Blog : General

Weekend Update

Weekend Update

Sadly, the big story this morning is that of a kayaker who died in Geneva Lake yesterday. This sort of story isn’t nice to write about, but every unfortunate occurrence is an  admonition for the rest of us. Lakes in the spring are cold. The sun may be warm, the wind still. But the lake is still icy cold. I’d guess the water temp in Geneva today is around 52 degrees. Maybe 55. That’s cold enough to take your breath away, and if you lose your breath when you’re in the middle of the lake, your life cannot be far behind. I don’t know if this poor man had a life vest on, but remember to always use a life vest if you’re out on this lake in a vessel as unstable as a kayak.   It’s a sad story today, for sure.

The shore-path-race seems to be as unpopular as anything has ever been. It’s as unpopular as suburban style housing developments proposed for our cornfields. It’s unpopular. The city alderman who approved this race should remain ashamed, and hopefully they’re being bombarded by angry letters and calls from lake residents who wish to see their path left for the dreams and the wanderers. Several local groups have taken action against this stupid race, and with any luck it’ll be called off before the first ankle is sprained.

It’s my birthday this weekend, which is nice for me. But it’s also terrible because I’m getting old and my beard is graying and my temples have completed the process. I sat through my son’s spring music concert the other night.  As a proud parent and school alum, I had every reason to sit still and marvel at each squeak from the flute and eat off-key solo. But I have found, that even at my advancing age, I still lack the maturity to sit still for 90 minutes while high schoolers sing Disney songs. Perhaps this means I’ll never grow up. Perhaps it means I’ve failed at this game. But as Mark Hoppus once said, No one should take themselves so seriously. With many years ahead to fall in line, why would you wish that on me?

My Morel season was another bust this year. I didn’t have time to look as much as I should have, and when I did I didn’t really find many. A few dozen, perhaps. I know morel season waits on no man and yet I expected it to wait on me. It didn’t. And now I’m another year older and have scant few morels to show for it. This is something I’ll have to live with until next May, when I’ll try to right the wrongs of 2017.

Lastly, if you were in the Lake Geneva Starbucks this morning at 7 am I did spill that entire cup of coffee at the cream station. Everything was going fine until I looked up while putting on the lid. The entire cup poured onto the counter, the floor, even into the little container where the Splenda reside. I felt sort of bad about this, but quickly used one hundred or more napkins to tidy up my mess. I apologized profusely to those around me. But if you were me, and it was your birthday this weekend and you hadn’t really found any morels,  are you trying to tell me you wouldn’t have also spilled your coffee?

Happy Mother’s Day to my mother and my wife and all of the other mothers.

On Markets

When a real estate market is slow, the fundamentals matter. The price per front foot, price per square foot, of the land, not house- this isn’t Beverly Hills- it matters. The prior sales price, the current list price, the expected discount to ask and the all time highs against the current cycle lows. This is the sort of research that matters in a down market. This sort of thing mattered in Lake Geneva, at one time, back in the good old days of 2010, 2011, 2012, 2013, back when market context and market forecasting was everything. RIP, days when things mattered.

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Don’t get me wrong, they still matter to me, to those among us who seek value in times good and bad. All of those things will always matter to me, which is why I’ll likely spend the remainder of my working days loving tumultuous market times and tolerating times of hyper lift. It’s easy for Realtors who lack a greater degree of curiosity to see a rising tide and throw everyone into the sea. Leave your fancy math behind and jump into the water! Quickly, we haven’t much time! This is what they say, and this behavior is an insult to my intelligence but mostly to yours.

Delavan Lake this year has performed remarkably well. There have been no fewer than 11 lakefront sales, which is nice, but most impressive is that six of those have closed at or over one million dollars. Nice job, Delavan. I hope that most of those sales occurred in the winter, early spring, or the coming fall. Those are the times when the water rests a bit, and if you weren’t a student of water clarity (I have my PHD) you’d be forgiven for thinking the water is fine there. The sales mostly make sense, and even the outlier that closed last week makes some sense. But this is before you consider the prior sales activity- the peaks at the high and the supposed valleys at the low. Things look fine, until we dig a little.

If we throw out the highest lakefront sale at $1,599,000 and consider the other 10, the average lakefront sale this year printed at 84.4% of the ask. The top sale, the one mentioned prior, closed at full price. That’s 100% for the math-hating-market-hypers. I was about to demonstrate the egregious price per foot difference between this top sale and the others, but Delavan Lake is an odd bird and doesn’t really follow any rough price per foot outline that can be trusted. It’s especially difficult on a lake like Delavan, where some spots you can walk on water due to weed growth, and other spots are more lake like.

That property had closed in the fall of 2008, at what was likely very near the top of the market, for $1.425MM. It sold again in 2012, at what would have been the bottom of the market, for $1.3MM. For perspective, the nearest priced sale to that one, a victorian style Delavan lakefront that sold for $1.44MM this year, had sold for $1.657MM in 2012. Some of the other sales on Delavan this year also sold prior in 2012, and some sold then for less than the recent 2015 sale, while others sold for less. It’s this sort of research that should be done for these sorts of sales.

I am not, as you have noticed, a Delavan Lake expert. I don’t want to be such an expert, and I never will be. I’ll leave that to the agents who are actual experts on that lake, of which there are several. I’ll stick to Geneva, and I’ll do that because this is the market that I know and understand, and this is the market where most pricing makes some level of sense. The two full price off-water sales near Geneva this year, one at $1.475MM and one at $2.2MM aren’t included in that prior statement.

Today, there’s a very serious admonition. Pay attention to the numbers. Pay attention to the market cycles. Pay attention to prior sales, prior failed marketing attempts, and future downside. Just pay attention. If you have an agent that’s not from this market, one that wishes to be part of the market solely because our prices are nice and rich, then suggest to that agent that they keep your best interests in mind and refer you to me. That’s a terrific way to pacify your city agent and gain exposure to some high caliber local knowledge. After all, we can’t be experts in everything, which is why I’ve spent my life trying rather hard to be an expert in all things Lake Geneva and nothing else. Delavan Lake? Why I barely know where it is.

Lake Geneva Market Update

At first blush, it makes no sense. Why, after so many years of a predictable pattern, are homes in excess of $4MM selling so frequently and easily in 2015? The hedge funds had their huge year in 2011, making it reasonable to expect 2012 and 2013 to be high flying years. The same years, the stock market gained and gained, allowing those with large scale equity investments to cash a bit out and buy real estate, if they so properly desired. If this upper bracket buyer was sensitive to interest rates, they’ve had years and years of them. The catalysts have been in place for several years, so why 2015?

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I think it’s private equity. You have Midwestern businesses of varying sizes and industries selling at premium prices. The simple logic goes like this. Mr. and Mrs. Businesspeople own a lake house. Because they’re successful in business and obviously intelligent, well rounded sorts, they own their lake house at Lake Geneva. Their lake house was bought when they ran that business, the one they spent so much time building. They bought that first house with revenue. Private equity found them, negotiated with them, and now our friendly business couple who already loves Lake Geneva just sold their business for many times earnings. They were rich before, revenue rich, but now they’re lump sum rich. Would it be strange to expect them to flip out of a $2MM lakefront and into a $5MM lakefront? Of course not. The lakefront market on Geneva has had a tremendous run at our upper range, and I say we owe it all to private equity.

You’ve likely noticed that I haven’t been writing market updates every day. I haven’t been doing this because the market is hot, and I grow tired of saying that. It’s hot! I say. Everyone else says it, too. They say it with fewer words, sometimes just breathless gestures, othertimes with pictures, but they’re all saying it. The market is hot, it’s active in all segments, and 2015 is shaping up to be a banner year. I think that would be boring to write about three days a week, so I sometimes choose to enlighten you with other meaningless tidbits.

The entry level lakefront has been offering up some tasty deals this year, and up until recently the market has mostly failed to take advantage of the ample inventory. This last week, two entry level homes have gone under contract. One near Abbey Springs, as in not sort of near, but right smack dab on top of it. Listed in the $1.1s, this home was cheap enough and a buyer finally looked past the oddly complicated approach. The other home was another that suffered through a slug of showings and a systematic chopping of the price. This Lake Geneva Highlands lakefront is now pending sale with an ask in the mid $1.3s. Think the market finally caught fire and gobbled these up because they feared they’d never find something quite so good? Think again. The prices came down, and buyers bit.

Other lakefronts under contract include a private listing in Geneva Bay Estates for $2.65MM, my listing on Bonnie Brae for $2.995MM, a lakefront lot in the Elgin Club ($1MM), a shingly thing in Cedar Point in the mid $2s, the bombed out cottage ($879k) shell near George Williams, an old house on the hill in Glenwood Springs in the high $1s, and the large Baywood Heights-ish ranch on Basswood just under $5MM. My listing in the South Shore Club is pending sale, as is the Pickell built home on the hill in Fontana. Expect sales of both within a few weeks. There is an offer on the large Fontana lakefront listed in the mid $4s, so let’s expect that contract is put together. That’s the sort of buyer that would have been better off looking seriously at 1014 South Lakeshore in the $7s, as the all in number for a land buyer in the $4s will likely far exceed $7.

The lake access market is active as well, with buyers reaching back towards off-water homes that lack slips in the $600k range. This isn’t a range I love, unless the house is somehow special. A boring house on a boring lot that lacks a view or a slip in the $500s? I’ll pass, thank you. For all the activity, I still see value in the sub $550k price range. There are some winning properties with slips that can be bought around $500k, and there are some reasonably nice lake access homes in the $300s that look interesting to me.

The lakefront condo market is just okay, with plenty of inventory and plenty of value offered. There’s a pending deal on another Geneva Towers unit, as the developer who wished to transform the condo market there has mostly, by my math, maybe broken even on the effort. Maybe he’s made a fortune, but it looks to this outside as an endeavor that maybe wasn’t worth the effort. Abbey Springs housing is hot, with three single family homes pending sale there priced over $550k, including my listing on Saint Andrews for $765k. Geneva National is similarly active, with loads of interest in the condominiums and single family homes. I have a deal pending on one of my Terrace Court condos, and another contract pending on the GN Saint Andrews.

What to expect this fall? The same. The market is active, deals are plentiful, and buyers have largely pushed aside any concerns over the stock market tumult. If buyers wish to make 2016 a lakeside year, then they’d be wise to begin the process now. Not in January, not in March, but now. Start the hunt. Identify the target. And most importantly, avoid disastrous decisions by letting me be your guide.

Above, my newest listing. An Eastbank townhome with 3300 square feet of brand new luxury. Four bedrooms, four baths, canopied slip, two car garage, lake views, and so much fancy. $1.299MM

Trust

I took my car in to be fixed. The mechanic was nice enough, the dealership shiny and large. Emblems and logos, everywhere. I normally sit in the lounge, where they have a chef that makes sandwiches and soups, one of each per day, as well as some cookies and snacks. I like that lounge. I brought my car in because it made a rattle that I didn’t like, and so I sat in the lounge while the mechanic determined the cause. I wondered if the noise came from the wheel. But it couldn’t come from the wheel because I felt it in my seat when I went over a bump. Maybe it came from the chassis, though a rattly chassis would be much worse than a rattly wheel. I waited. What was taking so long?

The mechanic’s name was Jeff. He had greasy hands and greasy nails, and I thought that there would be no way for him to clean those nails. I thought that some days he must have his hands perfectly clean, and when he does he probably looks at them and makes sure people notice. Like he’s a hand model. But he was under the car, standing there with a flashlight, looking at the various parts and thinking. I know he was doing this because I left my seat in the lounge, threw away the paper plate that my chicken pesto panini was served on, and walked around the parts department to the shop. Then I stood under the car next to Jeff and turned the flashlight on my iPhone and stared at the underside of the car as if I had seen one before.

