in search of our fresh cut oranges and our purple grape jelly.  The piers are falling into place, now dulled and chipped by the winter but soon scraped and painted and bright again. The water is warming, slowly, but it’s warming and it’s still blue, even in the face of so much gray it is still blue. The grass is greening and the flowers are awakening and the sky is brightening and soon it’ll be the spring we’ve seen in our minds all winter. Prepare your eyes, the color is coming.

 

Photo courtesy Kirsten Westlake

 

Walworth County Market Update

Walworth County Market Update

When you’re a Realtor, you’re supposed to want to do everything you can to sell anything you can. You’re supposed to pay attention to every segment within your market, to the goings on in the rental world, to the commercial things, to vacant land and to that cute bungalow in town. The one near the school.  Realtors are told to be experts. In the next breath, they’re told to be always available, always present, always here for whomever it is that requires service. This is all a terrible mistake, and not coincidentally, this desire to do all things is the reason that most agents can’t achieve success.

Now, take this guy on the other hand. I don’t really want to do any business that isn’t the sort of business I want. If you own a wonderful apartment building in Elkhorn, I’m super happy for you. But I don’t know enough about the rental market in Elkhorn and the desired returns of that particular investor community, so I can’t (and won’t) successfully work with you. I’m not a commercial guy. In the same way, I don’t know anything about the single family housing market in Darien. I heard it’s okay. Taxes are high. That’s all I know, and as such, you wouldn’t be doing yourself any favor if you were to wish for my services in Darien.

The benefit of this narrow focus is as obvious as the detriment. I am not all things to all markets. I’m all things to one market. That’s my goal, and that’s my life, and I’ve made a decent little living serving only one master. But today isn’t about me, no matter how well I’ve done so far to leave you with that impression. Today is about the broad Walworth County market. Today isn’t about Lake Geneva, it’s about everywhere else. The markets in these other areas are thriving. Absolutely, positively, thriving.

Want to buy a little cottage on Cherry Street in Williams Bay for less than $200k? So did someone else. The house is pending. Want to buy a vinyl ranch in Lakewood Trails? Yeah, so does everyone else. Feel like a little starter house in Delavan for $69k? Too late. It sold. How’s about a late 80s raised ranch, complete with some sort of brown brick and a mismatched brown roof? Pending.  Delavan is doing well, except on the lakefront, where there appears to be just one home pending sale today. Earlier, I meant to say everywhere is going fantastic, except Delavan Lake.

Want to find a reasonably decent house on 3-5 acres in the country somewhere? Nowhere in particular, just somewhere around here-ish?  Ideally under $400k. Good luck! Those homes are selling at a feverish pace, and inventory is low.  Darien has 14 homes available, five are under contract.  Elkhorn has 34 homes for sale. 18 of those are under contract. Nine others are pending sale.  That’s absolutely remarkable if you think about it. Amazing, really. Well done, sub-$250k buyer. You’re buying, and you’re smart.

Why is the primary market here doing so well?  It’s thriving today because the prices are still modest, still reasonable, still affordable. The interest rates are low but rising, and this market is super sensitive to rates, and to the threat of increased monthly costs. The primary market is performing well, but over $350k that strength dries up. Consider the city of Lake Geneva, where 40 homes are available today. Of those 40, 25 are priced under $350k. Of those 25,  ten are under contract. Another four are pending.  Over $350k? Not a single under contract or pending sale.

And all of that makes solid sense. The primary housing market is driven by those people who work here, and most of the jobs in a resort market are the sorts of jobs that can support home ownership on a modest level. A nice Walworth County job can buy a $275k colonial on a lot that was home to corn not so long ago, but most Walworth County jobs cannot support purchases over $350k.  But this isn’t about jobs and it isn’t about interest rates and it isn’t about me. It’s just about the primary housing market, and today I tip my hat to a vibrant market segment that I have absolutely nothing to do with.

 

Photo courtesy Kristen Westlake.
Peace

Peace

In the stillness of an anywhere field, there’s a stream that babbles and weaves and spills. The stream is loud.  There are birds both quiet and noisy, some fiddling about to themselves and others calling in friends, mates, or warning others to steer well clear. A deer in the distance makes no sound, slowly chewing the most tender blades of fresh spring grass.  Two rabbits hop as rabbits do, barely crunching the dried winter leaves they bound over. There’s a soft quiet hum to this distant field, a peaceful way in which every noisemaker plays their part in this unintentional orchestra. The sounds of this field on this day are the sounds that anyone can hear in the background of whatever their noisy present might be.

The lake on that July Sunday is so blue. The waves are pushed by so much wind, starting in the southwest and blowing to the northeast, breaking all the way. These winds are steady, eight or nine knots, the sailors would guess. The steady crash of the waves against the shore provide the unexpected percussion.  The trees sway, so many maples and oaks and walnuts rocking back and forth. The white noise of the day, some others would say. Something you can hear but easily ignore.  There’s a quiet bass of a distant Streblow, or is it a Shepard?  Children splashing at the pier two doors down, the soft squeals of city children as they find confidence in jumping off the outer horse post.   Fishermen ply the waters, flipping their silly jigs towards the piers and under the buoy tied boats. Those boats, they click and they clack when their buoy chain bumps the clasp of their bow. A couple walk the shore path, no words are spoken.   The day wears on, the boats change, the shore path leads the way, and the wind slowly falls as the sun dips low.

Is one of these two scenes more peaceful than the other? Is the sound of a stream in a wildflower field any more serene than a steady parade of waves marching from one end of this big lake to the other?  Does a breeze blown tree in a lakefront lawn make for a different background than a breeze blown tree in the middle of the darkest, loneliest woods? Is a stream-side lunch any different than a lakeside lunch, eaten over wicker table in the cool porch shade? Is there any difference in quality between peaceful solitude and peaceful company? Is the sound of a distant car making its way down a gravel road somehow preferable to the sound of a Cobalt heading West towards the setting sun?

I love Lake Geneva, but good luck finding any peace and quiet. I love Lake Geneva, but there’s no solitude. I love Lake Geneva, but there’s no place to just rest.  These are the comments of those who visit our lake but have not yet found the time to understand our lake.  The magic of this place is not in its tourist-centric downtown, nor in the way boats can clog the outer ring of the lake on any given weekend. No, the magic of this place is in its ability to make a lakeside porch,  pier, or patio, complete with the background noise of lapping waves, rumbling boats, and children splashing in the shallows, one of the most peaceful places to read a book. To nap. To eat a summer lunch. To be still.  There’s no trick to making a place void of people peaceful. Even Michigan can do that.  The real trick is making a place so full of company a place where solitude is simple to find. Where rest comes easily. Where peace comes not with complete silence, but with the lovely hum of an unmistakable summer soundtrack.

Lake Geneva Market Conditions

Lake Geneva Market Conditions

I had a dream last night. In the dream I was just myself, no one else. I wasn’t able to fly, or able to breath under water; nothing terrific like that. I was just a Realtor in this dream, going about my Realtor business. I was in a living room, someone else’s living room, not a room I had been in before. It wasn’t a very nice living room, but it was okay, I guess. In dreams, decor rarely matters.

The seller was someone I knew. A kid I knew a few years ago, he couldn’t be more than 22 now, as he was in the dream. He was sitting in his house, except in real life it is his parent’s house, but not in dreams. It was his house and he wanted to know how much it was worth.  He kept repeating three million dollars. He was intent. Three million dollars. Maybe three million five hundred thousand dollars. He wasn’t sure.

I was uncomfortable in the dream. I wanted to hear him out, to listen to the myriad reasons his house was worth this much money, and so I sat on the couch as he pointed to comps. The comparables were indeed nice homes, lakefront homes, big ones and fancy ones and I had sold many of them. I nodded along with his charismatic plea. Three million dollars.

