Blog : Lakefront

New Geneva Lakefront Listing

New Geneva Lakefront Listing

The thing about entry level lakefront is that it’s entry level lakefront. It’s not fancy. If it were fancy, it wouldn’t be entry level.  Entry level exists in increasingly fewer locations on Geneva Lake, due largely to the fact that often times buyers of entry level lakefronts transform those once modest, affordable homes, into something entirely different.  If you’re a buyer for an entry level lakefront, this generally means you’re on the hunt for something priced below $1.5MM. In that segment, there are things you can expect but mostly things you shouldn’t expect. Like garages and level frontage. Entry level buyers rarely have a chance to buy those.

W3298 Park Drive in Linn Township isn’t going to win any design competitions. It’s a nice house, with nice enough things, but fancy it is not. There’s a concrete driveway, fresh landscaping, and a beautiful lakeside paver patio. There’s a terrific H-slip pier, traditional and sturdy. There’s some new siding and a newer-ish kitchen and three bedrooms and two baths. There’s plenty to like. But the rare bits are not those bedrooms or the bathrooms or the stack washer/dryer in the hallway closet. The rare bit, if we’re looking for entry level lakefront, is the 60 feet of dead level frontage and the existence of a two car garage. These are, in the context of entry level lakefront homes, among the most rare amenities.

The house should sell rather quickly in this current market. The renovation of this house, should a buyer choose to improve upon what it is today, would be fairly painless. It’s a simple house without a lot of moving parts. The layout is normal, which, if you’ve looked at entry level lakefront homes for some amount of time, you’ll recognize as being unique for its plainness. There are no spiral staircases here. There are no rooms that you’re not sure what to do with. There’s nothing here that doesn’t make sense. It’s just a house with a big garage and a completely level lot, with 60 feet touching Geneva Lake. The views, as an aside, are among the best on this lake. Facing towards the City of Lake Geneva, the lake here is wide and round, lovely.

If you’d like to tour this home, just let me know. But if you do want to see it, you should probably do so sooner rather than later.

Happy New Year

Happy New Year

I hate Luke Bryan. First of all, he has two first names.  A better name would have been Luke Bryant. Like Kris Bryant, without the ring and with the T.  I hate him because he sings ridiculous songs, songs that I cannot name and songs that I cannot hum. Bro-Country songs. I don’t know any of his songs. He throws his voice when he sings, like he’s trying to be someone else, like he’s trying to sing anonymously.  He’s a country Elvis, which is not to take any shots at the real Elvis who also sang a bit of country. I hate him because of his name and because of his voice but mostly because I don’t like the way his album cover looks whenever when of his songs cycles into my Pandora. I can’t Thumbs Down fast enough. So there, I hate Luke Bryan for no real reason, but for all of the other ones. Ceasing pettiness was not one of my 2016 resolutions.

But Luke Bryan has a song on the radio where he tells us that 60 seconds felt more like 30, and that is something I can agree with. 2016 is over and it flew by.  This year, the year that was so hated by the media, so hated by Memes, so difficult for so many reasons, was a pretty good year to be Dave Curry in Lake Geneva. It wasn’t without difficulty and stress, and there’s a headache that I now get that doesn’t let go for a few days at a time, but on balance the year was a terrific year. For all of the celebrity deaths in 2016, every member of my immediate or extended family made it from the first day to this, nearly the last day.  Perhaps this was because the year passed so quickly, in record time, and because of that no one really found the time to die.

On the business side of 2016, it could not have been better.  A good year in real estate is wonderful, but it’s so fleeting it’s hard not to find some discouragement in the face of all the delight.  I started selling real estate in 1996 when I was just a kid.  While my friends went off to college, I just drove a half mile from home to a real estate office and sat there wondering what I should do. I was intimidated by the sound of a ringing phone.  Once I decided that on fall Sundays there would be women shopping at the store next to my office, and the men must be sitting in their cars impatiently waiting for their wives to buy something with Lake Geneva written on it or carved into it. I thought the men would be bored and might want to watch the Bear’s game. This was back when people wanted to watch the Bears play. So I found a half sheet of plywood and scratched “BEARS GAME ON INSIDE” onto it and faced it towards the road. I turned on the tube television and adjusted the rabbit ears to get the least snowy signal I could. No one ever came inside, and that was a terrible, awful idea.

From those days in 1996 until the end of 2009, I sold around $50MM in real estate. All the while I had a family and houses and mortgages and insurance payments and bills for ads in local newspapers that never worked.  That tally matters, because those were the years where I learned what to do and how to act. I learned what to say. I learned how to fail. I learned the market and the roads and the associations and the way the water looks in the morning as it laps against the rocky point where Fontana meets Williams Bay. Those were the years that mattered more than these years. I’m humbled to write it, and uncertain as to why it happened and sheepishly proud that it did:  My 2016 sales volume was in excess of $62MM. Over the last 12 months I sold more real estate than I did in my first 14 years.

