Blog : Lakefront Condominiums

Vista Del Lago Sells

Vista Del Lago Sells

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

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

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

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

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

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

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

Vista Del Lago Sells

Vista Del Lago Sells

It isn’t easy being a large condo association. In fact, a seat on a board at such an association is the worse sort of punishment, the sort for which you volunteer. Geneva National knows this pain, and it knows it well. Large associations have different problems than do the small associations, owing mostly to the scale of it all. Lots of land, lots of amenities, lots of structures, and unfortunately, lots of owners. Vista Del Lago, the largest condominium association on the lake, knows these problems all too well.

There’s been a learning curve of sorts at Vista.  New ownership flooded in during the 2000s condo boom, and unlike the average of the previous ownership, these owners were more affluent and as a result, more demanding. Expectations soared, and along with it, the request for improvements. This should be better and so should that. New retaining walls here, new roofs there, new landscaping around the corner.  The property was old enough by then to need some serious attention, and as a new group of owners settled in, the attention was paid.

There were some management concerns, so management changed. There was some maintenance concerns, so maintenance changed. There were reasons to improve Vista, so the improvements were made. But that makes it sound like there wasn’t a struggle, because there was. Whenever a large group needs to make decisions in unison, there is a struggle. But today, the smoke is clearing and Vista, with those improvements made, has once again found favor in the market. It’s a good time to be at Vista Del Lago.

The market hasn’t fully recovered, mind you, but it’s finally gaining some ground. This week I closed on a sale of a four bedroom condo for $520,000.  Currently, there are two other units at Vista pending sale, with just two others active on the market. There was a time not too many years ago when it wasn’t uncommon to have six or more units available at the same time. These recent sales and this lack of inventory is just what the doctor ordered, assuming the doctor was ordering Vista Del Lago to return to form.

Today, there are only eight available lakefront condominiums on Geneva Lake. That’s a low total, to be certain.  The most amazing of them all? Obviously my Bay Colony unit in Williams Bay. First floor unit, boat slip, perfect lake views and a stunning interior. For real, stunning. You’ll be stunned. Actually.  I wouldn’t ever use that word out of context.  For now, let’s celebrate the Vista sale. It means a lot to the market, and I expect the lakefront condo market to continue its long recovery throughout the coming summer. If you’re looking for a ready-made lakefront experience and your budget doesn’t allow for single family, there’s no better way to indulge in the lakefront scene. If you’re wondering who to work with towards this end, email him here.