Blog : Lakefront Sale

Hillcroft Lake Geneva Sale

Hillcroft Lake Geneva Sale

It’s fun to see the media make a fuss about a sale on Geneva Lake.   First up, please know that the media itself doesn’t pay such close attention to these lakefront sales. Once a sale is completed, the brokerage involved has a representative reach out to numerous media outlets to generate some buzz. This happens at large firms that need to hang on to their market share.  This is why, on the fresh heels of the Hillcroft sale, you’ve read so much about it and from so many different sources. Local news sources fawn all over Lake Geneva, largely because our market is so much different than that of the rest of this great state.  Lots of places in Wisconsin have large homes. Lots of places have high valuations. But at Lake Geneva, we not only have high valuations we also have high prints. You can own your expensive home anywhere in Wisconsin and that’ll be nice for you. The difference at Lake Geneva is that we can actually sell that house when you’re done with it.  It’s good to be king.

In spite of the media attention and the well known nature of this story, there is still work to be done. There is analysis that must be considered. The Hillcroft property was immensely large for this lake. 415′ of rare, mostly level frontage, situated on a small point. The frontage was spectacular. The location on the lake, just West of downtown and off of Snake Road, pretty much ideal. The overall property is 20 acres. That’s an obscene amount of property on this lake. Don’t forget, for the purposes of our local definition, 200′ of frontage and 3 acres constitutes a reasonable estate.  Hillcroft is off the charts in terms of land mass, and it should be applauded for simply being.  Consider the 2017 average for price per square foot of overall lakefront land mass was $58.09. Applied to Hillcroft, that would place the valuation over $50,000,000. (Compression doesn’t allow for this, of course).

There has been much fawning over the home itself. Over the size of it, the bedrooms, the baths. The dining room and library.  I always loved this home from the lakeside. The way the structure follows the curve of the lakefront is rather divine. But as an agent who showed this home when it was available I can say this: The house, while beautiful on the exterior, was average.   The layout compromised, the finishes mostly dated. Any praise this property receives should be dedicated to the property, to the old Wrigley buildings that still exist, and to the history of it all.

The average price per front foot of lakefront settled at $27,193 for 2017. Typically, larger properties are unable to achieve that average, as compression once again rears its ugly, insistent head. But in the case of the Hillcroft property, the price held up. At 415 feet of frontage, the average would have yielded a print at $11,285,095, which is nearly identical to the actual print of $11,250,000. That’s a surprise of sorts, given the structure was so meh, but when you factor in that overall value of land mass, the lakefront average makes perfect sense.

Is this the highest priced sale in Lake Geneva history? Yes.   Was the sale a surprise? Not at all. It makes perfect sense, and the only issue in our marketplace now is that we won’t likely have another Hillcroft to sell for a while. But that brings us to an important concept regarding this lakefront market. Is Hillcroft a rare property? Obviously. Will it remain as the top dollar sale for a long time? Not likely. Consider the previous high sale was the property that I represented at W4449 North Lakeshore in Linn. I closed that property for $9,950,000 in late 2016. Hillcroft surpassed that sale by only 13%.  The North Lakeshore sale was of a gorgeous house on reasonably nice dirt. The Hillcroft sale was of legacy dirt with a reasonably blah house. What the market has yet to see is the ultra rare combination of a gorgeous, newer house built on top of rare, meaningful dirt. Yes, 200′ lots with beautiful homes on them exist, and they exist plenty. Yes, those prices could easily be in the $7-10MM range. But those prices won’t dethrone Hillcroft. What will dethrone Hillcroft, and likely soon, will be the combination of that perfect house on that perfect dirt.

Don’t blink, it’s coming.

(I wasn’t the listing or sale agent for Hillcroft, which is a terrible and embarrassing shame. If you’re a buyer or seller of such a property, you should be working with me. This sort of top sale without my involvement can never, ever happen again).