I became so accustomed to working from behind, to thriving as underdog, to wishing for some success that I had no business expecting, that now I feel a bit awkward here. I hear the praise from people I know and from others I don’t, and I don’t know exactly what to make of it. $62MM, after all, is a Walworth County all-time record, and a number that leaves my nearest single agent competitor with less than half of that volume.  I was thrilled to represent either the buyer or seller in 10 of the 26 lakefront closings during 2016, and sold 5 of the 6 lakefronts that closed over $3.9MM.  Per MLS (1/1/16-12/30/16 Walworth County sales), my personal volume was more than the 37 agent @Properties office in Lake Geneva, nearly double the production of the entire Rauland office, roughly quadruple the production of the entire D’Aprile Fontana office, and more than any individual office in Walworth County excepting one. I kind of hate writing all that, but I spent fourteen years being told that the small office can’t be as effective as the large office, so I can’t really waste this opportunity.

Does this mean I’m somehow at the top of this game? Does this mean I have no where to go but down, to slowly fade away as someone who was once pretty good at something but no longer subscribed to the process that brought him there? It seems as though this could be the case, that I might indeed just stall here at this lofty height and realize I never learned to land. But the reality of it is I know this success has very little to do with me. I know I’ve been blessed. And I know that without clients and customers trusting me for their Lake Geneva decisions I would mean nothing to the Lake Geneva market.

So today I thank you for your loyalty. I thank you for reading this drivel. I thank you for recognizing that many days and weeks I have nothing really to write about, but I try to do it anyway. I thank you for trusting in a kid from Williams Bay, who never aspired to do very much but always wanted to matter. I thank you for helping my business grow. Where it goes from here I can’t say, but I know it’s a struggle to stay at the top of anything, no matter the profession and no matter the year. I’ll keep trying, I’ll keep working, and I’ll be here if you need anything. If I’m your agent already, a most sincere thank you. If I’m not your agent yet, this is me begging.

Here’s to us, to Lake Geneva, and to a new year with more time spent at the lake.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

This time of year the Lake Geneva real estate market will do one of two things. It will either push slowly and methodically to the end of the year, or it will remain as active as it has been for much of the past several months. Under the first scenario, it’s just a tidying up of the closings on properties that are already under contract, inching inevitably closer towards December 31st. The market will calm, fresh deals will be fewer and far between, and we’ll focus our attention on closing out what will prove to be the best year ever for the upper bracket lakefront market. The alternative course is that we add some new inventory over the next few weeks and that inventory is met with buyer interest. If that occurs, we’ll also likely see a push on some of the aged inventory that has been clogging the market for most of this year. New inventory that sells quickly helps aged inventory simply because it shows buyers that time is, likely, of the essence.

It’s early fall here, but it’s late fall for the real estate market. We have plenty of time left of active selling season, as I’d just as easily sell a lakefront in October as in June. The serious buyers will remain engaged throughout the change of seasons, those who understand that this search should not be taken lightly nor should it be considered over just because the leaves have begun to change.  But the summer buyers who operate on whim and fancy, those buyers will slowly drop off as the temperatures cool and the leaves dull and fall. November, now that’s a month for the serious buyer. Things are brown, and the things that aren’t brown are gray. Daylight is limited, sunshine, too. The buyers that remain through October and last into November are the real buyers, and I think there are more of them in the market today than I’ve seen in a long time.

The issue today is inventory, as we only have 22 true lakefront homes available as of this morning.  We haven’t seen much by way of new product this fall, and the two of the three new lakefronts that have hit the market recently sold immediately (Lakeview, $1.3s, Sidney Smith, $3.8s). I continue to expect new lakefront inventory to come to market, but I continue to be disappointed with each passing day. In February, it’s no big deal when a week passes without fresh inventory, because the next week will be better and the week after might be March. But in October, the next week might also be quiet and the week after might be November.  Lakefront properties have been listed between Thanksgiving and Christmas, but that’s a rare seller who decides to present to the market during that traditionally slow market. Still, if a seller is paying attention to the limited inventory she would do well to list into that environment, no matter what the calendar says.

Today there are several lakefronts pending sale. There’s the entry level on Lakeview that I mentioned earlier, and there’s the Marianne Terrace listing in the low $2s. That’s right next door to my listing that’s offered at a similar price. Shamefully, I haven’t sold my listing yet. The new listing on Sidney Smith of a home under construction sold quickly, and that sale is a very important data point for buyers looking to build new. That property sold for $1.925MM in 2015, and the seller began construction on a new home just a couple of months ago. That home was new, but it struck me as being rather basic as presented to the market, yet it sold and it sold quickly.  For buyers considering new construction projects, this is a reminder that the market is quite liquid for newer construction on reasonably nice lots (100 or so feet of frontage) priced below $4.5MM. This is a segment of the market that wasn’t particularly tested until this year, and it’s now obvious that buyers will gravitate towards new construction in this price range.  Lastly, my lakefront for $7.95MM in Fontana is pending sale.

So which scenario do think will play out? Will there be new inventory that will be excitedly gobbled up by the market? Or will the market slow as a result of stale inventory? I think it’s likely the latter, but I also know that as soon as you count this market out and expect it to sleep for a few months, it has a tendency to surprise. Still, expect a normalized market as we head into fall. Buyers will revisit aged inventory one last time, and they’ll be ready to pounce if any interesting new inventory presents itself as we move towards winter.