When it was my turn I explained that those homes were large lakefront homes, and that his home was a small A-frame located two blocks from the lake. He sat back in his chair, feigning disgust at my lack of enthusiasm. I used the example of the Knollwood house that sold two years ago for $2.2MM, and said that the only reason that home sold for such an incredible number was because the home was so amazing. It was perfect, I said. Luxe Magazine, I said. Three million dollars, he said.

When I sensed I was making some progress with him, I asked what he had into the house. He said $300k. I said, “you mean your parents had $300k into it”. He smiled and acknowledged that yes, it was his parents’ money and their investment, not his. I told him he’d be lucky to get $400k for the house, but that he shouldn’t be so upset because that’s a lot of money for a kid his age. The dream ended without any further commentary. I’m uncertain if I got the listing, but it didn’t matter because I didn’t want it anyway.

This was a dream, but this is my life today. The market at Lake Geneva is filling with competition, I should say, with other agents whom, no matter their lack of knowledge or prior success, are intent on telling the world of their proficiency. The competition isn’t that, but it looks like it when you drive around and see names on signs that you’ve never seen before. It’s a market chock full of agents, of open houses, or letters and websites and Instagram hashtags. Experts are everywhere. Things are changing, and it’s the competition in the business of real estate that’s often bad for the consumer.

And that comes back to my dream. Sellers know the market is hot. They know it because all 500 some agents in Walworth County are telling them. Hot. Hot. Hot. And so agents are bidding up the listing prices of houses, especially lakefront houses on Geneva Lake, and sellers are feeling flattered by all the attention. The dream I had was just that, a dream, but it’s based on the reality of this season. Sellers, a note of caution. A hot market means there are market buyers for your house. Someone might even pay 5-10% more than the market value if they love it enough. But if we take the bait and price homes too high just because there’s a slight chance we’ll get away with it, we’re going to damage the market by filling it with overpriced homes that will, ultimately, drag on the market and put downward pressure on the unrealistic listing prices.

Buyers, work with an agent who knows the market because they’ve proven that they sell the market. Sellers, work with an agent who knows the market because they’ve proven that they sell the market. This isn’t really that hard.

Lake Geneva News

Lake Geneva News

I try my best to avoid involving myself with the municipal governments in this area. I care deeply about what happens here, about the future, about the way the whole thing seems to be turning out. That’s why I fight development, because it’s unnecessary and it’s evil and I wish Chicago developers would worry more about Chicago developments than rural ones. I shy away from fighting with the municipalities over things I feel are wrong, because the fight here is skewed and largely unfair. That’s because the tax base is large, owing that entirely to the vacation home set and their weekend homes, and yet the voting and decisions are carried out solely by those who live here full time.  The residents vote to spend the tax money of their neighbors who don’t have a say in the matter. That irritates me, and so I generally let sleeping, bloated, tax ladened dogs lie.

But sometimes it’s all too much, and I need to say a few words about the local happenings. And so here it goes. First up, more rumors and innuendo and hushed threats over the Geneva Inn. This is the old hotel on the southeast corner of the lake that used to be known as the Shore Club. This restaurant/hotel is in Linn Township, but the city of Lake Geneva covets it, and the development groups who eye it routinely wish to annex it to the city of Lake Geneva so that they can obtain city water and sewer. There’s much to discuss here, but there’s only one thing that matters. Development in this corner of the lake would be bad for the area. We do not need more development here, no matter what shape it takes, and we certainly don’t need some circus on that end of the lake. If you care about the lake and you like things the way they are, email the City of Lake Geneva and tell them to deny any annexation requests or development requests for the Geneva Inn.

Speaking of the city, there’s a new restaurant being built next to Popeye’s. Oak Fire Pizza, it might be two words not three, bought their building a few years ago. They renovated the building. They opened and they served me pizza that was decent, but soggy in the middle. Then they tore the building down and now they’re erecting a new building, to serve pizza. It’s a big gamble, a huge expense, but this is a good thing for the area. I don’t like development, this is obvious, but re-development of existing things should be encouraged, always. Lake Geneva is at a bit of an intersection these days. On one hand, rents are too high and certain marquee locations are sitting empty, an obvious sign of landlord/tennant disputes over reasonable rental rates. On the other hand, renovation and expansion is occurring, which cannot be anything but good so long as that expansion is simply replacing the tattered with the shiny, and not inventing new locations to cram the shiny.

Williams Bay likes money. They like it a lot. That’s why they several years ago approved an auto repair shop to be built on their main drag, just a few hundred feet from the lake. Any reasonable town with a reasonable eye towards the future would have denied this request, but Williams Bay is eager to play with the big boys like Fontana and Williams Bay and so they approve things that shouldn’t be approved. Like when the Williams Bay School Board pulled a fast one on the town and was allowed to collect tax dollars to fund the demolition of the old school building but then decided, instead, to sell the school building and pocket the dedicated funds. Williams Bay now wants to build a fire house. A new, shiny fire house. The fire house will cost a couple million because why not? We need a new fire house because the old one is too small for $500k fire trucks, and there aren’t even sleeping rooms in the old fire house. I can’t figure out why a volunteer fire department who battles fires on such an infrequent basis would need to sleep at their fire house. Baby, don’t treat me bad, indeed. Tell the Village of Williams Bay to knock it off, fire houses are for cities, silly.  On the heels of building a $20MM grade school, it takes a significant amount of gall to expect tax payers to fund a new firehouse of such royal proportions.

Speaking of easy tax dollars, a massive TIF grant was awarded to the new owner of the Geneva Theatre. Geneva 4, it’s called. I watched Hot Shots there from the front row, my neck crooked skyward, because it was 1991 and we rode our bikes there and we were late. The theatre has been in disrepair for ages, and so a new buyer surfaced last year and the city handed out bushels of tax dollars to aid in the renovations. The theatre now looks interesting,  art deco ish, but interesting. It was supposed to open on March 1st, but it didn’t. It’s supposed to open today, but who knows if it will. I asked the theatre manager for a tour of the property this week but was ignored, so perhaps they don’t want me to write nice things about their efforts.  I can’t tell you if they’re opening or not, but judging by the number of construction trucks outside the theatre yesterday it appears as though they’re giving max effort. The theatre will be open by summer, that we can be sure of, and it would be nice of you to visit it. I’m happy something was done here, and I’m happy the theatre remains a theatre and not a handful of t-shirt shops.

The biggest threat to the Lake Geneva market is not from outside forces. It’s not from greedy developers. The biggest threat is from within. It’s from the boards that run these small towns, the board members who so badly wish to matter. They want to make a splash, for the children they say, for the future. For this and for that, but the efforts are almost always guided by cliche and misunderstood standards that are rarely, if ever, challenged. Development does not make a community better.  Fire houses with sleeping quarters are not necessary. Hotels should be hotels, not water parks with carnivals surrounding them. The county and municipalities need to protect this lake, to protect the interests of those who make their living here at the same time as they protect those who fund all of this with their generous tax dollars. The best path forward is always one of caution, and when markets get hot caution is the narrowest of paths.

March

March

There’s a thing about March. It is, without any question, the worst month of the year. If you disagree, that’s fine, but I know deep down inside that I’m right. This is the key to winning arguments.  It’ll probably snow in March. It might snow today. It’ll probably be 65 in March, maybe 70. There is no ice left, that’s true of this March but not a typical March. What’s typical? March doesn’t know. March has no idea what it is, just that it came in like a lion and so it must go out like a lamb. March has no choice but to be the in between. Not winter, not spring, just something. A month, a space filler, a void. Ugliness, it will be at home here in March.

