Blog : Market Update

Geneva Lakefront Market Update

Geneva Lakefront Market Update

I almost bought a car in December. It was late December. The snow was falling and it was cold and it had been Christmas but it wasn’t yet the new year. I drove to the dealership, took a ride in the car that I was thinking of buying, and then sat in the chair across from the salesman for what felt like two hours. It felt that way because it was that way, and I sat and thought and looked around and thought some more. I wasn’t sure what to do.  The deal was in place, the trade on my car negotiated, the new vehicle ready and able and if I just said yes I would have driven it home. My children would have looked it over with great admiration, and my wife would have told me how superficial and horrible I was. Things were so close.

But I couldn’t do it, not then, and not in the days since, because I have commitment problems as it relates to cars. I dislike purchases that depreciate rapidly, which is also why I’m a solid $30  chicken dinner guy even when I kind of want the $62 ribeye. I drove from that car dealer and emailed the salesman the next day to work on a few final tweaks of our possible deal. The car, I was told, had sold.  I spend hours, no days, weeks contemplating most purchases, no matter how seemingly trivial they might be.  Although I am an alpha consumer, I’m reluctant.

This is a fine way to be, assuming you don’t want to secure something that might be fleeting. Just a week ago I wrote a bit on the state of the lakefront market. I was considering the pending sales on the lake and the market reaction to new inventory that had been slowly trickling on. My theory was that a market can be better gauged by the reaction, either swift or slow, to new inventory than it can be by the absorption of the old inventory. Since then, two things have occurred that have cemented my opinion of this market.

I listed that small lakefront with 60′ of level frontage a couple of weeks ago. Within a week, I had it under contract.  Last week, an odd lakefront came to market in the mid $3s, and it didn’t even last a week before a buyer put it under contract. These are the two newest lakefront additions, both unique in their own way, both under contract within mere days of listing. If you’re wondering about the state of our lakefront market,  these sales should help you understand just what you’re up against.

There are motivated buyers aplenty. More now than I think I can ever remember. There are buyers for entry level and buyers for large estates. There are buyers for land and buyers for finish, there are those who want to find value and those who just want to find a shiny marble shower. The market has plenty of matches, we just need some kindling. If you’re a buyer who, like me, finds it difficult to make a decision in any reasonable amount of time, this market is not going to be easy for you. But if you’re a buyer who knows what you want, and you trust your agent (that’s me) to guide you to lasting value, then it’s time to act. Inventory will be coming to market, but you need to get early eyes on it if you’re going to have a shot. Want to know what’s going on before the rest of the market?  Tell me what you’re looking for and you’ll be in the know before some automated MLS feed spits the listing your way.

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.

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.

Lake Geneva Market Update

Lake Geneva Market Update

I was going to write this morning a response to a recent article in the Wall Street Journal. The article, Homeowners Hit The Jackpot, appeared to be, at the headline level, something that might interest me. Then I read the article and deemed it rife with stupidity. How could I respond to something as lame as that article? And so I decided instead to write a market update. Lake Geneva, it’s December. It’s almost time to start talking about the year in the past tense, but if we did that now we’d miss the present. It’s December, and there’s a lot happening. Here’s your Lake Geneva Market Update.

Yesterday, I closed on W4160 Lakeview in Linn Township.  I had that cute little lakefront for sale for what felt like most of my life, but was, in fact, just the last two summers. The house was what you’d expect of an entry level lakefront. 50 feet of frontage, no garage, basic finishes. It was a charming little place, with a boathouse that most estates would like to own. The house was simple, the sales price $1,260,000. The new buyers happy, sure, but not yet certain just how good it will be to own a weekend home on this lake. The seller had owned the house for 11 years and didn’t make any money on it. In that, I failed. But the owner told me yesterday that although the house isn’t the fanciest on the lake, and although the bedrooms are small and the kitchen boasting white appliances, his family looks at that property as the place where the best of their memories were made.  That, after all, is what this whole game is about.