Market Timing

Market Timing

Earlier this year, I wrote an email to an owner of vacant lot. I told him should be be interested in selling, there was a likely premium awaiting him. He hadn’t bought the property too long ago, but the market had been looking for what he owned, and it was obvious to me at that time that some pent up demand had to exist. He emailed me back and said he wasn’t interested. This was earlier this year. Recently, he emailed me asking for a price for his property. I told him a number that was indeed a premium, but not as significant of a premium as I had mentioned earlier this year. He was angered by my number, and suggested that I must have forgotten what I told him only a few short months prior. In fact, I hadn’t forgotten that lofty number at all, but in the time since that quote the market had added inventory in this specific segment, and that inventory had failed to sell. The market momentum that I sensed earlier this year had been squashed under the weight of competing inventory. The time to sell was last spring, the momentum was there, the market ripe, the window missed. This is not my fault.

Sellers have a hard time with this discovery. When it comes to real estate, you can either sell when the market wants you to sell, or sell when you want to sell. There’s no other choice. If you sell when the market wants you to sell, you behave like I do- you lock a gain when you see one, and you move on to the next project. When you sell when you want to sell, you assume the market will respond kindly, because after all, you’re a seller and your house has that sweet gold faucet in the master bathroom. But the market doesn’t care about you, it doesn’t care about your faucet, and if you decide to sell when the market isn’t primed for your specific offering, you’ll flutter in the wind as you await the whim of the market to turn your way. This concept isn’t that hard: Sell when the market is good, hold when it’s bad, but don’t sell into a bad market and expect to overcome it just because your house is special. Yes, I know that in that line of ranch homes your home has an outdoor kitchen that consists of some stacked concrete blocks with a grill precariously perched in the middle.

If you’re a long term holder of real estate, then you needn’t worry about the right time or the wrong time, you just live and you enjoy the seasons and you replace the roof when the time comes. This is how most of us tend to view real estate. We view it as though we’re there forever, or for long enough that market peaks and valleys matter little to us because after a long time of ownership we’ll have enjoyed some appreciation no matter the immediate mood of the market. But this self considering view is incorrect, because most of us move every 5-7 years and if we’re timing those moves at the peak of a cycle then we’re selling high and buying high, and if we miss the peak then we’re buying low and selling low, the net gains are the same.  So if we’re going to buy and sell, shouldn’t we do so in an opportunistic manner?

The time is now to be an opportunistic seller if you’re an owner of a lakefront home with a market value in excess of $3MM. Never before has there been so much liquidity in the upper bracket of this market, and I do mean never. Sellers of homes in $3-4MM range have always enjoyed some level of active market, so their inclusion in this segment isn’t unexpected. What it unexpected is the demand over $4MM, and that demand continues with pace all the way through $8MM. Without exaggeration, several of the homes I’ve sold this year are homes that I could have sold twice. The market needn’t  have one hundred buyers in this segment to thrive, it just needs a handful and that’s exactly what it has right now.

And that brings us back to the timing of it all. Yes, conventional wisdom says to list in the spring. But conventional wisdom is wrong in this case. If you’re a lakefront owner with a property in this discussed segment, now is the time to sell. You don’t need to sell now, obviously, instead you could wait until next year when you’re more ready. But next year has its own set of unknowns and the only thing known is what the market is doing today, and today it wants to buy your expensive lakefront home. This year, three lakefront properties have closed over $3.9MM. I’ve been involved in all three of those sales. Two more sales over $5MM are pending sale right now, and those are both my listings as well. It shouldn’t need to be repeated but if you’re a lakefront seller looking to capitalize on this market, I’m your guy.

 

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.

North Lakeshore Sells

North Lakeshore Sells

Sometimes, there’s not much to write.

There’s a seller and a buyer and they get along and they’re both honorable and they complete a transaction. Sometimes, the house is perfect, the price is accurate, the deal pure. That’s what happened with W4449 North Lakeshore Drive in Linn Township this summer. I listed this home in July, and it closed yesterday for $9,950,000 (the fully furnished number, transfer will be less). The print is wonderful for the lake, wonderful for those of us who care about proving liquidity at the high range. If you offer perfection and you present it to the market in a  way that proves the pedigree,  good things will happen. In this case, I was honored to represent the seller who trusted me with this fantastic listing.  I’m beyond grateful.

This sale puts me over $37,000,000 closed on the year. That’s a humbling total that’s nearly double my next closest “competitor”. If you’re a lakefront buyer or seller with a Geneva aim,  I’m here to help.

 

Loramoor Sells

Loramoor Sells

It seems to me that what this lakefront market really wants is newer inventory in the $3-5MM range. There are buyers in that range seeking newer homes on reasonably nice lots, and this is what they haven’t been able to find. My sale on Lackey Lane  ($4.375MM) fit that mold. The sale last year on the hill in Fontana for $5.1MM, too. Those sorts of homes are what the market wishes for, and yet that sort of home is what we haven’t been able to offer. Inventory concerns are real, and on Geneva right now the ideal inventory is what I’m describing today.

The curious part of this hole in the inventory is that the inventory has existed, but it hasn’t been built. It’s raw land, or it’s a tear down, but it does exist and it has existed for much of the past two years. There were two sales on Sidney Smith, then a sale on Lackey (of a tear down). Then, the vacant lot in Loramoor that I sold less than two years ago came back to market earlier this year. The key to building a new house and being all-in for less than $4.5MM is in buying the dirt for around $2MM. If the dirt is more, your budget is blown before you put a shovel in the ground. If the dirt is considerably less, you don’t have the sort of property that can support that elevated target price, no matter how shiny your Wolf oven is.