I had, after all, once almost changed a tire. I had a flat when I was driving to Minnesota, and before calling AAA I had considered changing the tire by myself. I even looked around for the spare tire, but when I realized it was in the trunk, under a bunch of things I had packed for my trip, I decided against the action. I suggested to Jeff that this metal rod might be the culprit, and I reached up and shook it violently. I told him that he needs to consider that the rod is the problem, and that we needed to sit down and have a meeting about it, because I, the person who nearly thought about chaining a tire once, have determined that this is our problem. The tie rod.

Jeff ignored me, even though I shook the tie rod again to remind him that it wiggled when I did so. Jeff said I should leave the shop now, because I “didn’t know what I was talking about”. I told him that this was no way to speak to a customer, and he told me that’s why there are nicer men and women with name tags who work at the computers outside of the shop, the ones who don’t have greasy nails. He said I should leave. I asked about the tie rod. He said it wasn’t the tie rod. I shrugged my shoulders and said it was the tie rod. Then I fired him and took my rattly car down the road to another dealer, where I stood with a mechanic named Brian and shined my iPhone light under the hood with him.

I didn’t really do any of these things. But I do speak with sellers every day, and I am as Jeff, or maybe Brian, and they are me. They tell me that they know better than I do. That the market isn’t really a market, but rather the market behaves in the way that brokers tell it to behave. The suggestion is that if the brokerage community gets together and enforces a strict $5MM minimum list price on all lakefront homes that, in some time, this will be the norm. A 50′ lakefront home will sell for $5MM, and a 200′ lakefront home will sell for $5.5MM. Sellers of unique or otherwise overpriced properties have terrific ideas as to how to accomplish those market defying goals, except that all of their ideas are the equivalent of me, violently shaking that tie rod.

San Francisco Endorsed

There are old maps that were drawn by those important men who lived a long time ago in Nantucket. The maps show these entire United States, and Nantucket encompasses most of the land East of the Mississippi. There are other states and territories on the map, but the map shows Nantucket, large and proud, bigger itself than any other state or territory drawn. This phenomenon occurred because at the time, Nantucket was the center of that particular artists world, and since it was the center, every other geographic location was unimportant and insignificant.

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Lest you think this was purely an old timey phenomenon, if you were to ask someone who lives in San Francisco to draw a map of these Unites States, the map might look somewhat similar in skewed proportion to those Nantucket maps of old. San Francisco would be large, California would be huge. On the other Coast, New York would be gigantic. In the middle, some insignificant states wedged in, the collection of which would barely add up to the size of San Francisco.

Since I am from Wisconsin, and swell with pride at the mere mention of my home state, I would draw my own map. In that map, Wisconsin would make up the entire Midwest, with small allowances made for Chicago, and a small misshapen glove the size of Lake Geneva representing Michigan. The coasts would exist in thin little strips, perhaps the Pacific coast appearing as the size of Fontana, and the Atlantic Coast the size of Williams Bay.

On Friday night, on what was night one of a most epic wedding celebration, I stood near the dance floor, because near is as close to any such floor as I will ever get, and a man who also eschewed the dance walked over to me and we began the sorts of conversation that people have on and near these floors. We shouted at each other, as loudly as possible, while waiving our arms to enhance the communication, and carried on a conversation that likely neither of us clearly heard. He was from San Francisco, and he had never been to Lake Geneva. He asked about the lake, about why it is what it is, and what it is that made this elaborate wedding weekend take place here, of all the other important places that the bride and groom could have chosen.

I yelled back something about the size of the lake, the clarity of the water, the depth. I told him it was near Chicago, but not too near. I told him that it’s just the place to be, and that, was that. There was nothing else I could scream, nothing else that would make sense. He looked bemused, in the way that someone from California would look at someone from Williams Bay, because California is so much more important than Williams Bay and to ever suggest an alternative is to be naive and small minded. We parted ways so I could scream in the ear of someone else.

The next night, at the Lake Geneva Country Club, while the dancing was occurring and while I was watching, this same guy made his way towards me. We screamed at each other to indicate a Hello, and then he shook his head. He didn’t say much this time, and I didn’t scream much back. He just said, I get it now. He had spent 24 hours in Lake Geneva, attending a pre-wedding lakeside dinner. Attending a lakeside wedding before boating to a lakeside reception at a venerable old club. It didn’t take more than that, and a guy from California told a kid from Williams Bay that he had seen all he needed to see, and now he understood.

Ban Photoshop

I admit this morning to being distracted. In front of my office at this moment there is a giant backhoe, digging out random sections of Geneva Street. The bucket first swipes into the earth, pulling up the old street and the shoddy base, into the gravel and then the black dirt. The operator is smooth with this bucket, and he cautiously digs, pivots, and dumps the newly destroyed rubble into a waiting dump truck. This has been going on in this particular hole for the entire morning. I try to look away but I can’t, the hypnotic ease of this demolition keeps interrupting my view. I hope the natural gas lines are clearly marked, otherwise this will be my last entry.

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But every morning I’m distracted, so this isn’t some sort of new occurrence. I’m not distracted when I drive my kids to school, when they either fight loudly or sit quietly, awaiting their daily dose of learning. I’m not distracted when I first sit in this chair and pull it up to this wooden desk. I turn on the computer without any trouble, and every morning after scrolling through emails, I check on the MLS. I look to see what lakefront homes may have been listed. I check out the condos. I look for some land. I look because I need to know what’s happening at every moment of every day. This is when I get distracted.

The images that greet me each morning are getting frightfully cartoonish. The art of real estate photography has come a long way in the last 10 years. Back then, we just took some pictures, loaded them onto a computer, and then loaded them into the MLS. This wasn’t ideal but it worked, and it worked efficiently for quite a long time. Today, the good Realtors (like this one) pay photographers to take pictures for them, knowing that it is in the best interests of our clients to outsource this important task.

The hiring of outside photographers is not the distraction, rather what happens to those innocent photos once they’re loaded into the computer creates my morning discomfort. It’s bad enough that someone, somewhere, thought that what everyone really wants to see is a distorted fish-eye, drone shot photograph of a house. This phenomenon is getting more popular, as agents race to prove that they’re technologically advanced. If I were marketing a 40 acre property and needed to show the width and astounding depth of that parcel, I may entertain the use of drone photography. But it’s getting a bit excessive and odd when drones are used to show unflattering angles of small cottages.

But the fish-eye drone shots aren’t the worst, and they aren’t what throw me off my game very early every morning. It’s the photoshopping. It’s the application of blue to each sky and bright green to every blade of grass. It’s the exposure alterations that make my cones and rods cry for mercy. It’s the camera lens that makes a 12 x 14 den look like a 28 x 40 ball room that insults my intelligence. It’s the twinkly lights in every room, where each shot looks like someone waded through the fog to capture the image. It’s the manipulation of reality that I’m distracted by.

While I am one for limited government involvement in all things, I think the false advertising of such reality altering CGI should be outlawed. Are you turned on by the pictures of homes for sale on Geneva that look as though they are nestled against the azure waters of Eleuthera? Does this manipulation of actual pigments and tones make you want to buy something more than you might otherwise? Far from being an old curmudgeon, I am a young curmudgeon, and now I need a nap, because I just checked the MLS and my retinas ache.

Above, a picture I took of Williams Bay this morning.

Of Loyalty

A marriage can really only work if both parties have some leeway to say things that the other person may not like, without fear of devastating reprisal. For instance. If I told my wife that a certain top makes her shoulders look too big, or she told me that everything I’ve ever tried on makes me look fat, we’d assume that this is okay and won’t necessarily lead to a divorce. We can say these things because there’s some form of engineered commitment here, something greater that will withstand the sort of attacks that come when you take your wife shoe shopping and she doesn’t find the sort of shoes she’s looking for.

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Because of this open-thought policy, marriages are generally more substantial and rigid than casual relationships, the sorts that feature only those immature, early niceties. If I were a single person, and a girl who is not my wife asked me if a certain top made her shoulders look too big, I’d suggest that to think such a thing is pure sacrilege, and that her shoulders are the most perfect example that anyone could ever hope for. In fact, my eyes can see only imperfection in the surrounding world after having finally seen such a set of shoulders. If my pants/shirts/shorts/shoes/hats make me look fat, and I asked her about that, and she weren’t my wife but instead, some lady on the street, she’d tell me to stop being silly, that nothing could be further from the truth. In fact, those pants make me look thin, and if I wanted, I could drink Whole Milk and not just two percent.

That’s because initial relationships are heavy on flattery and light on everything else. They are more fun because they are less encumbered with any sort of truth. This preference for superficial fawning is why relationships between people have a tendency to erode, and this same preference is why some of the most outwardly successful real estate relationships are some of the biggest failures. Without any commitment level, there’s only fear of what might be said wrong, which leads to a glossing over of the details and the absence of lasting truth.

Buyers and sellers alike tend to bounce between agents, depending somewhat on competent representation, but mostly on whim and weekend fancy. If a buyer calls me to see houses, I’d like to assume that the buyer is doing so because he or she is remarkably intelligent, and has decided to increase their particular variety of intelligence by combining it with my variety. I’d like to think that a buyer knows my track record, my successes and my failures, and thinks they’d like to partner with someone who has far more of the prior and few of the latter. I’d like to think these things, but the fact is that a buyer might be seeing houses with me because they’re bored, and because their other agent is busy shopping.

A lack of purposeful loyalty is what makes every car dealer ask you what they need to put you in a car TODAY. They don’t ask what you’d like them to keep an eye out for, so that they might call you when that yellow PT Cruiser crosses the auction block in Sometown, Indiana. They ask what they can do to make you drive away in that new car, and they do this because they know if you drive away without that new car, the odds of you ever returning are very low. It’s because of this that they promise the world, promise that the particular variety of car you want is so much better than the other variety that might be available down the road. They tell you what they can when they can because they know you’re not going to come back.

If you’re that car shopper, do you suppose you’ll be getting nothing but the perfect truth from that salesman? If you show up on a Saturday unannounced and drive from dealer to dealer that day, so you think you’ll be getting a single opinion that isn’t entirely and completely self serving, with the dealer being the party served? Of course not. You’ll be hearing mouthfuls of skew, and you’ll be left to decipher fact from fiction later on, when you drive home with the same car you started the day with.

If, however, you develop a relationship with a dealer, that dealer has the leeway to tell you the truth about that yellow PT Cruiser. You shouldn’t buy it, and he’ll tell you that. He’ll tell you that you’d be better off in something different, and while he doesn’t have that something different on the lot at that moment, he’ll get one and he’ll tell you when he has it. The dealer can do this because he’s relatively certain you won’t be running off the buy another car from the neighboring dealer, just because they have a shiny new sign and a guy in an ape outfit spinning a sign.

In the end, this isn’t about the loyalty to that dealer or to your Realtor. It’s about you, the client, being served with accurate assessments of markets, of houses, of what it is that makes the most sense for you. If you’re pin balling between agents, you cannot expect to gain any lasting market insight, and so this isn’t a plea for loyalty for the sake of a business model, this is a plea for loyalty so that you, as the client, can listen to unbiased advice and make the best decision possible. I’d never let you buy a yellow PT Cruiser.

Labor Day Weekend

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Back on Wednesday with all sorts of riveting commentary. For instance, did you know that all the cool people are at Lake Geneva? I spent Saturday aboard a most beautiful boat with those cool people. Then Sunday at the pier of some more cool people, and later Sunday at the same pier for this sunset. Monday? More cool people.

Knollwood Sells

Generally speaking, if a home on the lake hits the open market, I email the listing to someone. Let’s say you’re looking for a lakefront for around $1.5MM. If one comes to market, I send it to you. This is because I sell real estate. In the same way, if I have a buyer looking for a home priced around $500k with a slip and such a property becomes available, I’ll email that information to that buyer. This is not rocket science. Because I have plenty of clients, and am always looking for more, I send information out when I have it, in the hopes that someone will buy whatever it is that I’m sending them.