This week I brought to market a lake access home in Shore Haven. It’s a nice house, this Shore Haven place. It has a slight, squinting view of the lake if the leaves are in the right position (on the ground). It also has a two car garage and plenty of parking, attributes which are rare in the lake access world. The house is charming, the finishes nice enough, the layout comfortable with the possibility of attic expansion if someone so desired. But that’s not really the thing that matters with this $749k new listing. What matters is the boat slip. Slips, in the eyes of the wandering market, are all created equal. You either have one or you don’t. If you have one you’re lucky. It you haven’t one you’re sad. You didn’t need one, you said. But above a certain price point off the lake you do need one, because everyone else expects one even if you don’t. That said, this boat slip is fantastic. It’s deep and it’s big and it’s easy to pull in and out of, no matter if a north wind is howling from Williams Bay. Boat slips matter, and this slip that accompanies this house is an absolute gem.

Last week I closed on a Bay Colony condo. I don’t sell a lot of condos anymore, but I sold a ground floor two bedroom in the north building for $415k. That price is significant, as that $415k price is the lowest paid for any unit in either Bay Colony building since at least 2005.  Does the kitchen have a Viking range? Don’t be ridiculous. It might after the remodel, but it doesn’t now, and that’s why I negotiated on behalf of a client and we pushed a $475k asking price to a $415k closing price. Want to buy a condo on the lake? We can go bargain hunting together.

For the remainder of the year we’ll see a few new contracts, but mostly we’ll see the closings of homes that have been placed under contract over recent weeks and months. Lest you think it’s a bad idea to buy a lake house in December, consider the importance and duration of a Lake Geneva summer. If you want to be ready for summer you have to prepare in the winter. It’s December, which means it’s basically winter, and now is the time to start your preparations for the upcoming summer. The summer, not coincidentally, which has the chance to either be the best summer of your life or just another one.

 

Above, the new Shore Haven listing for $749k. 
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.

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.

Abbey Springs Market Update

Abbey Springs Market Update

There’s a truth we need to agree on this morning. Abbey Springs is nice. That’s a truth. Abbey Springs has a golf course, another truth. I have hit many Abbey Springs houses with golf balls that were launched off of a club face under my “control”, super truthful. Also, the Abbey Springs beach on a sunny holiday weekend is less a beach and more a flesh blanket. It’s a flesh blanket. Mind if I lay my head on your stomach, because I can’t find any open spot of sand? Flesh. Blanket.

But this is unfair, because it’s a nice flesh blanket and it’s the only association of its kind that has a beach at all. It’s a miniature Geneva National but instead of being located on Lake Como, it’s located on our Geneva Lake. It’s also just 592 units in size, which makes it enormous but still about one third the size of Geneva National. In this size difference there is a key to the market. Instead of needing to print 60-100 sales per year to keep pace with market demands, Abbey Springs can leisurely print 18-25 sales per year and everything will be fine. Smaller associations are like that, and Abbey Springs has both a holiday beach draped in a flesh blanket and a really solid market. Let’s talk more about the market.

Last year at this time there had been 14 closings in Abbey Springs, with just one of those sales printing over $500k. This year Abbey Springs has closed 28 total sales with five over $500k, including two over $800k.  With that you know this: Abbey Springs is having itself an absolutely terrific year. The condominiums are selling, the houses are selling, the beach has a blanket of flesh and the golf balls are knocking roofs. The grounds are well maintained and the ghosts of large past special assessments all but forgotten. Abbey Springs might be having the best year of any individual association around this lake, and that’s a really good thing.

