Blog : Market Updates

Geneva Lakefront Sales

Geneva Lakefront Sales

Now see, that’s a spring weekend. When I write about how much I dislike spring, I should be clear: I am not an opponent of seventy degree April weekends when the trees are blooming and the tulips are blooming and anything that was seemingly dead has now come to life. I dislike early spring, ugly spring. March, you know what I’m talking about. This is the spring I love, and this is the spring we’ll have from this day until the last day, when summer arrives. If you don’t feel the immense buildup towards another Lake Geneva summer, then I’d only ask what it is you’re doing with your life.

Last week, two lakefront sales.  My listing on Park Drive on the south shore sold Friday for $1.2MM. That’s a 60′ level lakefront lot with nice views, a three bedroom house and a two car garage. To be sure, there’s nothing super fancy here, but there is a solid house on level frontage with a private pier. $20k per foot is a price the market will pay often for such a property. I was pleased to get that property sold, both for the long time owner and for the new buyer.  This is also my first lakefront closing of 2017, but rest assured, there are more to come.

The more interesting sale last week was not mine,  and even mentioning this brings me  and my extended family intense, enduring shame. This was not my listing and it was not my buyer. Ever notice how you get emails from agents or you see their “sales” on social media, and it seems as though one agent is selling absolutely everything? That’s because agents like to disguise the fact that the sale was not actually theirs. I can’t be like that, I won’t be like that. So I’ll tell you when I sold a property or when someone else sold it. This seems the only honest way to approach this. Oh, and those Facebook ads you see where an agent is advertising a particular property? That’s not always their listing, either.  The online and print real estate game is changing, and the lines of what is and what might be are increasingly blurred. Onward towards the sale that wasn’t mine.

Sidney Smith is a nice lane.  There are nice houses and super nice houses here, nothing bad. The lakefront, East of the Smith house, was always nice, but never particularly improved. Decent houses occupied the strip of land between the Smith estate and Loramoor, but nothing had been built there for several years. A couple years ago two lakefronts sold on Sidney Smith, both homes that were either tear downs or renovation candidates. Alas, as this is Lake Geneva and the year is post-2012, the two homes were torn down and two new homes were built. One of the new owners was just beginning construction when they had a change of plans, and the house hit the market.

Now, it should be noted that Sidney Smith is nice, which is why I already noted it. It should also be mentioned that these lakefront lots measure 105′ in lakefront width. They are nice lots, but they are not estate lots. The closest comparable lot size would be found on Lackey Lane, both in terms of front feet and overall land size (about three quarters of an acre). As you may know, I sold a stylish Orren Pickell house on Lackey last summer for $4.275MM, and in the same year I sold two land value deals on Lackey in the $1.9MMs. The land on Sidney Smith had sold for $1.925MM in 2015,  further solidifying the comparable status of Lackey and Sidney Smith.

This home that hit the market last summer did so at $3.895MM, and sold after a short time on market. The buyer was not buying a finished product here, rather she was contracting on a house that would  be finished the following April. The sale closed last week at $3.8MM, though I understand there were added upgrades that may have impacted the actual buyer cost. Still, we can look to this sale and see how it makes sense, especially when compared to the Lackey sale from last summer.

That said, this Sidney Smith house was not on par with that Lackey house. On the exterior, it was more basic, less ornate.   Though the square footage was similar, it was less of a house.   But the SS sale proves one thing about this market, and that’s the level of construction that buyers are willing to trade for their four million dollars.  The homes do not need to be stunners. The lots need not be estate quality. The houses need to be nice enough, the land nice enough, the location nice enough. Long gone are the days when $4MM bought an estate. This was the case as recently as the early 2000s, but this is not the case today. Four million dollars will buy a good property with a good house, or a great property with an okay house, or a great house with an okay property, but rarely will it buy a great house with a great property.

The sale matters if only for the fact that it solidifies what the market can offer a buyer for $4MM.  This also reinforces the smart decisions being made by those who have purchased 100′ of land in the last few years and are, or will be soon, building new homes on those parcels.  The market is rewarding new construction, so if you have it and have a hankering to sell it, let’s talk. If you’re a buyer and you’d like newer construction but you can’t find it, we should also talk.