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This is the way every real estate agent operates. Most set up automated listing reports, so that when you contact them with a question, they add you to their automated list. I don’t do this, because I think it’s rather insulting to send someone properties that really don’t line up with the sort that they’re looking for. This is why when a large home in Knollwood came to market earlier this summer with an asking price of $2.2MM, I didn’t send it to anyone. I didn’t send it to anyone because it was a home off the lake, without frontage, without a slip, without privacy, without and without, for $2,200,000. Got a $20 bill in your pocket? Good. We’ll need to collect 110,000 of those in order to buy this off-water, no-slip-having, no-privacy-affording lake access house.

Earlier in the year, another home like this came for sale. This one was on Academy Lane, priced near $1.5MM. I didn’t send that one out to anyone, either. Because it was an off-water home without a view, but with a slip, but without any lake proximity of any notable, or acceptable, distance. I didn’t send that one out, and just like the one for $2.2MM that I didn’t send out, they both sold rather immediately. The reminder for you today is this: Location, location, location? That’s the old rule, and you’re being naive and old fashioned for even knowing what that means. Shiny, fancy, sparkly? That’s what really sells real estate.

The Knollwood sale is likely the first sale of its kind at Lake Geneva, ever. Never before has an off-water home that lacked a slip sold for this sort of money, with one possible exception being a Fontana home that sat high above the lake on the north shore. But even that home had a unique location, towering above the lake, hanging on the edge of the cliff that separates the lakefront from everyone else. This Knollwood home was just a lakeview cottage location, with a cottage lot, surrounded by cottages, but there it was, $2.2MM, and someone aggressively bit it off and closed on it this week for full price. That’s 110,000 twenties in case you forgot.

What does this new rash of shiny buyers mean for the market? It means very little, really. It means that if you’ve built some giant home as an ode to your importance, and that home isn’t in a location that supports such an endeavor, you still might be okay, as long as you’re okay with losing some money in the quest for liquidity. If you build it exceptionally fancy, they will come. It also means that I’d expect to see some more speculative activity in this market place from here on out. Builders will take notice of this. They’ll see that no longer are they bound by some unspoken vow to only build a home that makes sense in the market. There are, at this moment, two different lakefront spec homes being contemplated and planned for. Perhaps these builders should have just bought a little cottage in some unimportant location and built a home there. Throw in some marble showers and a Wolf range and you just might find a live one.

In other news, the auction house in Lake Geneva closed for $2.7MM Well done to the seller, for selling this shared pier property for that nice number.

Still Summer

Some would say that winter starts when the first snow flakes flutter to the ground. Those who say that would be wrong, because we all know that snow can fall during a rare October, and no snow in October could ever make someone believe that it was winter. Even when snow falls in November, Thanksgiving is still to follow and in no way can winter begin before Thanksgiving. Everyone knows that. But snow in October alerts you to the coming of winter, just as some wayward cold front in August alerts you to the coming, more lasting, fall chill.

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This week at the lake feels very different. The man who stands on the street near my office is back at his post. He stands on the corner holding a mobile stop sign, and when children need to cross the street he walks out half way to meet then, brandishing his sign towards the oncoming traffic. I see him every day during the school year, first during these warm days, then during the rainy days, and then, finally, in the snow. He’s there now, and it feels like he’s early. It feels like he shouldn’t be there yet, but there he is, walking half way to meet the children who are begrudgingly walking to school.

The lake has been calm these last few days, not calm in the way that summer weekdays are calm, but an off-season calm. There are boats, sure, and there are those taking their last gasps of summer vacation right now. The forecast allowed for some flexibility in those who have that ability, and as I drove through Lake Geneva yesterday I caught a glimpse of a boat anchored at the edge of Geneva Bay. I didn’t know who was on board, but I looked over in time to see one of the loungers cannon ball off the bow. No one has yet told him that summer is over.

The street crews in front of my office this morning seem to be in no hurry. There are men walking back and forth, looking at curbs, and looking at the curb in front of my office that was supposed to be an apron. They’re looking and walking, radioing and chatting. They aren’t in any particular hurry. There’s no immediacy to their work, and that’s because it’s 72 and sunny at 8 am. They walk slowly, like the kids on their way to school, wondering why they’d hurry when this summer isn’t going anywhere.

Does it cease to be summer when the kids go back to school? Does it cease to be summer when there is some morning chill, and when the sun sets nearer to 7 than to 8? Does it cease to be summer just because it’s September, and because the aisles at Lowes last night were decorated with the oranges and browns of fall? I thought about this last night as I stood outside under a bright moon. I stood and I listened to the chorus of the crickets and the delightful hum of the hoppers. The night was alive, not at all like fall, but just like summer.

Geneva Lakefront Update

I read an article yesterday about how one Japanese day trader made thirty-four million dollars last week. He had a hunch about the markets, and rode large positions of options to an incredible win. I did not do that. I bought some stocks on one day, lost money the next day. Sensing the opportunity, I bought some more on the following day and then lost more on the day after. I have never made a winning stock trade in my life. In the same way, I have never made a bad real estate move in my life. I should, I suppose, stick to what I know best, and leave the real money making to the day traders who buy and sell options in between playing video games and online poker. That trader made money, I lost money, and I expected the real estate market here to respond to the tumult. It didn’t.

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Showing and offer activity has not slowed down. Maybe it’s because everyone was expecting a correction in the indices. Maybe it’s because the swing was so low, so fast, and then back up, even faster. Maybe people just don’t care like they used to. Our weather has been decidedly lame over the past two weeks. First, the winds blew. They blew so hard for so long that “world class” sailors in large scows decided that it was just too windy for them. In a related development, I’ve decided take today off because I’m too broke. When the wind stopped, the rain came, and with it the fog and the strange, soggy, summery still that I find so pleasing. But while I found the cool, calm to be tasty, those wishing to squeeze more summer out of these remaining weeks were none too pleased.

Yet for the market shake up and the soggy afternoons, the market hasn’t taken notice. There are buyers, so many buyers that in fact it’s quite a spectacle. The lakefront market is leading the charge, with a particular attention on those upper bracket homes priced in excess of four million dollars. As a reminder, this market typically prints one sale over $5MM annually. Today, we have buyers for every segment, though it’s obvious to me that the market is yielding the best value on aged inventory, and most of the entry level lakefront segment. To make this easy on you, and better than just sending you a picture today with some nonsensical motivational quote, here’s the rundown of lakefront activity.

If you read along weekly, which I do hope you do, you’ll know that the auction house on the East shore of Geneva is pending sale. That’s rumored to be around $2.75MM, also rumored to be a sale to a buyer who was new to the market. Not a surprise. A sale is pending next to my Starboard Cottage listing ($2.375MM), that of an old cottage in tough shape listed at $2.175MM. There’s an entry level lakefront in Geneva Manor with no garage and no yard pending for $1.75MM. An off-market home in Geneva Bay Estates with a $2.65MM ask is under contract, having found the buyer easily and quickly without ever listing in the MLS. I showed that home twice, earlier than anyone else. Did you know about that listing? No? You should have been working with me. Continuing our westerly route, I have an offer on my Bonnie Brae listing, though it isn’t yet under contract. A lakefront in Cedar Point priced in the mid twos is under contract, a nice house on a reasonably nice lot that will now sell at what I presume to be a nice market price. The Loch Vista lakefront next to my parents’ home just sold for a bit over two million, so my father now likely assumes his house is worth well in excess of that (spoiler, it isn’t). The little shell of a lakefront on Outing just West of George Williams College is under contract off of an $879k ask.

The Orren Pickell built home on the hill in Fontana is pending sale in the $5s, and an old lakefront in Glenwood Springs with a $1.85MM ask has a buyer. There’s a contract on a For Sale By Owner at pier 511, the $4.5MM ask easily assumed to be value by the market. That’s the rare offering of a nice enough house on a nice enough lot, and $4.5MM is something the market can easily support. And so after two offers last week, that one is under contract. As an aside, I showed that home several times, to buyers that are smartly working with me, which is why they had early looks at that offering. Keep that in mind if you’re working with an agent and you weren’t made aware of that property, or the other one in Geneva Bay Estates for that matter. If you think that waiting for ads in a Chicago newspaper is the best way to find a lakefront home here, that’s how you end up at auctions and not in the living rooms of off-market listings.

The large ranch-ish house on Basswood is pending with an ask of just under $5MM. That house features a nice lot and some normal finishes, but it’s a great spot on the lake so I’m okay with it. I have a contract on my South Shore Club listing priced at $1.649MM, so expect that last bit of aged South Shore Club inventory to be cleared within the next month. There’s also an accepted offer with a client of mine on the last available vacant lot in the South Shore Club, lot 8. Rounding out the lakefront contracts, the small vacant lot in the Elgin Club is pending with a $1MM ask. That’s no fewer than 13 lakefront properties with contracts at the moment, and it’ll be 14 if I can get my other current lakefront contract put together this week. That’s unprecedented activity, and I’m not quite sure what to make of it. Is it frothy? Yes. Are the prices toppy? Not really. Excepting a few sales, these properties all make some sense at the prices they’re scheduled to sell at. Some are outright deals, others are market prints. Some are outliers, selling at silly prices. If you’d like to know which ones are which, let’s chat.

Summer and Fall

I can’t say that it comes as a surprise anymore. Every season follows this same pattern. When the season is a long ways off, I pine for it. In the dark of winter I wish for those first warm days. I wish for melt. I wish for the return of the singing birds, and I count those quiet days. When those birds do return and the melt along with them, I have little use for that variety of in between. The birds are too loud and the melt too messy. I don’t like spring much when it’s spring, and so I go about wishing for sustained warmth, for heat, for bright skies and white topped waves. I spend too much time and even more energy wishing for what’s next.

There was a time when I thought I might be able to slow this wishing down. I thought I’d find a way to live in the season, to enjoy it so much that I forgot what came next. If I fished and sailed, swam and boated, basked and rested, I might be able to forget what came before and ignore what was to come next. I thought if I made every effort to focus on the present I’d be able to enjoy it more. But instead, all that immediate focus made me realize it was soon to pass, and I felt even more pull towards the next thing, that thing that I tried so hard to forget.

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Instead of wishing for time to slow, for wishing the season to linger, for wishing things to just be still, I then tried to think less. I tried to just let the season come, without much reverence for it, without the wishing for it to come and the wishing for it to stay. I tried to live without concern for the weather, to live each day in the same way, no matter the temperature or the sun or the month or the shade of the leaves. I tried to wake each day and work, in July as I would January, thinking that this focus might allow me to live more fully, to live more contently.

But at this late date in August, it’s obvious to me that this new attempt has also failed. Instead of living more casually, in drinking the sun in sips whenever I felt like it and in doing so finding more peace and equal rest, I find that my purposeful ambivalence hasn’t allowed any more enjoyment than the frantic focus of prior years. If you wish for summer to stay it won’t. If you trick yourself into ignoring it, it’ll pass just as quickly. These seasons start and they end, and the next season comes. Ready or not.

Today, I know there is still summer left. I know next week it will be warm and sunny, and the water temperature will remain in the seventies, as it has every day since sometime in late June. I know that I’ll have time still, time to boat and to swim and to rest. But I also know that I won’t casually enjoy any of it. I know that I love football season, and I love jeans and boots and orchards and fires. I know that I love this, but I love what comes next perhaps just as much. I also know that I love orchards and jeans and the way the fields turn from green to gold, but I, too, love the first snow and the way a wood fire warms a room.

Lake Geneva: Auction City, USA

I read an article a while back that profiled the lives of those fortunate people who had made the decision to jump from the Golden Gate Bridge. These people were fortunate because in spite of their desire to kill themselves by jumping from that bridge, they survived the fall and swam to safety. One memorable line from a survivor detailed how at the point of the jump he realized that every single thing in his life that he was upset about was something that he could fix. Everything except the fact that his feet had just cleared the railing of that bridge.