But the market isn’t without holes. There are issues here, chiefly the market’s relative difficulty in printing sales over $700k. Yes, this year there have been two over $800k, but look back and consider since 2010 there have been just 9 single family sales over $700k in Abbey Springs. That’s a little more than one per year, and that’s not terrific.  There are loads of Abbey Springs homes valued over $700k. Lots and lots of them. Yet the market still has a hard time absorbing that nicer inventory. For an association as strong as Abbey Springs, with the indulgent amenities, I’d expect a stronger market over that price point. For context, Geneva National offers bigger and better homes for the money, but GN has printed 15 sales over $700k since 2010, so GN has finally beat Abbey Springs at something.

I have plenty of buyers who contact me in search of some nice single family home in Abbey Springs priced around $500k. This is hard for me to say, but Abbey Springs around $500k in a single family home situation doesn’t offer much. It’ll give you a reasonably decent house that needs updating. If you’re looking to spend $500k and you want a Viking stove, better check elsewhere. This does create a market for the buyer who wishes to improve a built home, as nice homes with elevated, newer finishes in Abbey Springs generally start at that $700k mark and run upward from there. Looking to create value in Abbey Springs? Buy an older house and fix it up. You know, like they do on TV.

I’ll be working this holiday weekend, so if you find yourself at the lake and in need of some advice, fire away. Unless you want to call me at 11 am Sunday morning and you’re hoping to see seven homes at noon, then don’t call me. Just email me and we’ll see what happens. Have a terrific weekend at the lake.

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.

 

Glenwood Springs Sells

Glenwood Springs Sells

I think it’s great when someone comes up to tour some vacation homes on a Friday and buys one on a  Sunday. But I admit to you that in 20 years of selling real estate that’s only happened like once. And maybe that one time I’m remembering is something I’m imagining, like a dream I dreamt so many times that I now believe it to be true. The sorts of buyers that I work with tend to be far more methodical. They tend to be discerning. They tend to be slow moving, sometimes to the point where their deliberations become the reason they miss out on opportunities. Often, being thoughtful can cause buyers to overlook incredible value because they’ve convinced themselves that to be eternally patient is somehow better than being opportunistic.

Last week, I closed on the sale of an old house on Linden in Glenwood Springs. This house is in pretty rough shape, which might be giving it too much credit. It’s a tough old house, but it’s on a double lot with a lake view and a private pier so what difference does it make if a marble dropped in the living room somehow ends up making a visit to each main floor room before it settles?  Like most sales, this one tells a story, and it’s not a story of finding a buyer by placing an ad in the New York Times, or by pulling a full page ad in Mansion for $18,000. This is a story like most Lake Geneva stories.

In February of 2009, this old house came to market for $949,000. For those who weren’t paying attention to the market then, the winter of 2009 was an interesting time. The stock market melted in the fall of 2008, but it wouldn’t stop melting until spring of 2009, and the housing market from late 2008 through late 2009 wasn’t quiet sure what was happening. There were well known local Realtors here telling us, and I quote, “Lake Geneva is Different”. The supposition was that we wouldn’t crash like other markets because we’re better than other markets. We’re stronger, less dependent on leverage, more stable. I admit to finding myself in that camp on some days during that confusing winter.  In February of 2009, the seller in Glenwood Springs was buying that narrative, and so $949k it was.

The market worsened from late 2008 all the way through 2011, and so this house sat. The price was reduced and reduced some more, and then in the fall of 2011 the home sold for $499k. A far cry from the $949k initial list in 2009. Fall of 2011 was likely our market bottom here, but it wasn’t a uniform bottom. Entry level lakefront wouldn’t bottom until mid 2012, and it wouldn’t be a stretch to say that entry level lakefront still hasn’t recovered from that bottom. The higher reaches of our lakefront market have fared very well since that 2011 bottom, but how has Glenwood Springs done?

The Linden house was sold, but the new owner was mostly buying it because it was there, and at $499k it was cheap. In November 0f 2014, with the markets vastly improved, the old house on Linden came to market for $675k. The owner would make a nice return for the risk they took at the bottom of the market. They would make money, and they would celebrate over drinks. A toast, to the investor!