This is why when a buyer asks for an entry level tear down, I question the math of it all. Yes, it’s true that you can buy an entry level tear down somewhere around $1.1MM right now. But what have you bought? Likely the answer is around 50′ of frontage. That’s nice frontage, and if you wanted to buy a tear down for $1.1MM and build a new house for $700k, that might be a good idea. But what if you’re looking to buy $1.1MM dirt and then build a $1.4MM new house (5000 square feet x $300ish/ft)? Then you’ll be $2.5MM into a 50′ lakefront lot and again, I’m not concerned about how terrific your kitchen island is because that price doesn’t make much sense. The investment was a bad idea before it started.

That’s why the market has a sweet spot, that of a $2MM type lakefront lot possessing around 100′ of frontage, and on top of that it’s reasonable to build a $2MM or so new home. The market, with the sale on Lackey and the sale on the cliff in Fontana, has proven it can absorb new construction of a higher level in the $4-5MM range. With this known, if you’re a buying in the $4 range why wouldn’t you just build a new house? The answer is confounding, usually related to a distaste for the building process, or perhaps a lack of patience to wait the 10-16 months to have a build completed.  The thing buyers forget is that the house they’ll end up with for $4something will be exactly and precisely the home they wanted all along. There’s a wait involved, sure, but the outcome is individualized perfection that the market also appreciates.

Last Friday I closed on the Loramoor lot that I brought to market earlier this year. The seller had great hopes for that property, but life changed and focus shifted. That shift allowed a new buyer, a young family with eyes set on the lakefront, to find their way to the parcel that will hopefully be their lake home for decades or generations to come.  They paid $2.075MM for 110′ of frontage and 1.43 acres, and that’s something that will always make sense on this lake. The trick now will be to keep the all-in budget in that $4MM range, and once that happens the buyer will end up in a home that the market simply couldn’t offer. Want to find that $4MM new construction on Geneva? Then it’s time to get a bit dirty and build it.

Lake Geneva Lakefront Update

Lake Geneva Lakefront Update

August.  It’s August now and it’s too late for you. If you’re at home and your vacation home dreams are there with you, then you’ve already blown it. This August will not be special for you. It might be special for you if you enter into a contract to buy a vacation home during this month, but otherwise it’ll be uneventful and horrible. You went to Lollapalooza over the weekend? Terrific, that also sounds boring. The good news is that while this August is a complete and utter waste, next August can be spectacular. And next July, too. June, sure. May, and its Memorial Day, delightful. And so it goes, a summer still underway but an August already wasted. That’s your upbeat Monday morning message. Enjoy your week!

The market is remarkably active today. The lakefront in particular. A few weeks ago I sold my large lakefront listing on the North Shore near Pebble Point. A buyer paid $3.93MM for 181′ of dead level frontage and four acres of fabulous depth. This lot is likely the best vacant lot to sell on this lake in quite some time. I prefer it over the lot that sold near Alta Vista a few years back for $6MM. That lot is sold, and with it I’m back to where I belong in the MLS rankings for Walworth County- Number One.  Another large lakefront on Basswood is under contract with an asking price just under $4MM. That home had been for sale for quite a while, and finally found a spurt of activity this summer before finalizing a contract last month.  Two hundred feet of frontage with an old house will always find a buyer, assuming the price slowly succumbs to the market’s expectations.

The South Shore Club has had a nice injection of activity, as I listed and then almost immediately went under contract on a large home just to the lakeside and west of the pool. At $2.99MM this was the first home in this sort of location to come to market since I sold a foreclosure two years ago on the east side of the pool. The home sold quickly because it’s a large home, with elevated finishes, and a most beautiful lake view. The other listing in the South Shore Club is farther towards the back, with less of a view, but I expect that home to benefit from my soon-to-print-comp, and that home will sell this year as well. If you’re looking at the SSC and don’t want to swing the $2.7MM+ price to be on the circle, I have my lot on Forest Hill Court available for just $598k, including home plans.

Just last week a home on the Abbey Harbor came to market, and then this last weekend that home went under contract. Do buyers love harbor front? Of course not, but buyers do love new and fancy and if you’re a buyer who loves large boats and new and fancy well then you’ve met your ideal situation. At $2.8MM the seller was rewarded in large part because of the lack of quality lakefront inventory in that price range.  The SSC home is a similar beneficiary. If the lakefront had more inventory in the $2-5MM segment, buyers would absorb much of it with little delay. If you’re a seller sitting on a home in that segment and you’ve thought of selling, now is the time to call me. Actually, email me, since my return phone call habits are terrible at best.

Entry level lakefronts continue to be shown regularly, but are failing to attract contracts. I just reduced my lakefront on Lakeview to $1.419MM, and that’s likely the best entry level property on the market.  With just 27 lakefront homes available, and two more vacation lots (my Loramoor lakefront being the best option there), buyers have few options to choose from. The good news for buyers is that aged inventory is already starting the reduction process. Sellers know that while this market is a 365 day market now, buyer traffic will slow by November, meaning there’s just 90 days of solid market time left for 2016. Smart sellers are evaluating their position in the market and reducing. It’s not a desperate move by any means, it’s just smart business. Watch for the savvy sellers who have experienced significant market time to reduce soon. Of course the smart buyers are the ones working with me to both strangle deals out of this aged inventory and pounce on the new inventory.