Lackey Lane Sells

Lackey Lane Sells

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

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

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

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

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

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

Another Lackey Lane Sale

Another Lackey Lane Sale

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

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

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

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

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

Lackey Lane Sells

Lackey Lane Sells

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

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

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

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

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

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

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

Geneva Lakefront Sale

Geneva Lakefront Sale

We tend to buy real estate based on emotion and sell it based upon fact. This shouldn’t come as a surprise to anyone who has ever bought or sold real estate. We buy it because we love it, because we want it, because it makes sense in some ways, sure, but mostly because we just have to have it. We sell it because we still love it, we still want it, but we know there are better ideas or better options, and so we adopt a more pragmatic approach and we move on past the thing that we so dearly loved. The hang up in real estate is when we’re buying something that we don’t truly love, that we don’t really want. Then every hiccup is perceived to be a bad omen, every slight difficulty a catastrophic event. When we sell, if we don’t truly understand that selling is what’s best, we cling to this real estate like grim death, knowing we have to sell but badly wishing against it.  Then we poison the process with emotion, the side of the process that’s supposed to be more fact based. This is real estate.

On Friday, I sold 976 South Lakeshore Drive in Fontana. I represented one of my favorite clients in that transaction, and the deal came together in the way that we wish all deals might. We listed the house, we showed the house, we received an offer on the house, then another, and then we sold the house for $3,300,000. Just $95k off of our original April ask. That’s a scenario that most sellers dream of, and indeed it is a process of which I’d love to be a consistent participant. For now, we’ll leave aside the part of the deal wherein I represented a fantastic seller as that family pursues the ultimate lakefront arrangement, and we’ll instead focus on the truths of this deal and try our best to learn from them.

I sold this home to this seller in 2013 for $2.95MM. The seller did some improving of the home, but nothing too overwhelming. The property just sold for $3.3MM, representing a 12% increase over the 2013 price. This is Takeaway #1 from this sale: The lakefront market is up around 12% from 2013. Is this a uniform number, benefiting or cursing all lakefront homes? Of course not. Some have risen more, others less, but this is a solid benchmark, proven out not by my own interpretation of the market mood, but by cold hard statistics. Other properties have been bought and resold over recent years, but these properties often have had some form of dramatic renovation between the time they first sold and the time they most recently sold, so those statistics offer simply more proof of a market tendency to overpay for renovated kitchens.

This property, at the time that it hit the market, was the only lakefront home in Fontana listed for sale under $7MM. As a result of that market gap, the seller of this home could have taken a common seller approach of assuming that because he was the only game in town, the market would dramatically overpay for the rights to own his exclusivity. I hear this often from sellers, and when they explain just how rare their property is I tend to daydream about things that don’t make me lose all faith in humanity, like trout streams and the lake on a calm summer morning. The sellers explain, if a buyer wants this particular thing, in this particular location, they’ll have to pay. Unintelligent sellers call this the “price of admission”. It is true that there is a price of admission, but you know I like to compare real estate to cars, so to be a seller offering his rare property for a ridiculous number is akin to me listing my 5 year old BMW for $100,000 because that is indeed the only BMW in Williams Bay listed for sale. If you want that sweet BMW, you’ll have to pay up. Sellers of houses are just as ridiculous, and this seller didn’t succumb to that absurdity. Instead, we discussed the market, targeted a price range, and we listed the home at what the market indicated would be an acceptable price. One month later we had two buyers in line, proving our theory correct.

The lakefront market as a whole is relatively slow right now. There are two other lakefronts closing this week, both to buyers whom I’m pleased to represent, and another in Lake Geneva with a shared pier. Don’t ask how I feel about shared piers. Two weeks ago the older lakefront home on the hill in Cedar Point closed for $1.515MM, representing a reasonable ransom for a house with a tremendous view and approximately three trillion stairs to and from the water.  YTD there have been 9 lakefront sales. 2015 had ten lakefronts closed as of June 13th, with two of those sales being involved in a trade. The market today feels somewhat sluggish, but it’s actually right on track. Last year, from June 14th through December 31st, there were a whopping 20 lakefronts closed, meaning 2016 has some big shoes to fill. The market could very well turn on in a similar fashion to last year, and I have a sneaking suspicion it’s going to do just that. The only difference between last year and this year is that our inventory is tighter, and without enough dry tinder there’s no way to get that fire quite as hot as last year.