But last week I sold that home for $465k.  The 2011 risk on owner lost a sizable sum of money. Perhaps $100k when all fees and carrying costs are factored. Now a new buyer, a new opportunity, a $465k price for a double lot with a lakeview and a private pier. Since the 2011 low, two neighboring homes on Linden have sold, both in the $700s, both older homes. I sold one of those homes. The market proved fickle yet again, and the new buyer is the beneficiary of seizing the moment.

But the moment was almost lost, because this buyer had actually looked at the home with serious intent last summer. At that time, the list price was in the mid $500s and we were guessing that a $500k price might get the job done. The buyer decided the timing wasn’t right and we never engaged the seller in a negotiation. Then, in late January, I thought the time might be right, and the buyer bid. The timing wasn’t convenient for the buyer, as a family vacation was already planned and underway, but he found the time and made the bid.  When the dust settled, we had paid $465k- a price well below the 2011 market “bottom” price. The buyer won, and I’m pleased to have represented him.

It would have been easy to watch this property over the years and assume something was wrong with it. It would have been easy to take a pass. Every buyer but one did just that. But the new buyer found the motivation at the right time, and his family now gets to spend summer lakeside, swimming from their private pier, enjoying the Glenwood Springs scene, while the other more methodical buyers remain methodical in their city and suburban homes, wondering when the time will be right.

 

Geneva National 2015 Market Review

Geneva National 2015 Market Review

In 1992, a small one bedroom condominium in Geneva National sold for $92,300. I imagine how happy the new owners were. They’d come up to golf and to swim, to tennis and to walk, to explore the area and when the day was done, return to their tidy little condominium.  It was a slice of heaven, I suppose. In 2005, that small condo sold for the second time, for $129,900. Seems a reasonable ransom for that little bit of Lake Geneva bliss. If you’re worried that you missed out on that deal, don’t worry, the same condo is available today for $69,900.

It’s not easy to offer a property in 2016 for 75% of what it sold for in 1992, but Geneva National can do it.  2015 was a most spectacular year for GN. 81 built homes and condominiums sold. Consider in 2014 only 44 sold. 2013 had 56 such sales. 2012 just 35. In fact, you’d have to go all the way back to the peak market year of 2006 to find more annual sales (91). Geneva National found favor last year, and anyone wondering why need only consider the sad tale of that one bedroom condo. Prices are still down, values are still obvious, and as a result, the liquidity is profound.

I’ve written often about Geneva National. Indeed such a large development in such a small overall market deserves considerable coverage. It’s no secret that I really like Geneva National. I like like it. It’s a terrific development, and as a guy who generally despises development Geneva National is an exception. It’s a fantastic development and our market needs it to bridge the gap between lake access homes on and near Geneva and everything else. The only problem with Geneva National is that it’s too big. It requires too many buyers annually to keep it moving forward, which is why it stalls when things in the market go sideways for a while. But its size isn’t its fault, it’s the fault of the developer who saw only dollar signs when he should have been contemplating the long term ramifications of such a large development. Perhaps a certain Geneva, Illinois developer should learn from Anvan’s mistake?

Value today is apparent in GN. There are deals, and there is value, and in that, Geneva National should continue to capture the attention it deserves. I sold two properties  in GN last year, and I have a terrific townhouse pending sale right now.  The sort of condo that you can buy in Geneva National for $200k doesn’t exist in Abbey Springs even up to $400k. If you want to affordably hang your hat and have a quiet launching point for a Lake Geneva weekend, is there anything better than Geneva National?

While the 2015 volume was comprised of plenty of smaller condo deals, it was nice to see some higher value properties print as well. There were 7 MLS sales over $500k, which is a positive for GN.  When I built my home in GN in the mid 2000s, I figured the primary market would take to GN and drive up prices as my generation sought to upgrade and improve their housing situation. I was wrong, of course, but Geneva National should be on the radar of any primary home buyer seeking a Walworth County residence in excess of $450k.  Additionally, a vacation home buyer seeking a $500k vacation home should generally try to be as close to Geneva Lake as possible. If that sort of cottage isn’t  desirable, then a GN home should at least garner a look.