February, that’s winter all the way. Except this last February, where it was only a bit of winter but really none at all. It was spring. February showers bring May flowers, because in March, what could grow? February showers do nothing but wash some of the grit from the road and leave us wondering if we should rake out the fall leaves that accumulated behind our summer bushes, or if we should just put the rake away and prepare the shovel. It must snow again, right? It has to. It will. March, that’s when it’ll snow.

But this is the commentary of the weather obsessed, a troop I once belonged to, a long, long time ago. I broke free from those chains, from the chains that held my poor grandmother hostage for so long, in fact, right up to the moment of her death. I no longer live and die on weather, and when I see others proclaiming their misery simply based on the color of the sky I have to wonder why they, too, haven’t yet sought the salvation that comes from skyward ambivalence. I won’t care today that it’s gray and raining, and so I won’t care that March will be lots of that, with a bit of snow, or a lot of snow, who could say?

See, I don’t care about the weather anymore, not one bit. And it has led me to a place where things are much better. Wintery weather is just a reason to own skis. Rain is just a reason to own a house with a sturdy roof. And the summer sun is just a reason I must visit the dermatologist with increasing frequency. See, completely and entirely unconcerned about the weather. That’s why I can look to March not as an ugly month of the in-between, but rather as a month to prepare.   March isn’t spring, but the month sounds like spring, and when spring comes then summer follows. This is how it all works.  March is for preparing.

And what better time to prepare than when the skies are gray and the temperatures not cold enough to snow sport and not warm enough to do anything productive under the sun? There is no better time to prepare, and that’s why those who own lake houses shouldn’t sit around and wait for March to be over. They shouldn’t rest, contented in knowing that summer is still months away. I’m continually amazed by the lack of March motivation amongst the lake set. May, now that’s when they feel the burden of preparedness. But in March they don’t care. Must I remind you that last May we had summer that began as  early as the 20th of that month? How on earth can you enjoy instant and immediate summer if you spent March in the malls and on your couch?

If you’re a lake home owner, March is for getting ready. March is for buying a new grill because we all know your old grill is terrible. And why are you buying a Weber when we all know you can do better? March is for cleaning the gear room, where the life vests and the fishing poles and the paddle boards were hastily crammed last October. March is for doing the things that will make May so much better. But what about for those who don’t yet own lake homes? What about those who sit in the city or lounge in the suburbs, wondering what week long road trip they might take to pretend they enjoyed their summer? Well, March is a forgiving month for those people. March is a month for shopping. March is a month for buying. Yes, you should have been thinking about this last October, but you didn’t, because the Cubs were on their way to the World Series and you are forgiven for being obsessed. But now, this March, you’re running out of time but you still have plenty.

March is for getting ready. March is for looking. March is for contract writing, and then April is for closing.  Then May is for preparing and June is for enjoying your weekends in an entirely different way. If you haven’t even begun your search, that’s fine. Let’s get together this month. Let’s drive around and find something perfect. Let’s do this now because it’s March and there’s really nothing else to do.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

I’ve been writing 2017 on my checks with solid consistency for the better part of a month now. There are no more sixes that have been scratched into sevens.  It’s 2017 and we know it, the shock of a new year has worn off.   Spring is racing towards us, or it’s here, or it’s not, no one is sure.  The year isn’t old enough to judge yet, but at seven weeks, the market is ready for a 2017 assessment.

The best way to judge an early year market is not by watching the closing data. Closings in January were sales from November or December. They are hold overs that pay testament to the prior year activity, and so they aren’t important. No matter, there haven’t been any 2017 lakefront closings to discuss. But there have been some new listings to review, and in those new listings there’s a bit of a story. The market can be measured by sales, measured by inventory, but also measured by the market reaction to new inventory. Let’s discuss that.

Last week a new lakefront in Cedar Point came to market in the $1.5MM range. A few days later, that lakefront property had sold. A magnificent sales job by the participating agents? A super rare piece of inventory that throngs of buyers had been anxiously awaiting? Not really, just an entry level lakefront that came to market cheap, and sold quickly.  Every property has a price at which it will sell immediately, so there’s no secret to that particular sauce.   But the sale proves the entry level market still has considerable legs even after the high volume year that was 2016. The quick listing and sale is a good sign for our market.

Two other lakefronts were brought to market this year, one being my listing in the South Shore Club that you’re looking at in the above photo. That’s a great house, but I haven’t sold it yet. It’s only been on market for three weeks, so by now it’s only fair to recognize that I didn’t price it as a fire sale. Another home in the South Shore Club that hasn’t sold for years came back to market as well, leaving two available homes in the club.  Remember, these aren’t association homes priced as lakefronts. They’re $5MM lakefronts priced as $3MM association homes.

Another lakefront in Fontana hit the market at just under $6MM. That’s a nice lakefront home to be sure, and it’s only been on market for the past two weeks or so.  Three new listings in total, one sold immediately, the other two for sale.  No carry over sales from 2016 yet, although there are a couple that will be closing over the coming weeks as there are currently five lakefront homes pending sale (including new contracts on the Solar Lane lakefront and the harbor front home in Country Club Estates).  So where does that leave us? Do we have the makings of a dynamic 2017 or are we seven weeks into a dud? The quick sale in Cedar Point tells us that buyers are ready and willing to pounce, but the two available at the higher ranges suggest buyers are still measured, still cautious, still paying attention. After all, this is the Midwest and we do measured very, very well.

The only thing we know so far is that the market is low on inventory, which is the same thing we knew at the end of December. Without new inventory, there’s no fuel for this fire.  The stock market stability is wonderful for our real estate market, and interest rates remain low, albeit it at higher lows than last year.  And there are buyers, plenty of buyers. All we need now is some more inventory, and I expect the market will find a way to provide that in the coming weeks. If you’re a buyer in search of something you haven’t yet found, let’s talk.

Lake Geneva Lake Access Market Review

Lake Geneva Lake Access Market Review

That headline is clunky. But it’s only clunky because it has to be. Lake Geneva is the general term for our market. Unfortunately sometimes it’s too generic, like when people borrow the term to describe a listing near Pell Lake. Lake Geneva Area Home! That sounds better than “It’s Super Close To Pell Lake, Folks”. As for me, I don’t even know where Pell Lake is because I’ve never looked for it. There’s a chance it’s wonderful, but I’m betting against. Anyway, Lake Geneva is the market, it’s the city, and Geneva Lake is the lake. So when I say “Lake Geneva Lake Access” I’m describing the homes within the city limits of the City of Lake Geneva that possess lake access to Geneva Lake. That’s all. Onward.

I heard that the weekend Winterfest festivities were a bit crowded. As in, way too crowded. And this is the problem with Lake Geneva just as it’s a reason that people like it. If you like the scene, no where can it be found so easily. There are restaurants and shops and shops and restaurants, and we used to have like fifty coffee shops and now we only have a couple. Lake Geneva is the epicenter of this market, it’s important and it’s necessary. A fantastic lake and beautiful homes only take you so far, because when it rains or when it’s winter you have to be able to visit a town to buy things to eat and things to wear. Lake Geneva might be everything to our local economy, but in terms of our lake access housing market it actually matters very little.

That’s because for all of the real estate in the city, there aren’t loads of lake access homes. Much of the market functions like a lake access market as that area behind the beach and the library often trades from one vacation home owner to another even though that market (Maple Park) lacks specific lake rights.  In this segment, the homes immediately along Geneva Street, those homes that face the lake, they have been increasingly popular for the vacation home set. The homes lack private lake access but they have that view, and nowhere else can a vacation home owner so easily wake on a Saturday and stroll along the lake into town for breakfast. That’s pretty nice, but sorry Sorta-Lake-Access-Maple-Park-District, you’re not included today.