 

Above, the boathouse at my W4160 Lakeview listing. Yours for $1.419MM.

 

2015 Geneva Lakefront Market Review

2015 Geneva Lakefront Market Review

The real estate market in 2006 was not yet aware of the trouble that awaited it. I, too, was not aware.  The lakefront market on Geneva was firing on all cylinders, performing well on a high octane mix of low inventory and high enthusiasm. The market was on fire. That year, we sold 19 true lakefront homes on Geneva Lake. That was a nice year, though I admit at the time I was less involved in the lakefront market than I was in the whatever-I-could-sell-market. That’s because I was paying my dues, which gave me the education that I appreciate today. Experience is not gained in times of excess, it’s gained when you’re hungry. 2006, 19 lakefront homes.

In 2015, we sold 33 lakefront homes on Geneva Lake. I say we, because the market did that, though I had a less than starring role in those sales. I wrote lots of offers, fielded many more, but when the dust settled I had only sold four lakefront homes. Only a few select agents can boast that sort of tally for 2015, and I am pleased to be one of them, though I felt better in 2014 when I was the top agent by so many millions that the next closest agent wasn’t close at all. Anyway, the sales.  What a year it was.

It was an unrivaled, record year for sales, sure, but it was also a year where the lakefront market changed. It changed because of new players in the market, players that have told us they’re experts, but haven’t proven it. A rhetorical question this morning: If you take a beat up 1991 Chevy Impala and put it in the shiny showroom of a Porsche dealer, what does the car become?  In real life, we know that Chevy is still a Chevy, but in real estate, a Chevy that is pushed into a Porsche dealer is, inexplicably, advertised as a Porsche.  But it wasn’t only new players who told us of their expertise, it was a year of a new model.

Auctions reared their MUST SELL NOW heads in 2015, and Lake Geneva featured at least three auctions on our hallowed waterfront.  The first was an auction on Geneva Oaks Trail, one of a house worth somewhere under $5MM. The house sold for a number that, once fees were paid, exceeded $5.5MM. On that momentum, two more auctions were scheduled. One auction would be at Stone Manor, the other of a home immediately to the North with a  shared pier. The home sold, the Stone Manor residence did not. Auctions, if you just started paying attention, batted 2 for 3, which, if you batted that over your career, would give you three more votes for the Hall than Ken Griffey Junior received.

But 2 for 3 is deceiving, because sometimes you can dribble the ball off the end of the bat and reach first. Other times, you can squeak one past the third baseman, and I know this because of my handful of career little league hits I count both in my repertoire. The two auction homes sold, sure, but to whom? Where did these elusive lakefront buyers come from? Were they dredged up through the slick ads and drone photography? Were they tempted by the shiny signs that pointed the way?  Of course not. Both buyers were buyers who were already in the market. They were already interested in a lakefront home. They were buyers who likely would have bought no matter the vehicle used to complete the sale. Auctions in 2015 looked exciting, but they were boring, providing more seller risk than is worth the market reward.

One lakefront (pier 511) sold as a For Sale By Owner. This was an interesting decision by this seller, as most sellers of lakefront homes have no interest in fielding phone calls from gawkers and buyers and agents, like, all wishing for some sort of angle.  The property ultimately sold, as it should have because it was pretty interesting in the mid $4s, but it sold via an agent who brought in the buyer.  The seller paid nearly a full commission on this deal, and handled the annoyances of the transaction personally. Did the buyer show up at the property because the buyer found out about the listing in some rare way, through some shiny ad in some large glossy? Don’t be silly. The buyer was another lakefront owner who was playing musical homes, which is, as a point of fact, the favorite game of local Realtors.   The buyer of that home sold his lakefront home to a neighbor.

Of the other 30 homes that sold, most sales made sense, but not all. There was a heavy sale of a house on a cliff in Fontana, north of $5MM. A few other sales here and there were excessive, but most did make sense. A nice price for around 100′ of frontage and a reasonably fair house hovered between $1.95 and $2.65MM all year, and that’s a fine range to win lakefront ownership. 2014 ended with an average price per foot of lakefront nestled at $21,144. 2015 ended at $25,161.  Those here who love to explain how data works would tell you that lakefront prices rose 20%. They’d tell you that it was such a hot year that if you didn’t buy you made a huge mistake! But they’d be wrong on all fronts.

The lakefront market did appreciate in 2015, as it’s likely to do some in 2016, but it didn’t move 20%. It might have moved 5%. Might have. But it didn’t move 20% just because we sold some expensive lakefront homes that skewed our averages higher. Want to know what raw lakefront is worth right now? Somewhere around $22,00 per foot. How can I tell you that, when the average shows a much higher number? Because data only makes sense when you understand the context.

2016 should be more of the same, with moderate price increases but no where near the amount of volume. Prior years had us closer to 20 lakefront homes sold, and I expect we’ll fall somewhere around 22-24 total lakefront sales in 2016. The South Shore Club won’t be there providing loads of liquidity, and the entry level lakefront likely won’t have the heavy inventory that it had last year. We enter the year now with a few lakefronts under contract, including my buyer on the Lackey Lane property listed in the mid $4s, and a buyers on a two small lakefronts in Williams Bay.  There’s a deal on the large tear down in Williams Bay listed in the high $3s (another buyer that would likely have done better to explore the built inventory in the $6-8 range rather than build new).  There will be inventory coming, some of it rare and exciting (better call me if you want to know about them before everyone else does). There will be plenty of sales this year, but sellers should glance again at the market indexes before thinking it’s going to be a repeat of 2015.

