Blog : Zillow

Lake Geneva Market Update

Lake Geneva Market Update

It feels like it wasn’t so long ago that I wished for more snow. For more cold. For more winter. Shortly after wishing, all of that came true. Briefly. Since then the weather has been a mix of spring and sort of winter, the dreaded in between that will come to define the next six weeks of our existence. But fret not, for February is nearly over. With it we leave behind the Olympics, and with that, we leave behind the nightly disappointment of a country with so many participants, but so few medals.  It’ll be March soon, and then we can lament the weather in March and wish for it to be April. Once April starts, we have just one more month of wishing for May. Soon, it’ll be nice out.

Even though the weather is haphazard, the real estate market doesn’t really care.  New inventory has been introduced to market, much of it by yours truly.  Pending sales have printed, and new contracts have been written. Some have been accepted. My lakefront in Loramoor closed late last month for $4,950,000, placing that property in what will be a short-lived position of first. Like when a US skater is in the gold medal position before anyone else has laced up their skates. Another lakefront in the city of Lake Geneva closed recently, that of a small hillside home listed and closed at $1.799MM.  I’ll be expecting to see that home torn down or significantly remodeled. A home in the Birches on 105′ of elevated frontage closed for $3MM.

A new lakefront came to market with 150′ of frontage and a $3.975MM asking price. I sent it around but didn’t think too much of it, and then it sold. The market doesn’t always care what I think, which is probably good, since I tend to be conservative in my valuations. A small lakefront in Williams Bay listed just over a buck is pending sale, but there’s nothing more I feel like adding to that one. A level lakefront in the Narrows is under contract recently, listed in the $2.3s.  Rounding out the lakefront activity, there are three remaining 2017 contracts left out there waiting to close, those of lakefronts listed at $3.85MM, $6.5MM, and $12.5MM. It’s going to be a terrific 2018, and we’ve only just begun.  For a full list of available lake access and lakefront homes, CLICK HERE. Feel free to share this post with anyone you know who also might appreciate an accurate list of inventory.

I’ve added some new lake access inventory this month, including a large home in Indian Hills.  Listed at $675k, it will give the new owner an opportunity to engage in the Fontana scene, with very little effort. The home is spacious, with two story foyer, main floor master bedroom, and five total bedrooms. There’s also a two car garage, along with those private Indian Hills lake rights.  I added another home in the lower price ranges this month as well, that of an off-water home in Geneva West. This is about a mile north of the lake in Williams Bay. That home, pictured above, offers a charming spread for a buyer looking for a primary residence in the Williams Bay School District, or perhaps a vacation home owner looking to find privacy at an affordable price.

A particular sale of note involves a large condo in Fontana at the Fontana Club.  I sold this unit to the original owner, when I represented the developer back in 2001. The first sale was of a single unit, then the buyer bought an adjacent unit and remodeled the space into one large residence. I sold that combined unit for him in 2006 for $1.125MM, at the time that would represent the obvious peak in the lakefront condo market. That new owner  has offered the unit for sale off and on over recent years, while the price steadily eroded. That double unit closed this month for $685k. That’s a terrible thing.  The good news for the Fontana Club is that with this sale, and that of my single unit that closed last fall for $390k, the aged inventory has finally and mercifully been cleared from the market. The best situation for the Fontana Club would now be to withhold any inventory from the market so that demand can slowly build.

Overall, I like the way the market is behaving so far this year, but I’m increasingly wary of over confident sellers. I’ve often told you how I personally behave when I’m a seller of my own home. I recognize the fact that I need that buyer more than that buyer needs me. My particular home is the only home I need to sell, whereas that buyer has several different homes he can choose. Sellers so far in 2018 are negotiating from a position of strength, which they have understandably earned.  There are some buyers, as evidenced in the market today, that will pay a seller’s price, no matter if it’s 15% too high or not. But most of the buyers are still smart, even if they choose to work with an agent they found on Zillow, because Premier Agent’s must be amazing! (or willing to pay huge sums of money to buy leads) But these buyers are still reasonably concerned about their investment, and they’re not pushing prices quite as high as sellers would like. I’ve heard of and been part of several negotiations over the last six months that featured buyers and sellers in odd standoffs over insignificant amounts of money.  Should buyers come up? Maybe. Should sellers come down? Maybe. Should you stop working with any agent who isn’t David Curry? Duh.