Inventory in GN has dropped, with just 62 homes and condominiums for sale as of this morning. That’s way down from the traditional inventory levels that hover over 100, and I expect this will help GN in the first quarter. The properties that are for sale largely represent value, and low interest rates should help fuel some solid spring sales. I’m not sure how GN will fare over the course of 2016 if this stock market blip turns into a real slide, but I would expect a drop in volume from that most excellent 2015. A return to normalcy would be good for GN, so if the association can print 50-60 sales I would think that to be a fantastic year.

2015 Abbey Springs Market Review

2015 Abbey Springs Market Review

If we had our druthers, we’d be Abbey Springs. That’s assuming we weren’t we, but we were in fact a large association of homes and condominiums. If that’s who we were, we’d do so very well to be Abbey Springs. We’d laugh at our friends, presumably they’d be other large associations as well, because we, as a large association, wouldn’t consider hanging out with smaller, lesser associations. We’d have our friends, those bloated associations just like us, and we’d sit around and talk about life, about associationy things.  We’d laugh about people who stand up and complain about dues, and we’d laugh about the association presidents who desired, for one reason or many others, to be an association president. We would have fun being this massive association, because if we were Abbey Springs we’d be revered among our peers.

That’s because Abbey Springs just is. It’s just the way it is, the way it’s been, and those ways have found reasonably routine favor with the vacation home buying masses that smartly find their way to Walworth County.  In the way that Geneva National has been sexy at times because of its feast or famine nature, Abbey Springs has just existed.  There was a blip when the association decided to spend trillions (millions) of dollars and update the facilities and grounds. That was a battle and in that there was some sizzle. But otherwise, Abbey Springs is just a 592 unit association on the southern shore of Geneva Lake that plods along without a whole lot of market adversity.

When times were really good, in 2006, Abbey Springs sold 28 total units. Of that mix of single family and condominium properties, just one closed under $200k and four closed over $794k, including one at $1.3MM. That was one heck of a year.  When the market re-set in late 2008, what followed was an adjustment that was necessary and needed. Prices corrected, volume slowed, and what wasn’t well known was how deep and how long this particular correction would endure. While Geneva National muddled along in those rough years, Abbey Springs jus sort of was.  There were 17 sales in 2010, 14 in 2011, 17 in 2012, and 22 in 2013. Abbey Springs, even though prices corrected and volume dropped, fared as well as any large association ever has.

2015 was a very good year for Abbey Springs, but it wasn’t remarkable, nor was it special. It was just a year and Abbey Springs was just Abbey Springs. There were 22 units sold last year, with five of those printing over $500k and seven closing under $200k.  In 2014, there were 20 sales, in 2013, 22. This is a pattern of normalcy at Abbey Springs, and the association should be rather proud of itself for producing such a steady and consistent flow of transactions. Geneva National should be envious of that stability (though Geneva National had a fantastic 2015).

While it’s understood that $300-500k buys a pretty nice condo in Abbey Springs, and that $450k-$900k buys a pretty nice house (including one on Saint Andrews that I sold last fall for $746k), the unique part of Abbey Springs is the lower end segment that thrives. If you came to the lake with $200k to spend on a vacation home, I applaud your sense of purpose. Many in that range would opt for a smaller, lesser lake, where they could buy a similarly small, lesser property. This would be their mistake. Abbey Springs will gladly take your $200k and offer you a small condominium with full access to the unrivaled Abbey Springs amenities, which include, as a reminder, the following: Indoor pool, outdoor pool, restaurants, sand beach, basketball courts, tennis courts, exercise facilities, racquet ball court, game room, in/out service, pier system, and 18 hole golf course.