 

Aged Lakefront Inventory

Aged Lakefront Inventory

So much excitement, so early on. New pictures, new mulch, new signs. This is going to be it, this is going to be the year. The month. No, the day. Will it be today? It might be tomorrow. Certainly by Saturday. Sunday, well that’s a day off for many. Monday? Could it be? No, it’s not. A few days later nothing. Weeks, nothing. Months, nothing. A showing next Friday! That’ll be the one. What took so long? The showing is a bust. The buyer’s daughter had the sniffles and so they decided against the arduous trip up paved roads from so far away as Barrington.   There was once so much optimism, so much hope. So much blind faith. And now, nothing. Days to months and months to years.

To be a seller today is to be confident. The markets are hot, mostly hot anyway, or so the newspaper says. Certain markets are slowing, the Hamptons, Manhattan, Beverly Hills. But are they slowing because they were recently too active? Are they only slowing now relative to the torrid pace of the last half decade? Are they slow, or just less magma than we’ve recently been accustomed? Even so, those are those markets and this is this market. Sellers at Lake Geneva are, for the most part, bursting with enthusiasm.

And that’s fine, for a while. Initial enthusiasm is life affirming, and it’s important. Sellers should be proud of their house, proud of their mulch, proud of the photos. Proud of that real estate description (see my prior post). Lake Geneva is a market filled with nuance and irregularity, and for those reasons alone, every seller has hope. That house sold for that much, so my house HAS to be worth at least this much. Oh how much fun it would be to sell in a market that makes complete sense. A ranch on a street is worth the same as the ranch on the same street. Here, the ranch can be worth more or less depending on so many factors, all of which are not entirely clear.

This is the new seller situation, but what of the aged seller? What of the property that hit the market with speed and has since, over time, dulled to a fruitless crawl? How does that seller feel bout so many mentions of a “hot” market? The initial emotion is anger, not at the market or at the house, but at the broker. This is the problem during times of these active markets. If a house isn’t selling while everything else is, then the blame must lie solely on the shoulders of the guy or gal whose name is on the sign. It’s their fault. And often it might be, but let’s assume you didn’t hire a bad agent, because you’re smarter than that. Then whose fault is this delay?

It’s the price, silly. Hot markets can only overcome so much. An active market might allow a seller a 10% premium over a calculated value, but 20%? 30%?  Where does it end?  The low inventory condition at the lake is one reason lakefront sellers are so confident.  If I have a 1960 Corvette fuelie and I live in BumbleTown, Wisconsin, population 184, do I get to ask  $150k for a car that’s only worth $90k?  But I’m the only 1960 Corvette in town! The absurdity here is the same as a seller who thinks any price is attainable simply because the competition is nonexistent, or slight at best.

That brings us to the market today, and the confident seller of last year. Last year’s confident seller is this year’s weary seller, and those weary sellers are just who aggressive buyers should be targeting.  New sellers are too optimistic. Old sellers are growing tired, and an ambivalent seller who has let their hope diminish is the best sort of seller for a value minded buyer. Let’s get out soon and find a few of these sellers. Let’s find properties that have been overpriced for so long the seller has no choice but to accept the reality of our lower offer.  Sure the market is hot. Sure new inventory won’t be easy to buy without paying a market rate. But in spite of this, there is opportunity if only you’ll throw your attention towards the sellers that the market has forgotten.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

This is the weekend we need. This is the weekend we deserve. This is the weekend that starts it all, really. There’s a long standing believe that Memorial Day Weekend is the kick off to summer. That’s nice that people still think that. I don’t. I think what I know, which is summer starts just as soon as the weather warms enough to turn our thoughts to it. A warm weekend in February doesn’t accomplish this. We enjoy the warmth but we know it won’t last. A warm weekend in April, now that’s the start of something. This is the weekend that starts it all. Seventies and sun, here we come.

The low inventory theme continues on the lakefront, though several “new” listings have come to market of late.  Of course most of these aren’t new at all, they’re just recycled inventory from last year that might have a better shot at finding a buyer now. On the lake there are at least six pending contracts, and three of those are deals in which I’m involved. I like that ratio, though 100% would be far more preferable than 50%.

I have a new contract on an entry level lakefront in the Highlands (my buyer, not listing). That’s a fixer upper and it’ll sell for a fixer upper price next month. My Park Drive lakefront with 60′ of level frontage is under contract with an asking price of $1.299MM. That’s a nice little house with a big view of the water. A listing on Constance in Williams Bay is under contract with an asking price in the low $2MMs. That’s a listing that I had a couple years ago but failed to sell. This is for my enduring shame.