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Even though this gentleman, and many like him, jumped from that bridge and lived, that doesn’t make jumping from the bridge a good idea. Sure, you get to share your story at high schools and corporate learning sessions. And you get profiled by the New Yorker, or maybe the Atlantic, which would be pretty neat I suppose. But just because he lived doesn’t mean that I, too, will make that jump.

Last week, the second and third auctions of lakefront property on Geneva Lake occurred. The first such auction was held back in May, when a buyer paid the equivalent of $5.8MM, give or take, for a fine home on the North Shore. That auction worked, and so the sellers of two other lakefront homes went to auction with the same outfit, during the same season. One of the homes was a nice enough lakefront, with a shared pier and a shared driveway. The other a unit at Stone Manor.

The auctions were advertised as ABSOLUTE auctions, with NO RESERVE!!!! The auction house advertised the homes all over, and even the Wall Street Journal took the bait and featured the home. The auction for the Stone Manor condo was first, and that auction failed. I do not know the details, because you’d assume an ABSOLUTE AUCTION could never fail, but it did. The seller of this NO RESERVE AUCTION HIGHEST BIDDER WINS decided not to sell, after the bidding came in light. This is rumor, but unless we see the unit close in the next thirty days, we’ll assume the rumor was correct.

The other home did sell, and a buyer was whipped into a frenzy by the bidding process and paid what I presume to be an above market price for the home. The buyer may have been aware of the limitations of that particular home, or they may not have been. They likely figured the market context was close enough, and so they bought. They bought because ABSOLUTE AUCTION NO RESERVE is a very enticing concept. Never mind that for buyers the only two auctions this year will have been successful at what I believe to be above market prices. This is the equivalent of shopping the clearance section hoping for a deal, only to walk out of the store having paid full price for an item that was inadvertently placed on the sale rack.

For sellers, they’ll see this and assume that the process works, if indeed I’m right in my believe that both auctions from 2015 achieved the goal of getting a buyer to pay a bit over retail. But at what risk did they succeed? Where does the seller of the failed auction go now? Back to another auction? Or back to a traditional brokerage model, one that allows a seller flexibility in price and in structure? Yes, two out of three auctions this year worked. But that one guy also jumped from the Golden Gate Bridge and lived to tell about it.

Geneva Inn Expansion Plans

If you’ve been to the Geneva Inn lately, you know it could use a little tender loving care. Maybe that TLC comes in the form of a wrecking ball, or maybe in a simple coat of paint and some new carpet, but either way, it needs some attention. The building and grounds have aged rapidly over recent years, and if it is to remain some form of shining hillside retreat then some heavy maintenance must be completed, and soon. Service has declined, the food is just okay, and the demand for oak trim and green carpeting has plummeted.

There’s a big meeting tonight in the town of Linn. They’ll be discussing the obnoxious new fire boat, and the obnoxious little pier that the obnoxious boat is tied to. They’ll be talking about how foolish it is to allow volunteer firemen to drive around in that boat on weekends and shoot their little water cannon into the sky. They’ll talk about how gasoline does cost money, and how it makes no sense at all to allow a boat to burn up so much gas in the pursuit of lunacy.

Just kidding, they’ll be talking about the Geneva Inn, and the proposed plan that would require a rezoning of the two adjacent single family properties. The plan is not entirely clear to me, because it doesn’t need to be. The simple truth is that the owners of the Geneva Inn want to incorporate the two adjoining properties into their commercialized zoning. They already own these properties, and they’re now seeking permission to act on what has been their obvious plan all along.

A recent article in the Lake Geneva Regional News painted the community response to this proposal as mixed, with some in favor and some against. There are many signs out near the Geneva Inn, all denouncing the plan. There are flyers being circulated, in opposition. There are whispers and hushed tones, mostly against the expansion. The community, by my guess, is wildly opposed to this plan, and Linn Township will be keen to listen to their constituents.

I’m not sure yet where I fall in this debate. In general, I am opposed to all commercial developments on the lake. All and any. I don’t like most of the ones that already exist, and I’m certainly not in favor of creating any more properties that lend themselves to lakeside density. That said, I know something must be done with the Geneva Inn. I know they already own these adjacent lands, and I know that this has been their plan all along. This is not a surprise. There is a group that proclaims this expansion to be a violation of long standing deed restrictions, but every commercial project- condo or otherwise- has already broken this old timey restriction. Oh, and every association that came about only after the destruction of a lakefront estate has already done more damage to this ideal than any slight modification of an existing hotel ever could.

The question here is not what is in the best interests of the owners of the Geneva Inn. This entity is wildly wealthy and in no danger of running out of money. This is not a last ditch effort to save a family heirloom. This is simply a profit play, and while I will never begrudge a profit, I will find some error in the execution of this plan. The main piece of this proposed alteration is the addition of an outdoor wedding tent so the Geneva Inn can capture more of the highly lucrative Lake Geneva wedding industry. Neighbors decry the noise that will be generated from such a venue. Has anyone heard the tour boats at night as they churn through the dark waters with thumping sound systems that broadcast YMCA to every lakefront home?

There are wedding tents of this variety during the summer season at George Williams, Abbey Springs, The Lake Geneva Yacht Club, The Lake Geneva Country Club, The South Shore Club, and various private homes around the water. Weddings, whether we like it or not, are a major driver of this local economy. If the Geneva Inn needs to add a tent to make more money, and if the Geneva Inn, in conjunction with the addition decides to renovate and remodel their existing space, does this mean we will have sold our souls for their pursuit of money?

I don’t think so. But I also don’t think I’m in favor of the expansion. I think, as with most things, there are overblown concerns and there are unconsidered ramifications. I think in the balance there is a solution, and in this case, there will likely be posturing on both sides that will ultimately allow the Geneva Inn some increased presence on that section of lakefront. I don’t want the neighbors to be disturbed. I really don’t. I don’t want this lake commercialized more than it already has been. But I do want the existing properties to be well maintained and successful, and this appears to be the Geneva Inn’s time to attempt to become just that.

If you’d like to speak your mind, the Linn Township meeting is tonight, August 24th. Linn Township: 3728 Franklin Walsh St, Zenda, WI 53195
(262) 275-6300

Honey Bees

When you buy a lake house, you should be prepared to buy the things that need to fill that lake house. I’m not talking about couches, or end tables, beds or lamps, because those are optional. I’m talking about boats and tubes, skis and life jackets. I’m talking about front yard bocce ball and back yard volleyball nets. I’m talking about trampolines for the water and wake boards for the wakes. Just as I consider bread a vehicle for butter, a lake house is simply a vehicle for the accumulation of water based toys.

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You could accumulate these water toys if you live in the city. You could store them in your garage, or in your mechanical room, and you could go look at them from time to time. You could even put those toys into the back of your SUV and drive to some lake, where you could indulge those toys in their preferred habitat. But you wouldn’t do that, because that’s ridiculous, and we all know that lake things belong at the lake just as city things belong in the city.

When I moved to the country, I rather immediately found out that I would need country toys, and country things. I bought an ATV within days of buying the land. I bought a water tank for the back of that ATV, so I could water the flowers that I planted on that land. Then I bought a shotgun so I could shoot intruders and wild animals, but really just so I could shoot in the general, vague direction of thrown clay pigeons. I bought a tractor, a big green one with a bucket and a tiller on the back, and during the negotiations with the dealer I tried very hard to act the part. I stared at my shoes and spoke with a drawl, like Hillary at a Kentucky fundraiser.

Once I had the ATV, the shotgun, the John Deere, things seemed country complete. Then my wife wanted chickens, or perhaps another baby, so I bought her a new dog instead. He’s a fine dog, handsome even. But that wasn’t enough, because when you live in the country you have options available to you.

It is no secret that honey bees are dying. They’re dying for various reasons, depending on who you ask. The environmentalists would have you believe it’s the fault of Big-Ag. Big-Ag would have you believe it’s the hippies fault. People in the country think it’s the fault of people in the city, and people in the city think it’s the fault of the unsophisticates that reside in the country. The United States thinks it’s Mexico’s fault, and Mexico blames Arizona. There’s blame to go around, to be sure, but my wife decided that it was up to us to fix this bee dilemma.

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I was told this endeavor would cost around $500. I thought it was a nice idea, to single handedly solve this bee problem. After the first $500 was spent on some wooden boxes, there was another $500. Oh, you wanted bees, too? The bees arrived in a box, many, many thousands of them. They were dumped into the wooden boxes that my wife had since painted a pleasing light green, and then we waited to see if the bees would like their new home. We planted wildflowers everywhere, so many that I’m almost embarrassed to share with you this picture of the bounty. The bees were happy with their light green boxes, happy with their wildflowers, happy with the sunflowers that came after.

There was another $500 that needed to be spent, maybe for some gloves or a special crow bar, or maybe for a tin smoker. I tried to avoid involvement, as these were my wife’s bees, not mine. Once, I walked sort of close to the bee hives (we have two), and I was promptly stung. There are apparently two different sorts of bees in the two different hives. One sort is calm, the other is aggressive and antagonistic. One of the two filled their honey supers (expensive painted boxes that are stacked on top of the other expensive painted boxes), the other hasn’t really made much honey, which is likely the fault of Big-Ag.

Last week, my wife rented the devices necessary to extract honey from the boxes. I was not present for this, partly because I was working but mostly because I knew I shouldn’t be around for the process. When I returned that night, my wife was rightfully proud of her good work, but nearly every surface of the house was covered in honey. Some of the honey made it into glass jars, and that honey is now stacked proudly in my house. It’s good honey, minimally processed, pure, beautiful, delicious, sticky honey.

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Because you’re reading this, you have a very distinct opportunity. You can buy some of this honey. It’s $10 for a 16 ounce bottle. The cost per bottle is approximately $95, so you’re getting this honey at a rather impressive discount to actual cost. These bees were minimally handled, and we made sure that the flowers on our property were not treated with any chemicals or fertilizers. The end result is pure honey that came from very happy bees. The bees are happy because we only stole some of their honey, not all of it. My wife is happy because she has successfully navigated her first season as resident beekeeper. And I’m happy because my property is still chicken free.

Lake Geneva Venetian Fest

The Fontana fireworks are on the Fourth of July, or thereabouts. As they are the first real fireworks of the summer they capture much attention. Children are excited, but children are always excited around fireworks. Adults are excited, too, having waited through the long hard winter and the cold, wet spring to arrive at this celebratory time. My neighbors celebrate this weekend with booming fireworks, but this isn’t really any surprise at all since they celebrate every summer weekend with booming fireworks.

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Once the Fontana fireworks are exploded, there are other fireworks that follow. Some of the resorts light off fireworks around that same time. The Lake Geneva Country Club does the same. Later in July, perhaps in early August, Richard Driehaus throws his summer party and sets off his own private reserve for our public enjoyment. After that happens, Williams Bay waits until the last corn is consumed and the last brat grilled, and then they set fire to their assortment of exploding rockets.

The first firework display matters, because we’ve been waiting so long for it, but all of those middle displays are really unimportant. They’re just fireworks, after all, and though my neighbors have an unquenchable appetite for fireworks, most of us tire of them after some time, and the Driehaus fireworks might as well be the Williams Bay fireworks. But this weekend, our firework desire must be rekindled, because the fireworks this coming Sunday are the last such fireworks of the season.

That’s a fateful sentence, and I didn’t mean to write it this early in the summer. It’s just that this weekend is Venetian Fest in Lake Geneva, and the fireworks that will launch from the Lake Geneva beach (barges, really) represent the opposing bookend to the Fontana fireworks that set this whole thing in motion. I am too reasonable to suggest that the season is somehow over, because we know that summer will linger now for many, many weeks, but if the season is that of the firework, that season ends Sunday.