 

 

Basswood Sells

I’m really bad at selling homes I don’t like. I show homes I don’t like, and then I think, I don’t like this house. I have to play along as though I think it’s fine, but generally I don’t play along all that well and my personal opinion is obvious. This is also the reason I’m not that good at advertising. I can’t speak to the lowest common denominator by utilizing font sizes and words that are statistically proven to motivate buyers. Words like DATA.

A few weeks ago, I read a real estate description that said something about “this breathtaking house will take your breath away”. It’s uncertain if the house takes your breath, then gives it back before taking it again, but the consuming masses might like that sort of thing. Then last week I read a description that promised the most dazzling house you, or I, have ever seen. In fact, we wouldn’t believe this house if we did see it. The house that generated this superlative narrative? A super crappy farm house on a highway.

My write up would have been, “That highway isn’t really a big deal. It’s not. In fact, I stood out there once and barely a dozen semis drove past, and most were coasting and all were recently washed.” I just can’t fake my way through this real estate game very well, which is a serious flaw in any Realtor’s character and will, ultimately, lead to a complete absence of business and a starting position at the Lake Geneva Starbucks, assuming I can work my way up from coffee bean bag stacker guy.

Last week, another lakefront sale on Geneva. That makes eight lakefronts closed since September 1st, which is rather astounding. That means the summer activity was strong, which we already knew. This sale was on Basswood, that of the large ranchy home with 201′ of frontage. That home originally hit the market at $5.875MM in the summer of 2014, and just sold for $4.835MM. That sale is a nice sale for the market, and it’s a nice sale for the agent who handled both sides of the successful closing (it wasn’t me).

It wasn’t me because that seller wasn’t my client, which is good, because my write up would have struggled to avoid the mention of drywalled arches and so much carpet. The home that sold was on nice dirt. Absolutely nice dirt. But the house was a Baywood Heights ranch on steroids, and so it either found the right buyer who loves the aforementioned features, or it found the right buyer who loves the dirt and figured they could make the drywalled arches go away through some creative trim work.

Two other lakefront sales that I hadn’t previously mentioned include one on Harvard in Glenwood Springs. It’s an old house up on the hill without private frontage, but at a $1.72MM closing price it’s a fine property. The other was an odd home in Geneva Manor that lacked a garage, a yard, and any outward facing style, but it sold because it had ample space and a young family wished to be in that association. That home, as an aside, was one that I had a shot at listing but I blew it because I didn’t love the house enough. I should have gone on and on about all the Oak, and I should have feigned knee weakness at each baluster and stair tread, but I didn’t, and I said it was nice and fine but that it was worth around $1.6MM. The house was listed at $1.75MM by a more Oak-Enthusiastic Realtor, and then it sold for $1.65MM.

My take aways from these sales have little to do with the market. They have to do with me, and how I’m pretty sure now that if I’m going to continue to be successful, I’m going to have to get better at faking it.

Geneva Lakefront Sales

A long time ago, I decided to write a real estate blog. Along the way, there have been some really bad posts. There have been a scant handful of good ones. There have been irrelevant ones, poignant ones, others. There have been times when I wished for nothing than to stop this writing and there have been other times when I wished for more time, to work harder at this, to effort on a different level. The blog was always intended to be somehow different than a typical real estate blog. For instance, I’ve eschewed the use of multiple exclamation points. I’ve also never pretended that posting a picture of a pretty pier was something that an insightful blog would ever do. I’ve made some people happy, and I’ve hurt some tender feelings. Let’s talk about those.

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Every day, all day, stock market pundits talk about stocks. They talk about this company and that company, about this CEO and that CEO. They talk about the things that make a company great, and they talk fearlessly about the things that makes the company bad. They’ll tell you to sell, or to buy, and when enough of them tell the audience to do one of those things in unison, the subject stock may rise. Often, when enough of the talkers tell their audience that a company is heading in the wrong direction, the stock falls. Billions are made and lost on these whims, yet the pundits talk and tell us what they know, hoping that what they know is more than what we already knew. I’d like to be able to do this for real estate.

And I have, to some tempered extent. Increasingly, however, if I say a sale is bad, or a house is bad, or a house is bad and the land is good, I hear the complaints. I hear of angry sellers, or angry buyers, or angry agents and their lemmings. I hear about the tender, easily hurt feelings of people who may have sold a house that I didn’t like. I hear from others who bought a house that the market didn’t like. I’m growing weary of the constant struggle to make everyone happy, and so I think I might stop commenting on the state of the market, on the state of a sale, on the state of this business.

Just kidding.

There was a sale last week on the lake, and I liked it. It wasn’t my listing, nor was it my buyer. I’m shamed by my absence from this sale, and from too many others this year, but not every buyer makes the proper representation decision and I must respect their mistake. The sale last week was of a shingle sided house in Cedar Point that first came to market in 2013 for $3.5MM. It may have been for sale before that, but I can’t recall the price or the year. That price was never right, but when the home finally sold last week for $2.185MM, I liked the sale. 103′ for that price in that location? I’m a big fan, and I always will be.

