I’ve always been jealous of the Hamptons. Not jealous because people who buy there think it’s reasonable to pay many millions for homes that are not on water, and I’m not jealous because those same homes that sell for gobs and gobs of dollars probably don’t even have water views either. I’m also decidedly not jealous that they have famous people there, because personally, I think living next to Howard Stern would be irritating at best. Give me Wrigley and Walsh and Ryan, and you can keep Lauren, Combs, and Kors. Now, Ina Garten? I wouldn’t mind living next to her.
I probably couldn’t handle the Hamptons, what with having to call everyone “darling” while clad in nothing but white from Memorial Day to Labor Day, but I could certainly handle their 2010 sales volume. It’s the volume of vacation home ownership that I’m jealous of, and by all accounts, their vacation home market is turning around much quicker than ours is here. If there were a Hamptons for Chicagoans, it would most obviously and easily be Lake Geneva. Yet, for all of the similarities, sans celebrities, we don’t seem to have the massive volume that they experience and enjoy there. Sure there are more people living in the New York metro area than live in the Chicago metro area, but that doesn’t mean we can’t give them a run for their money.
According to a Bloomberg story, the Hamptons are hot. Is it plural? Or is it like the soccer team grammar that I had to get used to (England are)? Either way, this 75 mile stretch of towns in New York is real estate magma, with volume up, prices up, and most of it owed to increased confidence on Wall Street. What bothers me here is that Chicago is also a financial capital, and even if not on the scale of New York, it’s still home to the CME and CBOT. With New York property selling well (just ask the plasticized ladies of Selling New York), I’m curious why we haven’t seen a dramatic uptick in property sales here so far in 2010. The market is up, but it’s not way up. It’s better, but it’s far from cured.
So far in 2010 there have been 31 total sales of single family homes with either lakefront or lake access on Geneva Lake. 9 of those sales were lakefront, with at least one more pending. The slough of despond that was 2009 registered 25 total YTD lake access sales, 7 of which were lakefront. In those numbers, there is an obvious advantage for 2010. The trouble is that 2008- the year where everything dried up- we had 38 lake access sales YTD with 8 of those being lakefront. Now, I could skew these numbers if that was my bag. I could proclaim 2010 sales to be up 28% (9 sales 2010 over 7 sales 2009), but I’m not the sort. Low volume is low volume, and I think we deserve a little better.
One striking reason that the Hamptons may be outperforming in this race toward some form of recovery simply comes down to price. At the bottom of their market, which apparently they believe they’ve already experienced in this cycle, prices were off 24% from the peak. Geneva lakefront prices are probably off less than that on average, though it could be argued that we’re hovering somewhere near that mark depending on the pricing. A good example of what ails our market can be found by looking at the South Shore Club. There are seven vacant lots still owned by the developing group. They’ve sold thirty-three, but they still own seven. The list prices for these lots remain pretty much where they were at the height of our market, with prices ranging from $999k to $1.751MM. They are not reducing their asking prices, even though the last developer-owned property to close sold at a price that was just 57% of the ask. In other words, perhaps if Lake Geneva would follow the Hamptons lead and cut some of these list prices down to where it excited buyers, we’d be further along our own road towards a volume recovery.
The other thing that irritates me is that designers from New York famously have homes in the Hamptons, while designers from Chicago that I talk to think the idea of a vacation home is far flung. Nate Berkus, you know exactly what I’m talking about… So perhaps New York gets it to a level that Chicago does not. Whatever the case, if you’ll let me find you a deal in Lake Geneva I’ll promise you two things. 1. I will never call you darling. 2. I will never show up to a party wearing all white. I forgot 3, but 3- you’ll never run into Howard Stern at Sentry. See you at the lake.