Venetian Fest isn’t something that I regularly attend. That’s because I prefer my summer enjoyment to take place on and in the water, not nearish the water. I also have a phobia of things involving tokens. Venetian Fest starts Thursday, or maybe Wednesday, but for sure Thursday, and it runs through the Sunday evening fireworks. Shooting fireworks on a Sunday night is not something that happens often, unless you’re my neighbor, because most of our resort towns understand that people need to head home Sunday night, in order to work on Monday morning. The City of Lake Geneva knows you can drive home on Monday morning, and they insist that you try it.

If you’re reading this and you already know about Venetian Fest, then that’s good. If you’re reading this and you’ve never heard of this small festival, you should come visit us this weekend. You should drive to town and enjoy the carnival, but only for a little while, until your tokens are used up. Then take a walk down the shore path, sit under the shade of a lakeside tree, take in the sights and listen to the sounds. That’s what a Lake Geneva weekend is all about, so don’t let the festival distract you from the real prize that is any summer weekend spent lakeside.

PS. The ILYA Regatta takes place on Geneva this Thursday through Sunday. This is a big deal for sailors, and it’s hosted this year by our very own Lake Geneva Yacht Club. If you want to watch the races, that’s perfect. Just don’t drive your boat too close to the sailboats and avoid being adrift in their route.

Lake Geneva Vacation Home Market Update

It is mostly true that for every home there is a buyer. There are buyers for the worst of homes. There are buyers for the best of homes. There are buyers for homes on highways and for homes that flooded a few years ago and will flood again in a few more. There are buyers for homes built on fault lines, there are buyers for homes on the sides of active volcanos. Most of these sorts of homes do not have any particular key attraction, but they sell anyway. The opposite sort of home is one that hits on so many levels of perfection that it has no choice but to sell. This sort of home sells because it must, because it’s too unique and too special to otherwise be ignored. This is why I sold my listing at 1606 West Main Street last Friday, and this is why the buyer who paid $940k for the gem of a house should be pleased with her purchase.

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This sale is just the latest on a laundry list of vacation home activity. The market is hot, and that really does apply to the broad Lake Geneva vacation home market right now, and not just a particular segment. The only possibly exception to that statement is the market segment that should be the hottest- the entry level lake access market. There are just three homes (per MLS) under contract priced below $400k at the moment. That’s odd, because interest rates are low and that segment should be the most sensitive to those rates. If you’re a buyer for something in that price range and you just read those sentences, consider this a nice reminder to act on your interest (call me before acting).

There are contracts pending in the $500-$700k range that include a cottage in the Lake Geneva Club, a fanciful house in Country Club Estates, and a modest ranch in Geneva Manor. There’s one other off water home pending sale in Knollwood, but that’s pending at $2.2MM so let’s not talk much about that. That’s an off-water home. Without a slip. But it’s beautiful and overbuilt, which will always attract attention. I have a contract pending on my listing in Abbey Springs ($765k), and there is a contract pending on a Fontana Shores condo listed at $349k. The lakefront condo market is still soft, but there should be some fall buyers that take advantage of that overall weakness. I still have a beautiful four bedroom condo at Vista Del Lago for sale, now reduced to $569k, and a two bedroom penthouse unit at the Fontana Club listed for $489k. Both of those condominiums had offers on them in the past few weeks, but neither deal came together. I’d love to sell those this year, and can promise a buyer that they will be finding value in either property.

While the gyrations of the broad vacation home market matter, the real spectacle right now is on the lakefront. The lakefront market is ripping, and though inventory is approaching all time highs, buyers are keeping up with the supply. There are no fewer than seven lakefront homes pending sale at the moment. That’s impressive, and though the only listing of mine on that list is the South Shore Club home on Forest Rest ($1.649MM), I like the activity anyway. There’s a listing in the Loch Vista Club pending with a $2.45MM ask. There’s home on Main Street in Lake Geneva pending at a $2.175MM ask. The good news about that listing is that I have a better home for sale right next door, and mine is listed at $2.375MM, so it should be deserving of your attention. A listing on Birch Walnut in Williams Bay that first came to market at a laughable $3.5MM ask is now down to $2.499MM and recently received an acceptable offer. There’s an entry level lakefront in Geneva Manor listed at $1.75MM with a new contract as well.

The small, curious listing on Outing in Williams Bay is under contract at a high $800k ask. This will look cheap to the market when it prints in the $800k range, but it’s a market price that makes complete sense. Yes, it’s lakefront in the 800s, which is good, but that’s all this house was worth. There are some big contracts pending on a listing in Fontana in the low $5s, and another fresh contract on a Basswood listing just under $5MM. This is significant activity, and I see in the current inventory at least 7 or 8 more lakefront deals that will be printed yet in 2015. If the pending contracts all close, and if my prediction for additional deals ends up being accurate (which it will), we’ll add 14 or so closings to the 12 deals that have already closed in 2015, making this year a record year in terms of volume. That’s a good thing, but it’s also leading some buyers to falsely believe there’s some bubble forming.

It is true that I don’t love every deal that closes. Some are bad deals. Some are overpriced. Some just make me sad. But most of these deals make sense, and the pricing is still largely under 2008 peak valuations. The best way to avoid purchasing a bubbly home in this market is to work with me. I don’t let my buyers purchase outliers, and we’ll be sure to make smart market decisions even in a hyper market. Remember the post from last week about the reductions, because while this activity is impressive, the sellers who aren’t receiving contracts are going to do everything they can to get the attention of the fall buyers. If this were Beverly Hills we’d be throwing champaign open houses with red carpets that we rented from the flooring store in town. But this is Lake Geneva, and we’re not that gullible, so we’ll just reduce our prices to attract interest, and if you’re a buyer on the hunt, I’m the best guide you could hire.

Above, my listing on Constance. It’s really a great house.

Toys

Before that day I had never known of the word: Revo. I had heard of other words and brands, like the normal ones that you hear when you’re a kid growing up in Williams Bay, but never before that day had I known what a Revo was. Spending all of my life wandering in the Revo wilderness, I had come to the place where my introduction would be made. It was Stone Manor, and the owner of that glitzy condo on that middle floor was wearing his Revo sunglasses inside, during the day, like a rebel. He had at least one giant diamond earring as well, but that wasn’t what I took away that day. That day, it was all about those black matte framed sunglasses and those mirrored lenses. Revo.

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I couldn’t buy that condominium, not then and not now, nor could I buy that giant diamond earring, nor would I, not then and certainly not now. But I could buy those sunglasses. And buy them I did, nearly immediately after my first encounter with them. The year must have been 1999. I wore those sunglasses for quite some time, and the first picture that my wife ever took of me (the first one that I was aware of, that is), I was wearing a blue shirt that I still wear today and those matt black Revos.

This trend continued after those glasses were bought, and it always presented in the same way. I’d see something that I liked, something that someone who had means would own, and I’d buy the bits of it that I could afford. A few years ago, I was checking on a client’s house and noticed a shiny new axe in his foyer. It was a handsome axe, big and hefty, tall and proud. I couldn’t buy that house, or the furniture inside of it, but within a few days I owned an axe just like that one. And I split wood with it in the winter time and I think about how happy I am to have such a pleasing axe.

I visited a friend’s house last summer and he had on display a most beautiful, brand new computer. It was a Mac with a screen larger than that of my first purchased television, which, as a way of mentioning, was a Sharp Aquos that I bought from another customer because I saw it and thought that I should also have it. That Mac was brilliant, and I struggled with the notion of becoming a pure Apple person. I had long resisted the iPhone, opting for the clunky comfort of my Blackberry. Then, I resisted the urge to buy the iPad, because that was simply a bigger iPhone that lacked the ability to make phone calls. Now, I was resisting the Mac, because what is a Mac if not a giant iPhone on a stand? Later that week, I, too, owned a great big Mac, and as I type on it now I feel good about the purchase.

When I was 19, I owned a jetski. It was a Kawasaki 550, and I liked it quite a lot. After some time of this machine, I bought another, a 650 this time, and I zipped and zoomed around the lake with my two stroke toy. After some time of this, the phenomenon dulled, and for a few years I didn’t even bother with that jetski. One summer, many summers after I had first ignored the machine, I took it to a mechanic to repair it. I needed to ride it again, to feel the waves and the water, and so I dropped it off and asked that it be made whole. A couple of weeks later I picked it up, paid the $1100 tab, and raced to the lake.

In short order it was obvious that the repairs were not correct, or at least they weren’t the right repairs. The ski didn’t work then any better than it had years before, and so in haste I gave it away to a friend, and told him I didn’t want to see it again. This was at least 10 years ago. A few years after I parted ways with the Kawasaki, my back gave out and I had decided that my jetskiing days, like my Revo days, were over.

Last week, a friend who is also a client asked me to come over to help him with the launching of two new waverunners. Waverunners bore me, but I was willing to help. When I pulled into his driveway I was met with a new trailer and two new toys. One was indeed a waverunner, big and fat and boring. But the other wasn’t waverunner at all, it was a brand new Yamaha Superjet. It was the jetski of my youth, and at that moment, before we launched it and before I fired up that smokey two stroke, and before I ever rode on it, the decision had been made. I needed to have one.

It took a while to get my head around such a superfluous purchase. It took longer to convince my wife that it was an acceptable purchase. That last part is still a work in progress and will likely always be a source of contention. Grown men look stupid on jetskis, she said. How will we buy groceries this month, she added. Where will you keep it? If only one person can ride it, how is this not a ridiculously selfish purchase? These are the unimportant questions that could only be asked by someone who has not tasted the unique brand of freedom that only a Japanese made jetski can offer.

Now, if only I could find my old sunglasses I’d really be on to something.

August Market Update

This time of year things should be forced to slow down. The sun has been shining for weeks on end, and the water is clear and warm, but not too warm. We should be swimming and playing, boating and sailing. We should savor these days. But we don’t. We don’t because that’s just not how we’re wired. If we did try to savor these days, the result would be a frantic race from one savoring to another. We’d rush through leisure so that we might fit them all in, and in doing so, we’d ruin the whole thing. This is our curse.

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While the summer is in full swing and fall is just a troubling thought that lurks in the back of our minds, the market has turned its eyes towards fall. While summer is apparent and obvious, there is fall in the crunch of freshly fallen leaves, in the advertisements on television, in the school items at the ends of the shopping aisles, in the promise of an arriving football season. While we bask under this summer sun and we swim through these refreshing waves, fall is closer now than it has ever been before.

The market knows this, and the market has begun its preparation for this fall market. Buyers ask me often if the fall or winter is the best time to buy. They wonder if they should wait out this sun and warmth, and buy when the leaves litter the ground and the wind blows from the north. I tell them that it is possible to get a great deal in the fall, but that the Geneva market thrives or withers based on inventory, not on seasons. If you wish to land a terrific deal in the fall, you must be willing to chew off aged inventory, opting to swoop in and relieve a lethargic seller of his aged offering. This is optimal for securing value, but it’s not as sexy as finding a fresh deal and stealing it before the market had a chance to react.

That’s why if you’re a buyer in a particular market that’s full of inventory, you’d do well to avoid the trap of seasonal thinking. If a particular piece of inventory is to your liking, you have two options. You can lie in the weeds and seize the opportunity when the snow first starts to fly, or you can seize the opportunity now. If you wait until this year is older, might you secure a better value, on a percentage basis? Possibly. If there’s another buyer that thinks that particular property is worth more than you do and they buy it in August, then you’re lying in the weeds just for fun, and at some point that’s a bit creepy.

The market has begun to reduce properties in anticipation of securing a fall buyer, and there is perhaps no greater example of this than my listing on Bonnie Brae. That house was listed some time ago by another broker for nearly $5MM. I listed it this spring for $3.399MM, and then I dropped the price to $2.99MM yesterday. This is a reduction that matters, and this is a seller looking to capture a fall buyer. As with my earlier example, if you like this house and you’re waiting to buy it in November, that’s super cool. But there are three showings there this week, which means some buyer might be close to foiling your plan.