If you’re looking for a vacation home here, and you’re amenity oriented, there’s nothing like Abbey Springs. The market is sound, the volume predictable, the prices easy to understand. 2016 should be a repeat of 2015, which was a repeat of 2014, which, oddly enough, was a repeat of 2013. Expect around 20 sales here, with stable prices. Low interest rates should encourage buyers, and left over buyers from 2015 should be pleased to find new spring inventory coming to the market this month and the next. If we were Abbey Springs, we’d be awfully proud of ourselves, but we’d try to keep it to ourselves for fear of coming across as too smug.

2015 Lakefront Condo Year In Review

2015 Lakefront Condo Year In Review

I’m just going to say that it makes sense. It makes sense that the lakefront condo market remains stuck in neutral. It doesn’t make sense because of some large demographic shift, and it doesn’t make sense because of some market dynamic that isn’t explainable. It makes sense because entry level lakefront homes are also stuck in neutral, and as long as prices on the low range of the lakefront market remain soft, there’s no reason that the lakefront condo market should succeed.

The thinking here follows very simple principles of market demand, and the reactionary pricing that exists when one market is closely tied to another. If a buyer can spend $600k on a lakefront condo, that’s tremendous. There are many buyers that would find that to be their upper limit, which is a lofty limit by any standard. But many in that range can sneak upwards, they can reach to $1MM, or $1.1MM, maybe even $1.2MM. If they could spend $600k easily but $1.1MM with a stretch, that’s the sort of buyer that would generally be well served to stretch to private frontage, and that’s likely what’s been happening within the lakefront condo market. It isn’t that there aren’t buyers, it’s just that the buyers are being tempted by single family homes that are competing for their vacation loving dollars.

It’s not just lakefront, mind you, it’s off-water single family stealing the condominiums’ thunder as well. If you could spend $550k for a lakefront condo with a slip, I like that idea. But what if you wanted a yard of your own because your dog is super obnoxious and you don’t want to bother condominium neighbors? Well, then you could drive down some road here and find a lake access cottage with a slip for similar dollars. The condo market isn’t flawed, and it isn’t dying, it’s just facing stiff competition.

In 2015, nine lakefront condominiums sold per our MLS. That’s a nice number, and it included condominiums of all shapes and sizes. Someone paid just $187k for a one bedroom lakefront condo at Fontana Shores, and a customer of mine paid $1.195MM for a fabulous lakefront condo at Eastbank with finely appointed finishes and furnishings, a lake view and a canopied boatslip. Other notable sales this year included a couple at Vista Del Lago, a couple at Fontana Shores (including one I sold for $335,500), one at Bay Colony, and a couple at Geneva Towers. It should be noted that one developer’s plan to upgrade Geneva Towers into a building bursting with $1MM+ condominiums didn’t really work as planned. They sold some units, but the initial pricing goals were not met.  All in all, it was a fine year for the lakefront condo market on Geneva.

Currently, there are 13 lakefront condos available on Geneva. My fabulous Stone Manor unit is still available in the high $5s, and my lovely two bedroom condo at the Fontana Club remains unsold in the high $400k range. The market is light on inventory at the moment, which is a good thing. The lakefront condo market functions at its absolute best when the inventory is limited. Too many units available in any one condo development and the market senses trouble, even when there is none. If we can keep the inventory total down in 2016, I’m expecting a similar year to 2015.

Low interest rates should provide plenty of fuel for continued condo sales. Remember, 2014 boasted 11 lakefront condo sales on Geneva, so our 2015 total is sagging behind a bit. I think 2016 will be more in line with 2015, as the market absorbs the remaining aged inventory at somewhat discounted prices. If you’re a $500k buyer and you want your own yard so your horribly loud dogs can bark away, I understand. But if you’re a $500k type buyer and you just want an easy place to hang your hat on the weekends, the condo market deserves a look.