For 2016, just seven lake access homes within the City of Lake Geneva printed. They ranged in price from $568k to $1.35MM.  The lake access market there consists primarily of Geneva Manor (two sales for 2016). This association on the West side of town is fine, but the off-water homes lack boatslips and nearly all of them lack views, and so you’re buying a home in a neighborhood that affords you a private park and swimming piers, but no slip. It should also be mentioned that you’re buying into a tax-heavy environment, as an offer water home in Geneva Manor that prints in the $800k range will soon receive a tax bill in the $18k range. That’s rough, and while the lakefront market generally absorbs the city taxes much more easily, the lake access market there suffers a bit for it. Then again, most buyers don’t even think about that before they buy, so perhaps it matters very little.

 

Further away from the city but still within the city limits, Geneva Bay Estates. This association had two sales last year, both of rough homes in terrific locations, both possessing a boat slip. These homes sold for $575k and $825k, respectively. Geneva Bay Estates is off of Snake Road, and it’s highly desirable. Low density, low overall house count, and a pleasant lakefront park and pier system make for a high quality lake access association.

On the other side of the city there are several associations that offer its owners private lake access, but they are lesser known because they’re not very large. Maytag Estates and Somerset are the largest here, and one off-water sale did print in Maytag for $1.35MM. That was a decent home with a slip and some views. Somerset had some inventory last year but no MLS sales. To the North, Pine Tree Lane had a sale with a bit of a view and no slip for $545k.  One other home sold, but it was technically a condo on Wrigley Drive. That home sold off-water with a slip for $1.030MM. It was a nice house, but with limited outdoor space, no lakefront park, and a pier shared by three owners.

Today, just two off-water lake access homes are available in the city. Our low inventory theme plays no favorites, as every association and municipality is plagued by a lack of inventory at the moment.  Plenty of buyers want to be near to the city of Lake Geneva, and there are good reasons for that desire, as the scene there is difficult to beat. The convenience of walking into town for a Sunday morning breakfast or a Friday night fish fry is meaningful. But along with that convenience and activity you have to consider the throngs of vacationers that arrive in that city on the weekends. It can, at times, feel like too much. Like at Winterfest, when the bars are full and all you really wanted was a Badger Burger.

Lake Geneva’s Winterfest

Lake Geneva’s Winterfest

I admit when it comes to events that I lack enthusiasm when compared to some of my enthusiastic competitors. Chili Cook Off Dinner This Friday Night! I can’t bring myself to care about that. Elkhorn Rotary Club 23rd Annual Pot Luck Dinner This Sunday!  That means nothing to me.  I can’t even feign interest or enthusiasm or concern.  That’s part of what makes this blog somewhat difficult at times. I don’t really want to write about things I don’t care about just for the sake of being an involved member of this community. That’s because the community, as I see it, is different from the way it looks on Facebook, because that’s a particular lens that I don’t own. Not everything is fun, not everything is interesting, and not everything is something you should attend.  SUNDAY SUNDAY SUNDAY MOVIE NIGHT AT SHOWBOAT IS “JUMANJI”!!!!

It’s because of this that I have shied away from telling you about every little goings on in this market. I don’t really tell you about things in the way that I used to, because it seems insincere to me if I tell you to do something that I don’t want to do myself.  Do you care that this Sunday you can go to Pier 290 and watch the Super Bowl? Neither do I, because I can watch that game at home and since I write this to my Illinois clients I’m guessing that very few of you (none) want to stay at Pier 290 until late Sunday night when you likely have to work on Monday morning. So I’m not going to tell you to watch the Super Bowl there, because I don’t really need the content and I’m aware that such an invitation is likely to be ignored anyway. That said, there is something worthwhile this weekend.

Lake Geneva’s Winterfest is this weekend, and it’s important not because of what it is, but because of what it represents. Yes, there will be snow sculpting on display and those displays are worthy of your attention. The competitors are skilled and they slave away to create something that is only valued until it melts, which, according to our forecast, should be sometime around Tuesday of next week. This work is akin to a famous chef making the best of meals, the fanciest of meals, the most expensive of meals, and you’re lucky enough to score an invite to the dinner table. But like a fine meal that won’t hold up well to microwave re-heating, the snow sculptures are best enjoyed fresh, before the dolphin’s nose melts and renders the once vibrant animal a lowly manatee.

The sculptures are one thing, perhaps the main thing, but there’s the ice bar at the Baker House, helicopter rides for those uncertain they care about making it to Monday, and other fun things as well. There’s a scene here, and it matters because the scene plays out during the first week in February. We all know what the scene looks like in July, because it’s a summer scene that has likely been seared, pleasantly, into each of our minds. That scene is so very lovely. But this is a winter scene, and it matters because Lake Geneva isn’t just a place for summer. It’s a place that thrives in all seasons, in the spring and summer and in the fall, yes, but also in the dead of winter. The scene is alive, this town in action, never taking time off, always here, open, ready.

And that’s why it matters. Many resort towns, especially in the Midwest, fail at one season or another. The Northwoods will gladly allow you to be mosquito bitten in the summer and frostbitten in the winter. This is what the Northwoods does.  Door County will sell you ice-cream in the summer and show you their roof-goats with great pleasure. But in the winter Door County is closed, the lights dimmed, the scene on hold until June. Michigan, well, I’m not sure about Michigan in the winter because I visited Harbor Country once in late June and their season hadn’t yet started, so I cannot be certain exactly how terrible that place might be in February. But Lake Geneva is the same in summer as it is in the winter, it’s thriving, it’s bright, and it’s ready for you.

This weekend, come up for a visit. Walk the downtown. Take pictures next to the snow dolphins. Have a drink in an ice bar. And then come over and visit me at N1561 East Lakeside Lane in the South Shore Club. I’ll be holding that new listing open from 1-4 pm on Saturday, and it would be a shame for me to have to sit there all by my lonesome. See you at the lake this weekend,  when the scene will be on full display even while our Midwestern “competitors” hibernate.

 

Photo courtesy Lake Geneva Country Meats
Ski Towns

Ski Towns

When you grow up in the Midwest, you are taught certain things. You are taught that the Chicago Bears, the Green Bay Packers, the Minnesota Vikings or the Detroit Lions are your team. They’re your team through the bad and the good, whether you want them to be or not. If your son comes home one day and tells you that he likes the Seahawks, no matter if their quarterback went to Wisconsin or not, this is a terrible, awful day in the history of your family. You’re taught these things and you’re also taught one other thing that’s less blatant but nonetheless present. The Midwest is not as good as the other places.

The other places can be the coasts or they can be, as they tend to be, the mountains. It doesn’t matter which mountains, because they’re all better. See, in the mountains it snows and then it’s sunny and sometimes it’s sunny and then it snows. It’s not cloudy there. It’s not cold, either. It’s snowy and warm and sunny and still, super snowy. Wisconsin children cannot fathom how it can be all of those things at once, and so the desire to experience it grows. Should we all move to the mountains? It’s better there. This is what we grow up thinking, and then, one by one, the children of Wisconsin grow and leave this place, they leave to be bartenders and lifelong ski rental fitters, but none of that matters because oh, the snow.

This week, I worked in Lake Geneva on Monday and then I hung out at a fancy hotel in a little mountain town on Tuesday. I stayed there with my wife until Thursday, and now I’m back in Lake Geneva, working. The town I visited was less a town and more a resort, a shiny log hotel in a little draw called Bachelor Gulch. It was nice, this place, except when we had to evacuate because the hotel was on fire. It was burning slowly, they assured us. No need to panic. Throw this vintage wool blanket over your shoulders and sip this hot chocolate near this outdoor fire, it’ll be fine. The hotel was nice, the time spent worthwhile, the mountains as tall as I remembered them.