There is new inventory coming to market on the lakefront, and some of it is very, very high quality. There are some new offerings in the $2MMs, and some in the $4MMs. There are large numbers of buyers in the market right now, and many of those are move up buyers- those who already have a vacation home here but are looking to upgrade their position in the market. These buyers are wonderful, as their buy side creates liquidity that’s immediately followed with new inventory (their old house). Geneva thrives on this sort of property exchange, and this behavior is on full display right now. As of this morning, there are at least four lakefront homes under contract, and many more offers being negotiated.

All segments of the Lake Geneva vacation home market are impressively active. There are buyers seeking homes with slips, those priced in the $450k to $850k price range, but that market has been increasingly low on inventory this summer. There are buyers looking for entry level lakefront, with showings galore in this price segment. That said, this entry level market is still full of inventory, and I’m expecting several of these aged offerings will be picked off by opportunistic buyers over the next 30 days. On an average weekend, I’m having showings on several of my lakefront listings, and a day like today finds me at three lakefront showings at two different houses. Yesterday I had two lakefront showings at two different houses, and tomorrow I have a showing at a new listing that’s not even on the market yet.

This is the schedule of a vacation home seller, and yet for all the activity and all the papers being shuffled, there must be time to enjoy this month. That’s why I’ll work today and tonight, as that sun sets, I’ll find a moment to watch it. To marvel at it. To know that the next day will bring more of the same, and this is the sort of same I love.

Above, Bonnie Brae with 2.72 acres and 102′ of level frontage. Just reduced $400k to $2.99MM.

The Rusty Cars

The car was rusted. I swear to you as sure as today is Monday the car was rusted. It was new, on the lot, positioned next to the other cars and this one was rusted. Down the aisles, near the rusted car, it was soon apparent that the other cars were also rusted. Some worse than others, but rusted. The dealer had the cars under lights, different lights at different angles, each aiming to present the highlighted car in its best possible light. If one car had a very nice front grill, there was a light shining brightly right on it. If a car had a huge dent in the driver side fender, that side was made to face away from the people, away from the street and away from the light.

The lot went on and on; it was a big lot. On this Saturday, there were people everywhere. The people looked at the cars closely, but never too closely. One family of four saw the car with the pretty grill and stood in front of it, focusing on the light and the dazzling chrome that sparkled like so many diamonds. The salesman saw this interest, and before I could watch more closely on the conversation, the deal was done. The hands were shook. The family loaded into their new car and eased toward the roadway, content with their shiny grill. As they pulled from the lot, the back bumper came into view, or more accurately stated, the area where the back bumper should have been came into view. They drove down the road, oblivious.

I thought this was odd, that someone would spend some money to get from A to B without finding concern in how that trip made them feel. I looked at the crowd mulling through that lot, focusing on the shiny bits that were lit and waxed, I watched the salesman talk about miles per gallon. In the distance, I saw one car with lights on all sides, wax on every piece of exterior, chrome on all of the edges that should have been chrome. This car was beautiful, and everyone knew it. Some thought it was too beautiful, too shiny, too waxed and too bright. Most took a walk by it, and many marveled at it, but just as they’d pause and gawk they’d keep walking down the lines, towards that car on the end, the one with the beautifully curved windshield and the dented passenger door.

I thought it odd that so much attention was being paid to such compromised cars. I thought that maybe, just maybe, it was because the cars with the dents and the mud were cheap, and the one with the perfect everything was just too expensive. I thought maybe the crowd that had gathered simply lacked the financial willpower to purchase the shiny one, which is why they were more attracted to the other ones. It wasn’t that they didn’t like the shiny one, maybe they just didn’t want to afford it, or maybe they couldn’t afford it. I watched and guessed, and thought that this must be the reason that the other cars were selling while the beautiful one sat.

One couple pulled up in a car that was as shiny and beautiful as the one that sat at the aisle end, positioned so that all sides were on display. The couple walked directly through the litter of dingy cars directly to that car that so closely resembled theirs. They knew what they were looking for, and as they walked to it I leaned in to listen, to watch, to observe. They walked around the car, admiring each side and angle, complimenting the designer, wishing that they had known of it sooner. They touched the graceful curves, and when the salesman opened the engine compartment they just shook their heads in awe. I saw in the salesman’s eyes the shimmering excitement of an imminent sale.

Just as the couple was about to shake hands on the deal, the wife noticed the car next to the perfect one, she was undoubtedly drawn to it by the fiberoptic lighting that washed reds and then blues and whites against the fine trunk area of this car. It was memorizing, I had to agree. She told her husband that they should at least consider the car with the sharply painted, smartly polished trunk and rear bumper. The husband turned from the perfect car to consider the other, and he asked the price difference between the two. For that sort of savings he could buy the car with the nice trunk and also go on vacation that winter, to those islands that they so like that are so very far away.

They hemmed and they hawed, and I watched the salesman’s eyes turn dim. They decided to buy the other car, the imperfect car, and once the deal was done and they rolled from the lot, I heard the brakes squeak through the next several lights. They had saved money, all right, and subjected themselves to the squeak that may or may not be fixed. The rust that had been hidden from view in the lot was covering the front bumper, and was slowly expanding its reach to include the two front fenders. The car would get them from A to B, the husband said, and he was right.

If A to B is all that matters, rusty cars find their buyers. If A to B is the goal, a dent in the fender is fine, and it will not get in your way. If you simply wish to spend your Saturday jumping from some boat into some water for the purpose of getting wet. Any old lake will do.

Williams Bay Corn and Brat

Busy Friday for this guy, which means you get a reminder of the Williams Bay Corn and Brat Roast and nothing else. It’s this weekend, and you should come visit. Saturday night (8/8) is capped off by fireworks over Williams Bay, viewable from town or from boat. It’ll be fun, and corn is good. So are brats. Please come up for the festivities. Williams Bay, and the Lions Club, or maybe the Rotary, but possibly the Young Jaycees, thanks you.

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Upper Bracket Geneva Lakefront Update

If I spent every breath telling you that the lakefront market is hot, would you always believe me? If, when things were really bad, I told you that things were really good, would I lose credibility? If when we were standing under a bright sunny sky, I told you it was cloudy, but I told you that with such nervous enthusiasm that you, too, thought it was cloudy, would I have been right? I’m asking because it’s difficult for me to understand buyer behavior sometimes, and I’m curious as to how certain buyers believe certain agents when the certain refrain is always the same.

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I think a steady refrain that seeks to identify market conditions as always being the same is nothing more than an insult to your intelligence. More than that, it’s an insult to my intelligence, which I value quite highly. That’s why I’ll tell you when the market is bad, when a segment is bad, and I’ll tell you when a segment is good. Today, there are good segments, just as there are bad segments. I’ve been telling you the entry level lakefront market is currently a poorly performing segment, and yet the advice has fallen on mostly deaf ears. Today, there’s another segment that’s heating up, and it’s not the one you’d expect.

Historically, the Geneva lakefront market prints one sale over $5MM every year. This has not always been true, of course, due to the inflationary demands of real estate pricing, but it’s generally true. There was one sale over $5MM this year, that of a house off Snake Road. That sale was really a trade, and you’d likely be wrong if you assumed that home would have sold to the open market in lieu of the trade deal. That property sold for a reasonable number, but it neither helped a market argument or hurt one, it was just a sale of a house on Snake Road.

There’s a fresh new contract on a lakefront home over $5MM, though the number is not known, and neither is the list price. It’s an off-market property that will soon come to market, with that little yellow C indicating there is a pending contract. It’ll come to market because no agent in the history of the world would ever keep a sale in that strata quiet. It’ll be broadcast for everyone to see, and it’ll be touted as a great success, which it is. Assuming this sale prints in 2015, that will be two Geneva lakefront closings over $5MM in the same calendar year, which is the first time that’s happened since the advent of time.

To add some weight to this discussion, I’m expecting we’ll print an additional two sales over $5MM this year, leaving us with four transactions in 2015 that exceed that benchmark. This is a bold prediction, and it may very well be wrong, but I see more buyers in that $5MM range now than I’ve seen in forever, and I think there will be some new inventory that sells and maybe one of the existing inventory that sells (1014 South Lakeshore, duh).

I’ve often wondered, both privately and here on these pages, if the market can easily sustain an active $5-8MM lakefront segment. If the newer homes, those built in the last decade, come to market with prices that reflect the owner’s all-in-number, will they attract buyers? Even though the lakefront has never shown a particular ability to absorb properties in that price range, I think there is a market in that range just waiting to be tapped. If new builds seek to obtain $9MM+, as several current offerings are attempting, that segment will likely never catch on with any consistency. For every ten buyers that will spend $5MM, is there one that will spend $10MM? Note the absence of the word “can”.

Just as the entry level market lags, the upper bracket will experience a terrific 2015. The mid-market, those homes priced $2MM to $4MM is also active, with two lakefronts pending in that segment and one off-water outlier pending in the low $2s. If you’re a buyer in the $5MM+ range, perhaps you’d be wise to work with the only agent with a pattern of success in this segment. Since 2000, there have been four lakefront sales over $5MM, and I’ve brokered two of them. Let’s find value together, whether that value is found by stealing a $1.2MM lakefront that should be $1.4MM, or by securing a $5MM house that couldn’t be replicated for the purchase price.

Above, 1014 South Lakeshore’s remarkable bunk room.

Dinner Time

The guests had been treated to four straight days of sameness. Blue skies in the morning, blue skies in the afternoon, and blue skies into the evening. A sparkling sunset to the West, just as a bold moon would rise in the East. The sun was hot, but the umbrella shade and the breeze took care of any excess. These days were all the same, and they were leisurely and full. It shouldn’t have been such a big deal to replace that scenery for just a few hours.

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I’ve found that I don’t like to cook for my family anymore. My wife eats some, sure, but more out of duty to remain alive than because she likes the way a particular food item tastes. My kids eat anything, so it isn’t much congratulation to make something that they eat and declare to be good. This is why I don’t like cooking for them anymore. While my desire to cook has waned some in recent years, I still enjoy the process and the outcome.

I wouldn’t have suggested cooking at my house on day one of the visit. My aunt and my uncle and my cousin wouldn’t have been up for such an initial abstention from the lake, and that’s why I waited for those first few days. I let them bake under the summer sun, and swim from the pier. I let them lounge under those umbrellas and boat over those waters. Had the days been iffy and the intended cooking day been delightful, I would have pulled the plug at the last minute, preferring that they soak under a rare sun rather than sit at my house at subject themselves to my dinner plan. But the days were all the same, all bright and blue, and by Sunday evening I figured enough had been enough.

My cousin appreciates the cooking process in the same way that I do, and so we had made a plan to cook dinner on Sunday evening. The family, both mine and the extended, soaked under sun and swam the day away. Because I dislike cooking in my parents’ home, and much prefer the company of my own pots and pans, my own knives and my own grill, I suggested that the cooking and the dining should take place at my house. When I suggested this it was around noon. There would be five hours left at the lake, so the out-of-towners could bask and gobble up that view and float in those waters. I figured that would be enough.

My house is quite delightful. It’s not extra fancy, because I’m in real estate, but it’s nice and new-ish and the flowers are in bloom and the grass mowed in alternating lines, dark and light. My air conditioning is cold and thorough. My parents house is old, and the air conditioning either doesn’t work or my father still won’t let it work, and there’s a musty smell that wafts up from the basement. I only asked that they trade that house for mine for a couple of hours, maybe two and a half, tops. It shouldn’t have been such a big deal, but my house is in the country, surrounded by flowers and trees and that striped lawn. My parents’ house is on that lake, with a lakeside porch and pier-kept boats and chairs of varying makes and models littering the pier.