Above, my listing in Geneva West. $499k.
Lake Geneva Pocket Listings

Lake Geneva Pocket Listings

The business of real estate is a very big business. Prior to the last decade and a half, the big business players in the world of real estate were actually in real estate. They were Coldwell Banker, Century 21, ReMax and others. The biggest players in the real estate industry were the patrons of the industry, the behemoths that grew large and venerable because they earned it on the ground, in the trenches, at the closing tables and open houses. The big business of real estate today has very little to do with those old titans, and everything to do with start ups. Sure, Wells Fargo is still a big deal, but Avant is so much sexier. In the same way, Coldwell Banker is still the number one brokerage in Chicago (no matter what @&^&$ company would have you believe), but they are already what they are. Zillow is now the king maker in the industry, and Zillow looks at what it might acquire in terms of software and hardware, and the small start ups that make the next big thing are the new leaders of the real estate industry.

Both Zillow and the National Association of Realtors, through their various entities that they control, have business models that must continue growing, and at all costs. Zillow must behave this way because they have shareholders to answer to, and NAR must behave this way because they’re terrified that Zillow will make them obsolete (they will). They are looking for what’s next, thinking that some thing that some guys from MIT dreamt up might be worth the $30MM they’ll sell it for. Real estate is the largest asset class in these United States, so anything that can gain traction as part of the process has the potential to be big. Like huge. As the players scan the start up scene for some possible disruptors, they find companies like Opendoor.com. They are the purveyors of an interesting (lame) concept that allows homeowners to sell their homes the moment you’re ready!  The company promises that you can sell your house and avoid the hassle of the traditional sales model, and all you’ll need to do  is fill out a couple of online forms and they’ll buy your house from you. The company then re-sells your house. This is the online version of those bright yellow signs you see along the highway with ransom note style lettering spelling out  I BUY HOUSES. It’s a gimmick that works in an appreciating market, and dies a horrible, VC funded death once the market inevitably pauses or declines. Still, they might sell enough cookie-cutter Arizona ranches to convince some large player to buy them at a trillion times earnings (there probably aren’t any).

 

As the market continues its nice pace forward, more and more agents are entering the business. This is to be expected. As more and more leave their jobs as baristas, car salesmen, and hair dressers to transform their lives by the promise of immediate, unfathomable real estate wealth, the agents who are already established in the business do what they can to hold on to their market share. One way to do this is by controlling listings, because (s)he who has the listing has the power. Control the inventory and control a market, this is the way real estate is done. This is why new companies will list anything and everything. $35k caboose condo? Yes. $2MM lakefront house? Yes. Vinyl ranches as far as the eye can see? Yes. Rentals? Yes. They’ll take it all, because listings represent power. And why do listings represent power? Well, obviously because they ensure revenue by listing side commissions, but mostly because this forever evolving, technological business of real estate still relies on metal signs, pushed into the front lawn.

In an attempt to control listings, and to shield listings from the open market during periods of time when it isn’t in the seller’s best interest to present fresh to market, agents are increasingly turning to pocket listings. Before the MLS, every listing was essentially a pocket listing. Now, with the internet ruling our lives and this business, pocket listings have returned as a unique way to quietly market marquee, or otherwise rare, offerings. Getting back to our initial thoughts about Zillow, and their need to have their zestimatey hands in everything, they have a new feature that allows for agents to market pocket listings. They do this with the promise that it benefits consumers,  but of course we know that it benefits Zillow by having control over more of the inventory, whether it’s public inventory or not. Agents, as they fight to maintain some marketing relevancy, will hold their pocket listings back from these national portals, because if a pocket listing is listed online, it’s obviously no longer a pocket listing.

Lake Geneva has quite a few pocket listings at the moment. They may be true pocket listings, like one I just listed last week on the North Shore in the $4s, or they may be pocket listings of a different nature- unsecured properties that certain agents know are possibly for sale, while the majority of the internet searching world assumes they have the market canvassed. The cloudy, distracted message for today is simple. Want to know about pocket listings at Lake Geneva? Ask me. Want to know about pocket listings in Chicago? Ask a connected agent in Chicago. Want to sell your real estate start up that does something no one asked to have done? Call Zillow. Want to sell your super boring Arizona ranch? Opendoor has a few forms for you to fill out.