That sale was the 19th MLS lakefront sale of 2015. There have been two other auction sales, both achieving prices greater that my opinion of their actual value. Three of those sales have been in excess of $5MM. The 21 sales represent a huge swell of activity for the lake, and there are at least six more lakefronts pending sale right now. I’m expecting we’ll print those six, as well as three or four more before the end of 2015, making this year a most epic volume year. Last year at this date we had closed 15 lakefront sales, with nothing priced over $4MM.

For value minded buyers, consider this. November and early December offer some world class bargain hunting. Aged inventory generally feels like selling, and cool dreary days of November, the sort where fall slowly loses the fight against winter, those are the days we can make friends with rare value. While the year has been outstanding and lakefront buyers are milling about in record numbers, there is still value to be had if only you’ll look at those things that you’ve already passed over. Let me help you by pointing out the winners.

Fontana Lakefront Sells

I’m not going to say what I want to say. I’m not going to say that a house with a modest 110′ worth of cliff frontage shouldn’t sell for five million dollars. I’m not going to talk about the work required to take a basic parcel and turn it into an estate-type parcel; the landscaping, the tennis court, maybe a pool. I’m not going to talk about fit and finish, about what constitutes high end construction and what does not. I’m not going to do any of those things, because a sale is a sale, and the market tells me what it expects and doesn’t really concern itself with what I expect.

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The house sold last week for $5.1MM (I wasn’t involved in the sale). That blue house, the one high on the hill just north of Gordy’s. It sold. It was first listed in 2014 for $6.25MM. Was the home worth $6.25MM? No. And the market proved it, allowing the house to sit and stir on the market for the majority of that year and into this one. Throughout that time, buyers presumably came and went, opting for other things, or for nothing at all, over this house on the hill. But the house had some style, and it had some polish, and it was new and of a contractor pedigree that means something here, and so the house attracted interest but failed to achieve the only measure of interest that matters: A sale.

What happens next is some intrigue, some subterfuge, and disappointment. The listing expired and was removed from the market, but the market knew the home was still for sale. And so it went, a house off the market, an aged asking price that never fell below $6.25MM. If you were simply computer screen watching, as 90% of agents do, you might have been surprised to see this property print in the MLS this week with a $5.1MM closed price. We do not computer screen watch.

The sale now closed was handled by an agent other than the agent that brought the property to market at that lofty price in 2014. The agent who closed the transaction was not the agent who toiled at the high price. This was not the agent that knew the market would react differently to the property if it were listed in the middle to upper fives, rather than the low sixes. The agent who did the fine job of selling this home last week was not the agent who introduced the property to the market, who broadcast it to the agents, who made known the quality and the importance of the home (even if I didn’t agree with the level of importance). The property sold via another agent, and the market, those uninitiated who follow from afar by watching Instagram screens and Facebook posts, will assume that some heroic event was made possible by the introduction of a new face.

When I took over the South Shore Club marketing in 2012, and promptly began selling both homes and lots with a regularity that the market there had never experienced, was it because of me? Was I so much better than the prior representation that I somehow convinced the public that this South Shore Club was worth their time and money? Was I a star who brought with my power of personality and made this development matter again? Or was I just the guy who came on the scene, with messy hair and pointy shoes, and convinced the sellers that the price structure was wrong, and that if they would oblige my suggestion they would find success? It’s the latter, which is why I didn’t take out full page ads telling you how tremendously effective I was. I was merely the person at the helm when the market heated to such a level that success was the only possible outcome.

The same likely applies to the blue house on the hill in Fontana. Was this some feat? Was this a sale that wouldn’t have happened if not for a change in agent or broker? Of course not. This was a sale, like most sales, that had everything to do with price, and had the price of that $6.25MM home been dropped to $5.3MM (the ultimate list price when the property sold) I would suggest that anyone of a 100 different agents in this town could have played the star role. And all of that goes back to this. On television, red carpets and Burning Man parties sell houses. In Lake Geneva, just hack off your price a bit and make your agent a star.

As a market aside, this sale was high. There were multiple parties interested in it, but it was still high. The premium was paid because Fontana is a desirable locale, and new construction in the $5MM range generally doesn’t exist. Buyers can convince themselves to spend $5 something much easier than they can convince themselves to spend $7+. No matter that $7+ gets you a product like 1014 South Lakeshore, a property so vastly superior to the blue house on the hill in every possible measure. Compression is the high end buyer’s friend here, and if you can swing $5 something, better reach a bit and spend $7 something, because that two bucks you left in the market is now worth $1.6 bucks, and a house is so much more fun.

South Shore Club Sales

I watch the million dollar shows on television. I used to think I liked those shows, because they portrayed Realtors as being cool and hip, and Realtors have, since the advent of the Realtor, been sufficiently anything but cool or hip. I liked the new Realtor, and I liked that the industry found a way to reshape their image. I don’t really feel that way anymore.

I like the fancy cars and pointy shoes as much as the next guy, and I appreciate snarky comments and faux conflicts, but there’s some damage being done to the industry if you look beyond the pocket squares and excessively gelled hair. While we’ve become accustomed to watching these television agents dance through negotiations and coyly bluff each other over drinks at a fancy bar (the deals always come together), the bragging about setting new records and beating the market has convinced much of middle America that this new game isn’t about facilitating market transactions efficiently and competently, but rather it’s about the gimmickry that can, or in the case of the show, always, leads to beating the market.