When I suggested that the dinner be at my house, it didn’t go over well. Why would we go there? How far away is it? Will we be safe there? What if we just went to buy groceries and cooked them down here, at the lake, in that musty house up there? Confusion was everywhere. I didn’t think it would matter, because of the long days that preceded that one, those days where the sun and the pier and the boats and the water were everything. Wouldn’t a break be nice? Doesn’t anyone want to see my sunflowers?

In the end, I had my way, but the dissent was noticeable. My older brother, the one who turns 40 this week, refused to make the difficult five minute drive from the lake to my house. Everyone who did come was disoriented, wondering where the lake was and why I’d live out here. Having eaten dinner, everyone who did come left in a hurry, returning quickly to the lake and the pier, so they might purify themselves in those waters. In the end, they obliged me and my house, but to say they would have preferred leftovers lakeside than fresh fare farmside is to state the obvious. Sure my house is nice, but it isn’t on the lake.

Weekend Buyers

It’s widely understood that the purchase of real estate is typically the most important purchase someone will make in their lifetime. This understanding does not hold up if you’re supremely wealthy and you buy businesses for tens or hundreds of millions, and it doesn’t hold up if you buy commercial buildings of epic scale for a living. But if you’re a normal person living a normal life, the purchase of a home, be it a vacation home or a primary home, is likely the largest single purchase you’re ever going to make. Everyone knows that.

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With that firm notion established, it would make complete sense to approach the decision with a special variety of tact. The decision would be made after some many hours of education about the product you’re seeking, but only after you, as the buyer, thought out the ramifications of the purchase on your finances. Further, given the extremely subjective nature of real estate pricing, and the inconsistencies of valuations in each market, it would make sense to partner with someone capable of strategic guidance.

In this way, a real estate transaction would unfold like this. Buyer thinks about a vacation home. Buyer would like a vacation home, very much. Then buyer works on buyer’s finances, making sure they can afford such a purchase and making sure that the purchase of this new thing will not render their finances fatally impaired. Once the finances are in place, the search for a market can begin. Lake Geneva, being the only vacation home market worth exploring, easily secured the nod. The buyer is able, the market is defined, now the next step begins.

Representation is important, and our buyer friend knows this. So the buyer asks people for recommendations. The names returned to him are varied. Research begins, online at first, which is how it must begin. There is a process of elimination, then a process of interviewing, via phone or email, whichever is the more convenient for our buyer. Then there is the gathering of facts, of sales histories and of anecdotal testimonies. Then, after these steps are completed, there is a choice. The buyer will meet the agent next Sunday for a tour, and if all goes well, this will be the relationship that culminates with the vacation home purchase that this buyer has dreamt of.

But this isn’t at all what a typical vacation home purchase looks like. A few weekends ago, a buyer called me to see condominiums. Like, immediately, condominiums. They were interested, they said, and so they wanted to see those condominiums, ASAP! It was a Sunday, the one that fell after July 4th, and I was both busy with some work and busy with my personal pursuit of leisure, the sort of pursuit that even I, as a lowly Realtor, is actually entitled to. I responded to this buyer, told them of the available inventory, and told them that I could not show them property. I also asked if they were ready to buy, if they had talked with a lender or if the purchase would be cash. After many back and forth emails, they told me that they would no longer require my assistance. Thank God.

Then again, last weekend, a buyer calls on a property. They had to see it. They needed to see it. They must! And so I told them that I couldn’t show the property because it was occupied, and I would need some notice. So a few minutes later, another agent called me to show the same property. The buyer? The same one that had asked me about it barely 20 minutes prior. This agent was told that the showing wasn’t available, but that the buyer could come during the week to see the property. They came to see it, decided against it, and that was that.

The frantic behavior of buyers in a summer market is really rather disingenuous. There is some unnatural rush to see things, to see anything, to spend time with a Realtor in his car. While I recognize that this is a requirement of this vocation, the buyer who behaves this way is not only wasting the time of the Realtor, but she’s wasting her own time as well. Worse yet than wasting time, there is a stronger likelihood of a market mistake being made if the process is undertaken out of order and in extreme haste. Having done this for 19 years, I understand the allure of this lake. I understand how sunshine and 83 degrees makes the buying decision easier. But I also understand that the best decisions are not made on a Sunday morning after thinking about a vacation home on Saturday night.

As a full time, all the time Realtor, I am always willing to entertain last minute requests. In fact, without them, I wouldn’t have much of a business. That’s why this admonition is not just aimed at helping the hectic weekend schedules of Realtors like me, it’s also aimed at protecting the purchase decisions of buyers. Thoughtful, well considered decisions are the best decisions, and when there’s a rush to look at some real estate because the sun is shining and it seems like a nice way to spend an afternoon, I know that’s not going to produce a quality purchase decision. Beyond even that, if you’re looking for a Realtor— any Realtor— who is able to rush out and show you a property, do you suppose that’s the best Realtor for the job?

Entry Level Lakefront Market Update

The one thing that you can be sure of is that if the market has an abundance of something no one will want it. If there is a car lot in Sometown, Wisconsin that has 39 red sedans for sale and just one white sedan, the buying masses will clamor for another white sedan. In fact, they’ll say that they’d buy a white sedan for more money than they’d pay for the red sedan, if only the dealer had a white one to sell. In the same way, in Anothertown, Illinois, if a dealer has 39 white cars and just one red car, the clamoring will be over red. Red, red, red. Everyone wants red. Except in the Wisconsin town, they hate red.

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This is true in real estate as well, which is why today there are 10 lakefront homes on Geneva offered for sale under $1.5MM and no one seems to care. The offerings in this price range represent quality properties at very fair prices, and yet all the market does is clamor for more inventory in the $2.5-$5MM range. If only we had a nice, new home on a nice, wide lot, and if only we had that property come to market in the $4MM range. Then the market would be excited, and willing buyers would rush with fistfuls of dollars. They’d do this because they’ve been wanting it for quite some time and they’ve gone unsatisfied.

And yet there it is, the humble entry level market. The market that offers buyers the lakefront life, where value is not determined by the make of your range but by the width of your lakefront lawn. Entry level lakefront homes are generally limited, either by parking or by size, and often by finishes, but to sit on a white pier that’s all your own is a bit of magic. I’m assuming you’ve learned your lesson and you’re not going to be buying a lakefront house with a shared pier anytime soon. There have been plenty of those mistakes this year to last at least a decade.

No, the entry level lakefront will rarely leave your fancy city or suburban neighbors particularly stunned when they pull in the drive. There won’t be a ton of parking. There won’t be giant plastered pillars that impress those who are easily impressed by ridiculous things like giant plastered pillars. There won’t be long driveways lined with stone and filled with crushed imported granite. There won’t be garages for all of your guests’ cars. There won’t be any of that, so on the surface, your lake house will look humble and simple, unassuming and unimpressive.

But give those guests a weekend stay there, and they’ll leave knowing how privileged that weekend just was. That’s because a small lakefront vacation home beats a large off-water vacation home any day of the week. There is value here as well, as printing a lakefront home at a discount is always nice, but it’s especially nice when a $1.5MM lakefront home sells for $1.175MM. It’s even nicer when money is still cheap and appraisers- even the most rogue among us- will have no trouble justifying the obvious value. This is the golden age of the entry level market, and if you’re a capable buyer and you haven’t taken notice, please smarten up.

So far this year we’ve closed two entry level lakefronts under $1.5MM. Those being the copper top on Lakeview for $1.473MM and my sale on Shadow Lane for $1.4MM. Last year at this time we had closed just one entry level lakefront, that of a $1.4MM sale in the Birches (that was swiftly demolished). 2013 was a busy year for the entry level market, with 6 lakefronts in this segment closed before July 30th of that year. In 2012 there were 3 sales of that entry level nature. This year we’re not far off of that average pace, but the difference this year versus those years is that we have this glut of inventory, and that inventory is the reason opportunistic move-up buyers have a most rare opportunity.

If you need help seizing this opportunity, I’m your guy.

Above, the living room of my listing on Lakeview. $1.485MM. Boathouse with kitchen and bath. Private H-slip pier. Not shared…

A Lake Geneva Weekend

There are reasons that people choose to vacation where they do. Some choose to vacation where they have family. Others choose to vacation where they have no family. Both are understandable. In the same way, some choose to vacation where there are lots of things to do, while others seek out an absence of activities. One of the things that Geneva excels at, among so many others that I simply don’t have the time to articulate them all, is the ability to offer both sorts of vacationers their ideal vacation. Every week and every weekend this is the case, where some can find nothing but activity while at the same time others can find only a comfortable wicker chair in a quiet lakeside porch, but this weekend now past offered up the most glaring display of the remarkable difference between here and everywhere else.

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Last week and into the weekend the Country Thunder music festival happened just a few miles East of Lake Geneva. That event draws the biggest names in country music, Dierks Bentley, Luke Bryan, Tyler Farr and Blake Shelton, to name a few. While that was going on each night since last Thursday, Dave Mathews and his band came to Alpine Valley, that winter ski hill/summer music venue just a handful of miles to the Northeast of Lake Geneva. While Dave Mathews was making odd faces and singing, Blake Shelton was talking about anything but his newest ex-wife, and Martin Short was presumably making jokes at the Driehaus lakefront party. This isn’t a party that this local kid gets invited to, but rather it’s a who’s who of Chicago business elite that obtain the invite. After the dinner and entertainment, a private firework display launched from barges in front of the estate were a most public delight. This was Saturday night.

But Saturday during the day there were other things not to be missed. Williams Bay had their annual Art In The Park, which is exactly like it sounds. Part art, part park, you get the idea. Fontana hosted their annual Lobster Boil and Steak Fry, which benefits either the Lions Club, or the Jaycee’s, or the fire department, I can’t be sure. All the while it just so happened to be 83 and sunny, with a few white puffy clouds dotting the horizon but seemingly never interrupting the sunshine. With the various musical acts singing, the artist displaying their wares, the lobsters being boiled, Martin Short being Martin Short, and everything else that created activity if you wished to find it, I was just sitting on a pier, watching my kids swim. It was a private oasis in the midst of a summery throng.

Thursday morning Lake Geneva has a rather impressive farmer’s market downtown in front of the Horticultural Hall. That’s a tough schedule for pure weekend warriors, so Fontana has a Saturday market, downtown on the lawn in front of the Coffee Mill. But these are secondary to Pearce’s Corn Stand, on the corner of Highway 67 and County F, which opened last Thursday and will now be open every weekend through late fall. One weekend, all of these things, options for everyone who wished to be amongst a crowd, and options for anyone who wished for the solitude of their own shady lakefront lawn.

Not to be outdone, Harbor Country, Michigan also had plenty of things to do. For instance, there was a Black Ash Basket Making Class last weekend. If you missed that, you could catch the Cake Decorating Class, but that was only on Sunday morning. The Van Dyke Revue played somewhere on one of the nights, and this cover band from Niles, Michigan may be willing to cover a Dave Matthew’s song, if you ask nicely. I won’t go on and on about the differences between the two vacation home destinations, because these differences are so black and white that it’s unfair to try to contrast the two. A summer weekend in Lake Geneva can give you everything you want, no matter if fun is found in a stadium full of people, or at the end of a white pier surrounded by deep blue water.

The image above, snapped by yours truly, midday Saturday afternoon. For all of the “Geneva is too crowded” people to ponder.

Blues

The weather, they said, was delightful. On a Monday it was sunny, with skies so blue it was difficult, after some time of gazing, to imagine what they might look like in any different shade. On Tuesday, the sun was bright, so bright that people wondered if something had gone wrong. Should it be this bright? On Wednesday, the sky was blue and the sun was bright, which was what they expected. Thursday the same and on Friday, somehow things were bluer and brighter.