But this isn’t about these mountains. It’s about the parallels drawn from some time in the mountains and the rest of my time here. It’s about Lake Geneva, as it should always be, and it’s about the Chicago families I spoke with who were wearing the same patterned wool blankets and drinking the same ritzy hot chocolate. It’s about the search for something that can interject some excitement into an otherwise pattern plagued existence. That, after all, is why people board planes and fly to that place. For something different. There are no mountains in the Midwest, though I’ll happily substitute the Wisconsin Driftless for the Colorado Rockies, but that’s just me.

Because I’m me, and I’m fascinated by the real estate markets in unique locations, I had to ask about condos and houses and condotels and terrible, awful, embarrassing fractional ownerships. I asked a Realtor, a friendly enough fella who seemed to know what was what. I asked about this hotel and that condominium, about this small mountain town and that small mountain town. I asked about appreciation and decline, about the number of sales here and why such an astounding absence of sales there. I asked the things I know to ask. Because that’s what you do when you go somewhere and like that somewhere- you seek to own some of it.

After some time at that resort we left to ski out of another resort. Then we went to town in another town to shop, then to another place. This place looked like that place, except this place had a Starbucks in a house and not in a strip mall. The other places were similar to the place we started. Then to Breckenridge and Frisco and Edwards and Avon. Eagle and Vail and Copper Mountain. To all of them to look, to explore, to see what they have to offer.  Places to buy ski boots? Check. Places to buy hats and gloves? Check. Places to get a coffee? Check. Places to buy marijuana? Check. Places to buy those communist inspired Colorado logo t-shirts and hats and stickers? Check. A ski hill somewhere looming over it all? Check.

These were just some of the towns we visited, and with that exploration the pattern was revealed. The towns, each unique, sure, but each the same. The mountains all tall, the snow all white, the sky, contrary to what the brochures and my childhood told me, gray and heavy. To be a buyer in one of these towns is to be a buyer in each of these towns. To seek real estate in one is to seek real estate in them all. And I hadn’t driven north or south or particularly far west. I was just on a highway making stops and detours along the way. If I were a Chicago buyer seeking something in this place, how do I choose which place when the places are all the same?

This is the same way I felt when exploring the gulf coast beach towns 20 years ago. If Anna Maria Island was okay, would Longboat be better? Why buy in Longboat when Siesta Key is close? What about Port this or Royal that? And if those are fine, what about Captiva? Sanibel is the same, so there? Fort Meyers seems okay, along the beach anyway, but Naples is so close. Marco is close, too. All of these towns possessing similar things- shops to buy shells and shops to buy t-shirts and sunscreen. The ingredients are all the same, so how to choose which place?  How can I buy in one when another one that I haven’t  yet seen might be better? This was my coastal problem and this was my mountain problem. Vail is nice, sure, but it feels too fake for me. Frisco, now that’s more like a real town, but my wife made us eat Himalayan food there and it wasn’t any good.

The way I feel when I go to these places is likely the way Chicago families feel when they visit this place, Lake Geneva. Why buy in Lake Geneva when Delavan is close? If Delavan is in contention, Lauderdale should be, too. Beulah isn’t far, neither is Mary, and if Mary is being considered then Browns should be, too. After all, each town has some places to buy t-shirts and cheese and you can get summer sausage at the gas stations in every one of these lake towns. This is why buyers here can find themselves confused, and as someone who visits other regions and feels that confusion, I’m here to help clear up any Lake Geneva confusion.

Lake Geneva is better than all of the other lakes. Plain and simple. It’s way, way better. Like a trillion times better. So don’t be confused here. Don’t look around as thought there might be a better lake around the corner. Don’t think you’re going to find something that we haven’t already bested. Lake Geneva wins, so stop your search. Just buy here. And if you think a mountain town is a better option, you’ll be shocked to learn that I don’t disagree. As long as you can jump in the car on a Friday afternoon and drive to that mountain town in 90 minutes, go for it. Otherwise, don’t be silly.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

The entry level lakefront market is a perplexing little market. On one hand, it’s obvious that a cheap lakefront on Geneva will always find an audience. This is unavoidable. On the other hand, the inventory is slight in this segment and yet there have been two entry level lakefront homes toiling under $1.4MM for much of this year and nearly for all of last. In the same segment, a new lakefront was listed last week and has since gone under contract (I’m not involved in the transaction). Not only is the new home in the same segment, it’s on the same street, and it sold without much ado even as the other two sit. This bothers me, but it proves the market absolutely loves new inventory and at the same time finds something distasteful about aged inventory, no matter what benefits the aged inventory can offer. New inventory good, old inventory bad, or so the market proves.

Last month the wide frontage on Basswood closed for $3.55MM. Lest you think this was some amazing, full depth Basswood lot, I assure you that it wasn’t as ideal as it first sounds. The property was wide at the lake, beautiful indeed, but the lot angled back to a sliver as it headed towards Basswood. Compare this to my listing on Basswood (more money, granted) that runs a complete rectangle from lake to Basswood, full of old deciduous growth. Still, the lot that sold is nice and the house could very well be renovated. I’ll be curious to see if there’s a sizable renovation there, or just a lipstick renovation, or if the structure follows the well worn path towards demolition. Time will tell.

That sale was the seventh lakefront this year to print at or over $2.75MM.  Not coincidentally, of those seven sales, I represented either buyer or seller in five of them, including the three highest priced sales of 2016. Last year at this time we had closed just four lakefronts at or over $2.75MM, so there’s little doubt that the market at the higher end has much more strength now than it did before.  As I wrote last week, what this upper bracket markets wants now is more inventory. We can’t sell what we don’t have available, and so there are buyers on the hunt and increasingly less game in the field. My large lakefront in Fontana is under contract, leaving just 11 lakefronts priced over $3MM for sale. Of those, two or three of them are in no danger of selling, perhaps ever.  The highest priced listing to grace our lakefront this year has just been reduced from $16.45MM to $14.5MM.

And that brings us back to the entry level market and the lesson of the week.  In this lower inventory environment, new inventory will always be met with excitement. Sellers who are thinking of waiting until next spring to list their lakefront home are doing themselves a disservice by not taking advantage of the market conditions that exist today. Why trade the relative certainty of today for the complete uncertainty of some time far into the future? The thing is, even with this low inventory environment, there are deals to be had. There are aged bits of inventory that look appealing to me, but that’s because I’m value driven and I know that just because the market hasn’t been excited by a property that doesn’t mean there isn’t value hidden under all those days on market. Below and above, my Basswood estate listing.

700 South Lakeshore

700 South Lakeshore

There are homes that you know. Stone Manor. You know this place. You know the Driehaus property and the Wrigley cottages. You know where the Pritzker’s live at their Casa. You know lots of houses, and you know this house, too. It’s big and it’s white and it’s by Stone Manor and if you’ve walked the shore path, well then you know it. There’s nothing wrong with knowing houses, because we all know them and we all pride ourselves on that knowledge. It’s hard for me to break this to you, but I know more houses than you. And I know this house, because I’ve been in it and I’ve seen it and it’s been for sale before. That’s why I’m not going to introduce this new listing to you today as a house that you don’t know. I’m introducing it to you as a house that you already know, but you likely don’t understand.

To be fair, I didn’t understand it either. It’s a huge house, massive, really. Too big for most, but somehow probably too small for some. The lot is big, but not overwhelmingly so. It’s just under 4 acres, with 160′ of frontage, so it’s large enough to be estate sized but not so large that you’re left wondering what to do with all that land. It’s close to town, so close you can walk there without first considering your footwear, but not so close that you hear the busy hum of the tourist choir. It’s private. Exceedingly so. Terrifically so. Yet it’s close. The sun sets in the West, this we know, and this house faces west, this we still know. The pool is lakeside, facing west, which is how a photograph like the one above can happen. The thing is, it’s not a rare picture. It’s not hard to take or hard to time. You just need spend any old evening at this house and wait for the shadows to grow long and the sun to dip over that western shore. 700 South Lakeshore doesn’t have to try very hard to be unique, it just is.