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My market beating experience this year just played out last week at the South Shore Club. I saw there the last two sellers, those owners of lot 8 (unbuilt), and lot 7 (built). When I took over the South Shore Club marketing in 2012, these two parcels were for sale. When 2014 faded to 2015, both of these parcels were still for sale. Both properties held the lofty expectations of their owners, and if both parcels had been in Beverly Hills I likely would have sold them both to foreign investors and then tap-danced my way to a champagne lunch. But this is Lake Geneva, which is, if you’ve been dawdling, a small resort town in Wisconsin that caters almost exclusively to the Chicago affluent. It is a beautiful area, but it is to Beverly Hills what I am to an olympic decathlete.

These two properties weren’t catastrophically flawed. They were South Shore Club properties, owning all of the luxurious amenities that every other club property owns. They were on a dead end cul-de-sac, on a street that hosts a total of 8 parcels. In the time since these two properties were listed, nearly every other property on the street sold, and every buyer that bought on the street looked at these two parcels and said no thanks.

It wasn’t that these owners weren’t trying to sell. The vacant lot #8 switched representation a handful of times in an attempt to rouse a buyer through a different narrative, a different set of pictures, a different approach. That failed. The lot 7 owner, whom I was pleased to represent, chopped the price consistently. He re-painted. He removed the furniture. He had a pre-inspection performed (some agents love those now). He took the property off the market and then put it back on. He chopped the price some more. New pictures were taken. A new narrative written. After several years of efforting the properties had several serious looks, several seriously interested, and dozens upon dozens of showings, yet both sat unsold.

When both parcels sold last week, they sold for the reason that Lake Geneva properties ultimately sell. They sold because the prices were cut to a level that the market accepted. They didn’t sell because of pointy shoes or gelled hair. They didn’t sell because the Realtors drove shiny cars. They sold because the market had rendered judgement on them, and in order to find a buyer they both had to sell cheap. I sold lot 8 last week to a buyer of mine for $420k. I sold lot 7 for $1.45MM. These prices were discounted, tremendously, even as the remainder of the market appreciated. Importantly, these two parcels represented the last two available pieces of aged inventory in the South Shore Club. From here on out, any sale in the SSC will be something new to market, and that’s exciting for everyone that has played a role in this development over the past 14 years.

Did these parcels fail to sell years ago because the Realtors were somehow bad? Is it because the Realtors couldn’t manipulate the market to suit the individual needs of their clients? Well, no. Of course not. The properties didn’t sell because beating the market isn’t just something that supposes one side is extremely naive and gullible, it’s also very difficult to do, unless of course we were in Beverly Hills right now.

Lake Geneva Antique Boat Show

Lake Geneva Antique Boat Show

Crain’s Chicago Business has a fun little column that appears on Thursdays. It’s called Ten Things To Do This Weekend. It is a nice list. And it’s good for Chicago area events and businesses, because it supposes that everything there is to do on a weekend should happen in the city or the suburbs. The events are wildly varied but somehow all the same. Come visit a three piece cello band while they play you their greatest hits at some outdoor place in some suburb. That strangely sounds the same to me as a painting class at some university under some tutelage of some artist, who painted some piece that no one has heard of. See, the things are very different but somehow both the same.

The list fails most, because anyone with any sort of sense knows that if you live in the city the weekends are for anything but the city. If you live in the suburbs, and you’re not tethered to your child’s soccer or baseball schedule, you also know that the suburbs are lame and that you should leave them whenever possible. This list is, at the very heart of it, what’s wrong with the thinking of most city and suburban dwelling affluents. Tuesdays you have little choice where you’ll be, but Saturdays? Well, Saturdays you could either make the hour drive from Naperville to Millennium park to witness the first ever Basketweaving While Blindfolded competition, or you could point your car north and drive as fast as possible. I choose North.

And why wouldn’t you? This weekend, like all weekends, there are things to do at Lake Geneva. But this weekend, unlike all of the other weekends, there’s a wood boat show. That’s not really fair, to call this a wood boat show. Because it’s not a show, it’s the show, and if you’re anyone who appreciates fine things, you’ll be here. Note I didn’t say you had to appreciate wood boats. That’s the same reason I don’t think you have to love golf to live on a golf course. It’s nice to look at something that’s beautifully maintained, no matter if it’s a sprawling green golf course or a highly polished wooden watercraft. Nice is nice, and if it’s at Lake Geneva it’s usually nice made nicer.

The show takes place Friday, Saturday, and Sunday at the Abbey Harbor in Fontana. The forecast, as you may have noticed, calls for 75 and sunny on both Saturday and Sunday. The real highlight of the show is the boat tour that happens today, Friday. This tour is mostly missed by the casual boat show attendee, as those patrons visit on Saturday and Sunday, oblivious to the fact that they missed the most important event of the weekend. Then again, if you’re reading this right now you’ve likely already missed the Friday portion and you’re completely and utterly out of luck. But still, come Saturday or Sunday and you’ll enjoy the finest wooden boats in the country as they ply the finest lake in the Midwest.