When my Hunt Club Lane property was toiling on the market over the summer, the rest of the upper tier lake access market was toiling right along with it. The summer was unkind to those Geneva lake access homes priced from $700k to $1.35MM, but the past few summers have been equally as ornery. As have the past few falls and springs, and while winter is unkind to nearly everyone, it was especially unkind to this segment of our vacation home market. By late August, buyers that haven’t been seen in at least two, maybe three, years started materializing in this price range, and in a segment as narrowly defined as this, that handful of buyers packed a pretty significant wallop. The upper tier lake access market has been reborn, but whether or not a swift uptick in sales is a blip on the radar or a burgeoning trend is as of yet unknown.
If there was one market at Lake Geneva that I feel particularly sour towards, it’s the very upper reaches of the lake access market. I don’t understand why someone would pay $1MM+ for a lake access home. If that home has a view and a slip, and the home is quite nice, then I get it. But that price for a home with either a view or a slip? It’s not really my thing. Now, with all things at Lake Geneva, there are exceptions. There are exemplary homes in unique locations that might be available sans slip or view, but that would still make sense given a possible offsetting amenity (lavish pool, gobs and gobs of high end charm, etc). But many of the homes in this upper bracket are priced as if it is still 2006, a time long ago when credit default swaps were still cool and Barney Frank still seemed moderately normal. $1MM+ for a home with a lake view? Might not be a bad idea for some, but for me that home either has to sell for $900k or it has to grow a boatslip. In spite of my complaints, many nonsensical buyers still pursue these wildly over priced homes that prey on a buyers affinity for newer construction. This phenomenon I can understand, but I don’t have to like it.
Since September 1st, there have been five closings of lake access homes with list prices between $700k and $1.35MM. There are at least an additional three properties in this segment that are currently pending sale, meaning we’ll have at least eight upper tier lake access closings in the last quarter of 2010. That’s a pretty significant development, seeing as how the previous 20 months saw only eight total sales in this same price range. So is this increase a trend or an anomaly? My scientific answer, that I arrived upon only after hours of thoughtful deliberation, is, who knows? My generous gut tells me it’s a blip on the radar: a run of sales made possible only by pent up demand in the market that is sure to slow as this active handful of buyers completes their target acquisitions. But I very well may be wrong, and there may be a bigger price block at the $1MM mark that I currently imagine there to be. (The thinking goes that if $1MM buys me a decent house off the water, and $1.2MM buys me a crappy house on the water, I’d go with crappy house on the water 101 times out of 100).
Of the current upper-tier inventory, I still like the lodge style home near Aspen Lane in the Oak Glen Association priced in the mid $700k’s. That home meets my criteria of possessing a slip in this price range, and it’s a big house that would take a renovation quite well. I still like a couple of the homes hanging off the hill in Fontana, as their view is solid enough that I can forgive them for not having boatslips (Abbey Harbor slips have gotten downright cheap). Not much else excites me in that upper bracket, but given the lack of cheap lakefronts at the moment, I think some of those $1MM off-water listings will get some play this winter as a lack of available inventory will drive some buyers who might otherwise seek lakefront into the open arms of the upper-tier lake access market. If you’re a buyer in this range, I know a Realtor who would love to help.