But of the house, past the gate and past the tennis court and not yet to the pool and the pier, the house. It’s a big house, big enough. It was built in 1996, and judging from my Senior Year yearbook the style in 1996 wasn’t exactly what you see today. The house is somewhat dated, with cherry where there would now be oak, and tile where there would now be marble. The thing about this house is that someone could buy it today and move in tomorrow and be remarkably happy. Or, someone could buy it today and do a surface remodel tomorrow and by next summer they’d be even happier. Would you rather remodel an old house, or a newer house? The question is as most of the questions here, not specifically meant to be answered.

This is a special property in a special location, and I know it now more than I ever did before. I know it because I spent three hours at the house last week with the videographer, making this video that you see here and watching that sun fall to the west. I sat on the covered porches, which are among the finest covered porches on this entire lake. I lounged on the poolside chairs, delighting in a pool that faces the lake in such an unavoidable way. I thought about how that walk into town is so short, so easy, and how the pier is sturdy and white and the landscaping a mirror of perfection. I thought of the gate and the tennis and the densely wooded grounds, and how the privacy was equal to the privacy I might find off some skinny drive in some middle section of Linn Township. And then I thought about this house, how I thought I knew what it was all about but that I really had no clue. It’s $6.495MM, it’s light years below replacement cost, and it’s available today as my newest lakefront estate listing.

Manhattan

Manhattan

I generally agree with the concept that what happens on the coasts will someday find its way to Lake Geneva. This is the case with both good and bad. New York has fantastic pizza. Lake Geneva will someday also have fantastic pizza. Washington had a Starbucks, and then a couple of decades later, we have a Starbucks.  This is good. In the same way, when something trendy happens on a coast, it’ll also soon happen here. But there are limitations to this, and that’s why the current correction of sorts afflicting Manhattan doesn’t mean there’s a correction coming swiftly to the Lake Geneva vacation home market. Here’s why.

My knowledge of the Manhattan real estate market is limited, obviously. If it weren’t, you could question my dedication to the Lake Geneva market. See, when Ryan Serhant opens offices in Miami and LA,  he’s not doing so because he’s somehow a Miami expert. He’s doing so because he’s a businessman and he’s smart enough to know his name will mean something to people even when it likely means nothing. Anyway, I don’t know anything about Manhattan real estate aside from what I read and what I see on television. What I see on television is that new developments are coming online all the time, and those new developments are not loaded with $400k condos. They’re filled with $4MM condos and $7MM condos and $14MM condos.

Lake Geneva is filled with $200k cottages and $300k condos and $800k houses and $3MM lakefronts. It’s a mix of things, with no particular segment requiring a tremendous amount of liquidity annually. This is one of the problems with Geneva National, as you’ll recall. It’s simply too big to maneuver through years of low volume without causing a price adjustment in the process.  The lakefront market on Geneva functions differently, as low volume is generally a result of low inventory, which in turn creates a market where prices escalate. So if you’re a buyer on Geneva you’re wishing for inventory and if you’re an owner on Geneva you’re wishing against it. This isn’t very difficult to understand.

But it’s back to Manhattan and those buildings and the sheer volume required to keep that market moving forward, appreciating and rare. What’s the number? I don’t know, because I’m typing from Williams Bay this morning. But the simple reality is that markets in forward motion require more buyers than sellers. Turn the tide and the market will stall. Turn it for long enough and the market will decline. If Manhattan is experiencing a decline, that’s too bad, but it doesn’t have anything to do with Lake Geneva. There will be a decline coming to our markets within a few years, this you can be sure of. But until the sellers outpace the buyers, that won’t be the case. I’ll be sure to let you know when it is. For now, I need to run home to snap some aloe open and lather it on my bright red nose and cheeks. The Lake Geneva sun was benevolent yesterday, and my face carries the proof.

Lakewood Estates

Lakewood Estates

I was the first broker to try my hand at selling the new Harbor Watch condominiums on downtown Lake Geneva’s waterfront.  I believe the year was 2002, because I was at that building for an open house when my wife called to tell me she was pregnant, and my son was born in 2003. So let’s assume it was 2002. The market back then was humming, the sky, some wondered, was it really even the limit? The market was ready for new things, for bold things, and with condominiums listed in the million dollar range, we were offering both. I hung on to that listing for a year, maybe less, maybe more, and I didn’t sell any of them. Buyers wanted fireplaces (we had none), they wanted more privacy (we had little), and they wanted to pay less (not happening). We offered a product that the market wasn’t ready for.  During the two or three years that followed my listing tenure, the building sold out, at prices less than we had originally wanted but still, sold.  The market caught up with the product, and the product made some price adjustments to hurry up the union.

Last year, I introduced Lakewood Golf Estates to the market. There was some initial interest, some slight interest along the way, and then, over the winter while the project sat off market, some more tepid interest. There was interest, sure, but no one bought anything. In that, I failed the development because the market didn’t respond. Late last year, just before the listing was to drop from the market to refresh, we made a bold price shift. Lots that were $450k would now be $250k, and in that, the developer listened to what the market had been telling us all season. We were priced too high, too soon, it was just too much of a gap between the market’s expectation and our price point.

Today, I’m bringing Lakewood Golf Estates back online. The prices are reflecting those huge discounts to last summer’s ask. The development is one year older now, the trees one year stronger, the gate now nearly completed.  When you ask a buyer to envision something there is always a risk. The buyer might envision something different than the developer, different than the agent, and in that interpretation of what might be, a sale can be lost. Now, we’re back, we’re done, and we’re ready to sell these lots. There are just 16 lots in total, which you’ll recognize as being a reasonably low total. I’m anti- mass development, as everyone by now knows, which is why this development fits my eye so well. It’s small, it’s exclusive, and it’s representative of the type of properties that vacation home buyers wish for at Lake Geneva.

To recap what we have here, it’s a development on a golf course, but that’s where the similarities to golf course developments begin and end. The golf course here is the private, member’s only Lakewood, where there will be a maximum of just 50 members allowed (per current membership information). The course is a full 18, and it’s complicated and simple at once, with the 75 acre private lake playing a large role in many of the golf holes. I’ve played the course often, and have set a course record for most balls lost, which is better than not owning a course record at all. The golf is good, but that’s not all we have. There’s a private, member’s only clubhouse, and access for owners to board horses in the on-site barns. We have pastures galore, and one needn’t be a horse lover to appreciate the way a grazing horse swooshes his tail on a summer afternoon. The lake itself is an attraction, too, with 75 stocked acres that kids and adults alike will find pleasure in fishing. It’s a great lake for practicing sailing in small scows, and for paddle boarding and kayaking and canoeing, etc and etc.

If you took a flier on this last year but didn’t like our pricing, come back for another look. It’s a unique development minutes from downtown Lake Geneva, and I’m of the opinion that the prices are finally correct. If you’d like a private tour that includes a round of golf on the house, let me know as I’m happy to oblige.

Barron’s Top 20 Second-Home Resorts

Barron’s Top 20 Second-Home Resorts

When the Chicago Tribune talks about vacation homes, it likes to talk about South Carolina. And then also about Uruguay. If not those, then Arizona, maybe Florida. Sometimes, Michigan. Other times, Door County. Once in a while Green Lake. Other times strange lakes in strange places that I’ve never been to. If the Chicago Tribune is doing the writing, then the elephant in the room is Lake Geneva. It’s so close and so known, they’d rather just ignore it. For their shame.