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The next week was the same, and the week that followed. They say that out there it’s like that, just sunny and blue, or blue and sunny. In the winter it snows, but it snows only at night, so that the blue skies aren’t interrupted. Children grow to be quite old before they learn what clouds are, and even then they’re uncertain what Cloud Cover means. Cloudy skies are for storybooks and movie screens, not for their out of doors. In the winter it is blue and in the summer it is blue. It’s blue in the spring and blue in the fall, and no one wonders anymore why, they just know it is.

I see this sky today and I see it blue. I see the sun that’s bright and full. I see the water that’s painted with the same brush as the sky, the only thing separating one from the other being a tenuous line of deep green trees. Sometimes, I see a cloud float by. For a while there are many, then few, then, later into the afternoon when the evening sets in, I see none at all. The sun fades away, slowly, teasingly, and we go to bed in the dark unsure of what the next day will bring.

Will it be sunny and blue? Will the clouds puff and dot the sky, or will the build and twist and darken? Will there be wind today, or will the lake rest again, for what might be the third day, or the fourth day in a row? It couldn’t be the fifth day, because even children know the wind here cannot rest for that long. Will the sun return, to warm my skin and to dry my lawn, or will the next morning bring with it those clouds, thin and high, whitewashing the sky and paling the water to silver?

I do not know what it will do, which is why today I must savor what it is doing. These skies are blue now, but they won’t be forever. Forever might be a few days, or it might be just the morning hours, or it might be, as I see sometimes, an hour in the morning followed by an interval in the evening, and solid clouds in between. On these days when the sun shines and the sky stuns blue, I know I need to pay attention.

They say that we should move to where the skies are always blue, and the sun always bright. They say it’s better there. They say that it’s too cloudy here, or too cold, or the summer is too short and too hot, but sometimes too cold and too wet. They say that this place isn’t as good as that place. I say they’re wrong. I want to live where the right days aren’t something I count on. I want to live without expecting, and when I see a blue sky and a bright sun I want to drop the cloudy day things and rush do something that matters, to do something that I cannot do when the blues are gray and the sun has lost its way. Without so many clouds, these days couldn’t mean so much.

Vegemite

A long time ago, I frequented a chiropractor who hailed from Australia. He was a good chiropractor, as far as that goes. Looking back, I’m not so sure that he was Australian, and maybe instead it was his wife who hailed from down there. They may have met at chiropractic school, that one in some heartland state where every chiropractor goes. Or they may have met somewhere else, I can’t be certain now. But I am certain that one time I was at their house, because later, after the chiropractic part of our relationship was over, I sold their Lake Geneva home for them. It was at their house that I first tried Vegemite.

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Even then, I’m not sure if I tried it, or if I merely smelled it, because to do the latter would be enough to deter the prior. I watched as his children greedily ate the brown paste on their morning toast, and I thought to myself that I had entered some sort of parallel universe, where what was wrong is now right, and where what is awful was somehow not. I thought about the small clicking device that he would place against my shoed feet and click it, thinking that I was being cured of a fundamental spine issue, and I thought that if that was indeed the accepted sorcery, then perhaps it made sense why vegemite was the preferred breakfast smear.

I didn’t need to have that experience with Vegemite to know that I didn’t like it. I didn’t need to be presented with a slice of toast, smeared with that brown semi-solid in order to judge it and dismiss it. A yeast extract, dark brown in color, with the consistency of gritty, stiff molasses? With that I know that it’s not for me, whether or not I had seen it in person and smelled it with my own nose, held it in my own shaking hands.

This is why when I found myself at another area lake last week, showing homes there because not enough of you are calling me to see homes here, I didn’t really need to walk down the pier to understand what the water was all about. I could see it from the house, from up the lawn and through the trees. I could see water that wasn’t the color of the water I prefer, and I knew that I would need to bite my tongue and pretend that the water was water, and because it was water then that would be enough. Also, I cannot bite my tongue.

Another lake was on the tour, and this lake was well known in this area, having boasted several expensive home sales over the years. The lake had nicer water, not as soupy as the other lake, but still not like the water I know here. I walked to the end of the pier, wobbling over that metal-posted structure of questionable stability, and when I got there, I looked down at the water, and at the bottom of the lake. The distance from the top of the dock, (this sort of structure should not be called a pier, and I apologize for my earlier mistake), to the top of the water was perhaps one foot. The distance from the top of the water to the top of the lake floor was perhaps another two feet. Had I ran down that pier, assuming it wouldn’t break apart like an old rope bridge in an old-timey Saturday morning cartoon, I could dive off the end and still have at least the lower half of my body sticking out of the water. This is unacceptable.

I drove around that lake, and the other, and I found myself repeating the same tired refrain, the one that agents from those lakes must find themselves repeating just as often. It’s close to Lake Geneva, I’d say. This was all I could come up with when searching for superlatives, and I am no stranger to exaggeration. This would be like offering someone a steaming slice of Vegemite toast and telling them that it’s sort of like strawberry jam. Yes, both are spread on toast, but one makes you happy and the other makes you question everything you’ve ever known.

Activity this year on area lakes has been high. Delavan is quite active. Powers, too. Lakes Mary and Elizabeth look alive. Lauderdale is moving nicely. Geneva has a recent spate of activity that looks nice on paper, but it seems to me that the markets on the other lakes are more uniformly fluid. This is why I propose a new set of house-hunting rules. If you are considering purchasing a property on any lake that isn’t Geneva, and it’s within 400 miles of Chicago, this is what you must do.

You must, without delay, jump off the supposed pier that is actually a dock, the one that’s in front of the house you’re considering buying. If you jump off the pier and smash your legs into the mucky bottom, quickly towel off, go home and shower thoroughly and diligently, then come to Geneva for a real jump off a pier.

If you jump in the water, and you’re somehow small enough that you don’t break your legs, you should float in the water for a bit. If the water, at this point in the summer, is over 80 degrees, you should immediately get out of the water, repeat the showering stage from before, and come to Geneva where the water is a delightful 76 degrees. Warm lake water is for Florida ditch ponds, the ones with the brain-eating amoebas.

If you jump in and the water is sub 80, then you must swim a bit. Back and forth and the same again. You must now let some of that lake water into your mouth. You have no choice. Open your mouth and let the water in. Did you like it? Did you taste things in it that you’d rather not taste? If so, do the leaving and showering thing, then brush your teeth and use mouthwash for a few hours before coming to Geneva. Jump in, swim, let some water into your mouth to wash away your earlier mistake.

If you jump in, and the water is cool, and you can swim without scraping your legs on the bottom or being consumed by seaweed and algae, and the water inside your mouth feels and taste okay, then you’ve passed the swim test. But let’s be honest, you wouldn’t actually be able to pass that battery of tests on any lake but Geneva, but I’ll humor you. If the water test has been passed, then you must go rent a boat.

Once you have rented a boat, note I said a boat, not a pontoon because there is a difference, then you should take a cruise around that lake. Did the boat ride end sort of right after it started? Yes? Then take the boat back, demand a refund for your unused hours, and come to Geneva. Our boat rides take a couple of hours, because real boat rides shouldn’t make you dizzy from the continual right, or left, turn.

I could add more things to your list, but there’s no point. If you’ve actually considered the above, you’re already at Geneva, marveling at the importance of it all. Our lake is big, it’s clean, it’s deep and it’s rare. It’s not like other lakes, and that’s not because it’s busy on a Saturday afternoon or because the real estate is expensive. It’s not like the other lakes because it’s better than the other lakes, and I’m telling you that as I guy that almost once tasted Vegemite.

Classifieds

FOR SALE: One Lake House

Lightly used, near perfect condition

Well, that’s not entirely true. We have owned this home for two years, and we’ve lightly used it. We have shared many beautiful moments here, under this roof, which doesn’t leak, not one bit. It used to, back when the prior family owned the home, but it doesn’t now. We spent our first weekend in this house and we were appalled that someone could have lived here in the condition that it was in. The house didn’t even have air conditioning! Imagine spending weekends without air conditioning. We inquired of the last owner, whose family was represented by the eldest son of three, as to why or how they could have spent so much time here without air conditioning and with that slight drip drip drip that came through the porch ceiling during a heavy rain. He told us that when it was hot out they would open the windows and turn the fans on, and they’d go swimming in the morning and then they’d go swimming in the afternoon and when it was late they’d go swimming again. He said the heat didn’t bother them, because their swimming suits were almost always wet. Imagine the inconvenience of sitting in a porch in a damp swimming suit!

Sleeps eight

We did that once. The first weekend after we had the air conditioning installed we invited so many friends and family members to our new lake house. We didn’t yet have the roof leak fixed, so we hoped it wouldn’t rain and if it did rain, we hoped that no one would notice. Could you imagine the embarrassment if someone saw that drip drip drip from our porch ceiling! That weekend things started off well. We had so much fun cooking steaks that we bought at Whole Foods on the way up, and then we had so much more fun sitting in the porch telling stories. That’s not all together true, because we only stayed in the porch for a while until we decided that it was just too chilly to spend another minute out there. The next day it was cloudy, which ruined the day for everyone. We were going to take a boat ride, but the clouds were like mostly blocking all of the sun, and it didn’t even clear out until it was nearly dusk. That night, one dear friend of ours left early, because he had a brunch in the city that he had to attend. He told us later that the croque madame was the best he’s ever had, and he’s had them all over the world.

80 Feet Of Frontage

We bought the house because the Realtor said it was good to have this many feet. We didn’t really care how many feet it had, but the builder told us that it was good because when we decided to tear the house down (we didn’t) it will allow us to build a big house like the one we have on the cul-de-sac back home. We took a family picture on that lawn once, and the men wore khaki and blue and the women wore white. My aunt wore her white Tory Burch shoes and I can remember the look on her face when those heels sunk into the lakeside lawn. She was mortified, and we all laughed, though later I confided to her that it wasn’t a laughing matter. I helped her scrub them clean in the sink, which we replaced with stainless steel because the sink was porcelain, and the old owners hadn’t been careful with it so there was a chip out of the front side. One day, we thought about playing the game the kids call “bags”, so we went to the store to buy the game. We drove all around but couldn’t find a Dick’s Sporting Goods, so we didn’t buy the game. Can you imagine a town without a Dick’s Sporting Goods? My heavens, I feel like I can’t even turn around at home without seeing one!

Close to Restaurants

When we bought the house, we were told that the neighborhood had a summer cookout each July. We were told it was a big event. The first July, we went, and we wore our whites and our khakis, and I even brought a sampling of macaroons from the shop on the corner near our cul-de-sac home. We were excited and nervous for this event, and when we walked up it seemed as though everyone was having a great time. There were children laughing and playing. The adults were gathered around the food, and we set our macaroon’s down next to a bowl of potato salad. The smell of grilled meat was everywhere, but the plates were paper and the meat was actually brats. Back home, we have a neighborhood party where they boil lobsters, and here I was, sitting on a bench with sand on my shoes and a sausage looking hotdog that they called a brat. I ate some of it to be polite, but I thought more about the lobsters and the drawn butter and the way my back hurt front sitting on that wooden bench. There are restaurants in town, sure, and once we went to one and the waitress was slow and the food wasn’t great. Admittedly, when the chef at the cafe down the road from our suburban mansion hails from France, how could I expect to find this breaded and fried fish even palatable?

Immediate Occupancy

We had intended to use our prized lake house this summer, but alas, our daughter is at cheer camp all of July and our son is first in his class and he decided to spend the summer studying for his ninth grade entrance exams. They came to the lake with us often that first summer, but once my daughter stepped on a rock in the shallow water near the pier ladder, and she cried and she cried. Mommy, she said, why are there so many rocks? I told her that I didn’t know, but that it would be okay. We drove home that night so that I could take her to the Cheesecake Factory for her favorite dinner. I knew that would make her feel better, and after that she didn’t want to swim because who could blame her?

Price Available Upon Request

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