Barron’s is headquartered in New York. That’s a far distance from here when measured in miles, but really it’s farther than that.  I subscribe to Barron’s for no other reason than I once subscribed and I now subscribe annually when I notice they’ve billed my credit card again. I should probably cancel my subscription, but I can’t now. I can’t because the fine New Yorkers at Barron’s like Lake Geneva.  They like like us.

Last week, the Barron’s Top 20 Second-Home Resorts was published. Never mind that the title is clunky and actually  makes very little sense, we’ll just accept the accolades and bask in our nationwide importance. In this report, the super-intelligent, savvy folks at Barron’s compiled 20 top vacation home markets, and they ranked them based on something that’s not entirely clear. Some proprietary combination of something with another something, divided by a few, averaged and then stacked in order.

Number 1 on the list, Austin, Texas. Austin sold 568 homes priced over $1MM, which is incredible and should be congratulated. But Austin is also being overrun by Californians, so we know that Austin won’t be weird for long, it’ll just be strange. Next on the list, Lake Geneva, Wisconsin. We’re runner up really, silver medalists on a national stage.  Here we were, just minding our own business, when New York decided that this little town in fly-over country is worthy of their list.

The snippet on Lake Geneva explained that our market is hot, up 10% over the past year. They told the country what we already know, that our market is exclusive. That’s it’s rare and it’s hot and it’s only for the discerning.  Then they talked about other, lesser markets, like Park City and Vail and Hamptons and Lake Tahoe. But these are all the unimportant places in the country. Perhaps they could all try harder next year to dethrone us from second place.

I wish they would have interviewed me for the article, but they didn’t. They might have called, but if BARRON’S shows up on my caller ID I’m going to assume it’s related to the subscription that I’ve forgotten to cancel for 10 years, and I wouldn’t have answered it anyway. They did mention the $6MM Stone Manor unit, which is my listing, so in a round about way I was mentioned.

The author accurately noted that our sales volume was up 30% from 2014, and that there’s roughly 2 dozen lakefronts for sale is correct (the actual number is just 19 today). But in that there is a common mistake made. Stating that our market appreciated 10% over the past year is simply incorrect. It’s incorrect because in low volume markets there’s nothing accurate about averaging any given year’s worth of sales and assuming that the resulting tally is somehow an indicator of appreciation, or depreciation. That’s because low volume markets offer too many variables to be constrained by the simple math of averages.

Last year, Geneva printed 11 sales over $2.4MM, including five sales over $3.79MM. In 2014, we closed just 3 sales over $2.4MM, and 2 over $3.79MM. That 10% price appreciation you’ve heard about? It didn’t actually happen, we just sold more higher priced homes relative to the year prior. Sure, the market was up, and I’ve guessed it was up around 5%. Why is the number a guess and not an accurate reflection of the data? Because the data is too easily skewed, and my guess is based on the nuance that makes this market what it is. What is it? The #2 resort market in these United States.

Michigan failed to make the list, but if Barron’s would just agree to do the Top 10,000 Second Home Resorts, I’m confident Michigan will make the cut.

For Sale Lake Geneva

For Sale Lake Geneva

When you sell a car, you can sell it one of two ways. You can either sell it because you’ve already bought another car, one that you now love very much. When you have a new car, the old car is no longer important. Who could want two cars unless one is a truck and another is a go-fast sports car? Or perhaps if one is a bumbling SUV and the other a sedan, that might be okay. But for this purpose we have one car that’s older and another one that’s newer, and they’re the same sort of car. No one needs two Dodge Intrepids. No one.

And so one is sold. It’s put out at the road with a sign in the window, or it’s put online, with some pictures and a short description:  I bought a new Intrepid. This is the old Intrepid. No further explanation would be needed. Everyone would understand. And so, because you have tow Intrepids and one is new, you sell the old one. $4200. You let it sit at the road or online for a few weeks. Someone who doesn’t even own one Intrepid offers you $3500. It’s less than you want, but you sell it because you have two and one is old.  This is one of the ways to sell a car.

The other way is to sell a car that you don’t really want to sell. It seems odd, but this sort of sale happens all the time. The car is worth $4500, but you list it for $5900 thinking that if someone is silly enough to buy it, you’ll sell it. And so that car sits and sits but your price stays firm. $5900 OBO. The OBO is only out of habit, because only serial killers write FIRM next on a car window sign. No one bites. No one looks. Your car sits at the road and it rots online, but it doesn’t matter anyway, because you like that car and you’ve decided that it might be nice to have two Intrepids, in case one is in the shop and you have to go out to dinner.

People sell houses in the same manner. They set imagined targets based on once believed values, or based on nothing at all. They wait for someone to call, to drive by, to look in the windows and like what they see.  These are the sellers that we’ve become accustomed to, but these are not the sellers that we wish to find. We want to find the seller who has two of the same thing, the seller who genuinely wishes to no longer own one of them. As the market improves and inventory dwindles, this is our charge. We must find the seller who has what we want, yes, but we must find the seller who has decided to sell because she has to, not just because she sort of wants to.

 

Have a wonderful Easter Weekend.

Deadlines

Deadlines

I think about the days when I won’t write on this blog. I think about how admitting that is to somehow run afoul of the unwritten rules of a real estate professional. I cringe at the word professional. Cringing at the word is also running afoul of those unwritten rules, though I’ll bet they are written somewhere. New agent materials, written. Trade magazines, written. Written by people who tell you what to do and how to be successful. Wear a crisp shirt. Don’t be yourself. Don’t talk about safe neighborhoods and whatever you do, don’t say anything that might be construed as being somehow offensive.  Don’t tell people that you fished Delavan Lake yesterday and you were, for the first time in more than a week, happy to have a cold.  Um, Dad, what’s that horrible smell?  I don’t know son, I have a cold.  I think it’s the lake. See, don’t say anything offensive, and don’t let your hair be messy and don’t ever talk about how you look forward to the day when you don’t sell real estate.

I think about those days in the future, and I think I’ll try to write stories or articles or blog posts or something, and with the meager scratch I’ll earn I’ll just live on that. I’ve written for some magazines already, and it doesn’t seem that hard. Just sit here, think about something not related to real estate, and write it. Then, send the written thing in to the magazine and have them brutally reject your written thing, and you.  I sent a bit into Gray’s Sporting Journal once. I received the courtesy of a rejection email, and it stung. But I’m a glutton for things that sting, (see, Real Estate Profession), and so I emailed back. I asked what about the piece was wrong. Was it the topic or the style or the fact that I always put periods inside the quotation marks?  I was expecting a blistering critique, a sharp dagger to slice through my dreams. I braced myself for the reply.

The writing is not up to the Gray’s Sporting Journal standard. 

That’s all he said. He didn’t thank me for my thoughtful question. He didn’t even soften the edges.  He didn’t say one thing was wrong, he said it was all wrong. And so I’m happy to write for the Drake Magazine (pick one up at your favorite bookstore), where they let me write about fishing with my wife (I hate it), and fishing with friends (hate that, too), and they let me make fun of Iowa. See, when it comes to real estate, Michigan is the one who deserves my ire.  I never wanted to hate Michigan, but any state that produces a commercial aimed at romanticizing Escanaba is a state that has earned my spite. In trout fishing, Iowa is the embarrassing one. Wisconsin has glorious trout streams. We have so many that you don’t dare try to count them without your favorite quant nearby to assist. But Iowa, they have streams stocked with silly trout that don’t spook when you cast your line over their heads. They have hatchery fish that are more likely to eat a Dog Food Emerger than a Pale Morning Dun. See, this is why I have to write for a fly fishing magazine, because you don’t even know what I’m talking about.

In January, the publisher of that magazine emailed me with an assignment. An assignment. I’ve never had one since high school English, and those were assignments I could cheat on (the internet wasn’t available yet, but Cliff Notes were). This assignment was different, and I’d be getting paid for it, and so I had to focus.  I was to write about the early season opener in Wisconsin, which again, is meaningless to you if you’re not interested in fly fishing. But the early season opener is a big deal, and this year it was earlier than in every year that has come prior. This winter, Wisconsin anglers could fish for trout, so long as they released them. I gladly accepted the assignment, which was due by March 1st. I had more than a month to write this piece, and it only needed to be 800 words or so. Cinch. My career was blossoming.

And then the month of February passed, and my assignment went as most of my prior assignments. Unfulfilled. I couldn’t write. I sat at this desk, stared at this screen, typed words on this tiny keyboard, but a story never materialized. The month was a failure because the deadline only reinforced my writer’s cramp. I couldn’t think of anything, and when I did think of something, I wrote it and quickly realized it was the wrong thing. I stared at my office fireplace, hoping the flames would give me inspiration. They didn’t. I watched a fly fishing video or two on that office TV, hoping something would kindle in me an angle. It didn’t. I fished once that month, hoping that the snowy solitude would show me the way.  The fish ate my fly, and snow felt right under my boots, but I had no angle. The deadline was looming.

And I had nothing. But when the deadline was just a day or two away, an idea. I hurriedly plunked it down, read it once, fixed a few words and eliminated a few commas (I do love the comma), and sent it in. I waited for the reaction of the editor. Would he know that I had written this in haste, because the deadline was so near? Or would he reject it because it was, in the words of Gray’s, not up to the standard? When his email arrived in my inbox, it took me a few minutes to open it. I didn’t know if I could stand the rejection, the humiliation. I didn’t want to fail at my first assignment in the field.   If I flunk my first test, how would I someday retire early to while away my days on a Geneva plying sailboat or in those cold clear Wisconsin streams?

He said the angle was different, the tone not what he expected, the outcome unpredictable. But then he said he liked it, and looked forward to running it in the Spring issue. And with that, a deadline made. A dream intact. But the deadline almost paralyzed me, and I nearly missed the prize. You might not realize it, but you have a deadline, too, and it’s rapidly approaching. It’s Memorial Day Weekend 2016, the weekend that should be your launching point for your first Lake Geneva based summer. You see the gray of today, you see the possible snow of tomorrow, you see the calendar and you think you have time. But you don’t. You’re as me, pressing your luck, not willing to do the work required to obtain the reward.  You have 55 days to get this right, now don’t blow it.

 

South Shore Club at Lake Geneva

South Shore Club at Lake Geneva

The South Shore Club at Lake Geneva is old now. It’s been here for a long time, or for a lifetime, assuming the life is young and the long time isn’t viewed in any historical context. It’s not new, but it’s not old like the Chicago Club, or the Harvard Club, or the Lake Geneva Club.  But there’s nothing misunderstood about it now, nothing curious, nothing that needs so much explaining. The market was created, the market stumbled, the market found its footing and now the market is doing what’s best for the Club. It’s resting.

Last year, the last two pieces of aged inventory sold. That was my listing on Forest Hill Court, and the vacant lot immediately to the West of it. Those two properties, one build and one vacant, had been for sale for years. Literally, years and years. Then last fall they sold. Both at discounts, both at prices that represented significant losses for the sellers. But they both finally sold and with those sales, the South Shore Club removed the last piece of stubborn resistance.

Over the winter, nothing has happened in the South Shore Club, and that’s exactly what needed to happen. Then, a couple of weeks ago, an old bit of inventory made new again. A home that was built on spec near the tennis court on Forest Hill came back to market. That home had sold for $1.6s but was then improved, so the $1.9MM ask wasn’t out of line with market expectations. That home sold quickly and somewhat easily. Today, if you were only watching casually over the winter, you’d be forgiven if you didn’t know about that sale (it hasn’t closed yet).

The market is quiet now, but it’s only quiet if you’re not on the inside. On the inside, there is at least one home privately offered for sale, though it isn’t listed. Inside, there aren’t any lots on the open market but there are two that might be sold if the price is right.  Outside, it looks as though the SSC has finally found its balance, and so long as the market there continues to release bits of inventory slowly, one at a time, the market will continue to improve. That’s what it looks like on the inside, too.

If we rewind to the spring of 2012, the South Shore Club at Lake Geneva was a total market disaster. It hadn’t printed a sale in forever, and vacant lots hung heavy on the MLS at lofty prices. When I took over the marketing of the club that year, the sale for $3.575MM on Lakeside changed everything. That sale showed the buying public that there was liquidity in the SSC, and that if you watched a property for too long it was likely to sell to someone more motivated than you. That sale begat another, and before 2012 had turned to 2013 we had a handful of sales, both lots and homes, and the market was on its way to correcting itself. But the full correction hasn’t been apparent until now.

That’s why that little off-market sale for $1.9MM matters so much. It means a buyer who just joined the club found immediate and easy liquidity to leave the club. It means the market is functioning as it should, and it means that sellers of SSC homes are no longer signing up for a lifetime of open houses and fruitless showings. It means the market is strong and the recover is complete.  If you’re a seller, you have an opportunity now. If you’re a buyer, work with me and I’ll get you into the South Shore Club even though there appears to be nothing available.

Spring

Spring

The trees in my front yard are budding. The trees in my back yard are budding. The trees at my office are budding. I’d be willing to bet most of my things and some of yours that the trees in your yard are budding, too.  The streams run high today, high with runoff from the thundery rain that fell on Sunday and again last night. The worms that will dry and die on my driveway today are the same worms that will dry and die on your driveway. Is it better to be those worms that must wait for the drying death or better to be the worms that washed into the trout streams where they will be eaten by the hungry trout that spent all winter wondering where the worms went? I’d prefer the stream worms, because at least they have an option. That’s more than we have.

The silence of winter has been replaced with a most boisterous cacophony of birds. Song birds, little birds, big birds. In fact, birds so big that they swarm overheard in such great clouds, headed from the south and to the north, stopping here to breed, or to rest, or to eat our worms and rile up our dogs. The Sandhill Cranes are the superior Crane, making the Blue Heron look like a silly thing, like a small thing, like an unimportant thing. The Sandhill announces its arrival with such a great squawk that even the song birds and the Robins seek shelter.

The ice of winter is generally quiet. The expansion booms and echoes are loud, but the rest of it is quiet. That quiet ice is all gone now, replaced with wind whipped waves that crash into shore and loudly announce their return. They’re here now, the waves, and the water is anything but quiet. On Sunday, it was quiet, still, flat and smooth. The rare birds flew high over head and the song birds hid in the bushes that we’ll only know to be lilacs once they bloom, which is around the time the smallmouth bite heats up and the morels push free from the soil. It’s not quiet anymore.

But in the quiet of winter there are things we can do. I skied this winter for the first time since childhood, and I skied so much that you’d think I enjoyed it more than I did. I made fires this winter, so many that it would be foolish to attempt a count. There were morning fires and evening fires, and yes, afternoon fires, too. There were fires upon fires, and when Able Dave comes to clean my chimney he’ll stand back and wonder the age of my house. Who could burn so many fires in such a short period of time, he’ll wonder.

In the winter, the waiting is accepted. There’s nothing to do but burn those fires, ski those slopes, pack that snow, and wait. We wait in the quiet in the winter. But it’s spring now, and we still must wait. Now we wait in the noise, we wait in the wind and the thunder and under the lightening and around those birds. They’re chirping again, even though it’s colder today and it’s windier today and the ice is still gone and those overhead birds have been grounded. The worms are drying and others are being eaten. It’s getting louder, and soon it’ll be summer. The noise is the only sign we need.