The modern in Williams Bay for $3.4MM is still pending sale, as is the new construction on Sidney Smith in the high $3MMs.  New and of note is the pending contract on my listing at 700 South Lakeshore Drive in Lake Geneva. I listed this home last fall and told you that I would sell it. I wasn’t lying. It’s under contract now and will hopefully close this spring. If and when it does, that’ll be my sixth sale over $5MM since 2010.  The thing about being a luxury broker is that everyone can call themselves one, but it’s a lot harder to actually be one.

In spite of some new inventory,  we still have only 19 true lakefront homes (including the South Shore Club) on the market today. That’s remarkably low inventory, and it has left the market wishing for two very different things. Sellers love this environment, and hope it stays for the remainder of this year. Buyers are frustrated by this limited inventory and find themselves in foul moods as a result. I’m somewhere in between, hoping for new inventory but appreciating the environment for what it is today. The danger now is for sellers to not be too emboldened by the situation, and for buyers to not disengage from their searches just because they don’t initially see what they like. Sellers, stay smart, stay rational. Buyers, stay engaged, pour over the aged inventory and look for value while at the same time being ready to pounce on something new and exciting.  Buyers and sellers, work with me, and have a terrific first nice weekend of 2017.

 

Above, sunset at 700 South Lakeshore Drive, Lake Geneva.
Geneva National Market Update

Geneva National Market Update

I decided this morning that some market behavior has no choice but to flood over into different market segments. If, as we discussed last Friday, the primary home market is on fire below $350k, then the lake access and vacation home segment should be similarly torrid under that same mark. There’s no greater concentration of sub-$350k properties in the vacation home segment than in Geneva National, and so, as the theory goes, we should assume the market there is performing quiet well. Guess what? It is.

In Geneva National today, there are 80 MLS offerings of condominiums and single family homes (zoned condo). Of those 80, 12 are pending sale. Looking deeper, of those 12 pending properties, 10 are priced under $350k. This is a positive for Geneva National as much as it is a glaring negative. The condo market is doing just fine under that benchmark price, even though the prices are stagnant, but above that price Geneva National continues its decades long falter.

Of the 80 total homes and condos on the market, 39 of those are priced at or above $400k. Of those 39, just one is under contract today per the MLS. I’m not really worried about the homes in the $400-700k range within GN, as I think they will always have some relative liquidity in the market. The drag on those homes, as we’ve discussed, is the availability of loads of vacant lots and the incredibly low prices of many of those available lots. Why buy someone’s old house for $600k when you can build a new one for $575k?

On that subject, Geneva National would be wise to consider a revision of their condo declaration. I’m not attorney, so I’m not advocating as one, but I think GN could solve some of its vacant land inventory glut if they amended their declaration to allow property owners to purchase adjacent vacant lots and not pay the monthly assessment on those lots until they are sold by that owner or until a home is built. If I’m an owner in GN I might consider buying the lot next to me if it’s $25k, just because I’d like the privacy. But if I do that today I’m going to pay $300 or so per month in association dues, on top of the same amount I pay for my built house.  Because of this, I might shy away, but if I didn’t have the pay those additional dues, I might consider it. Eliminating the vacant lot inventory should be the goal of Geneva National, and this is one way to help accomplish that.

The biggest question for GN today awaits it at the top of the market. There are seven homes offered today priced over $1MM. These are nice homes, to be sure, and they likely couldn’t be built (at least some of them) for what they could be bought for, but there’s a problem here. The market in GN has closed three homes over $1MM since 2010.  That’s one home every two years, rounding down out of kindness.  Today GN has 14 years worth of $1MM+ inventory on its books. This is a bad thing, and I’m not sure how the market ever catches up to these heavier offerings if the housing market between $500k-$999k is still suffering as well.

So what do I like in Geneva National? I like the condos priced under $250k. I think they’re cheap, I think they can’t easily be replicated at those prices, and I like them for a vacation home seeker who doesn’t want to break the bank.  In spite of the unique difficulties facing Geneva National, I continue to think there’s nothing quite like it in our market, heck, in the Midwest, and for that reason it deserves consideration.

Walworth County Market Update

Walworth County Market Update

When you’re a Realtor, you’re supposed to want to do everything you can to sell anything you can. You’re supposed to pay attention to every segment within your market, to the goings on in the rental world, to the commercial things, to vacant land and to that cute bungalow in town. The one near the school.  Realtors are told to be experts. In the next breath, they’re told to be always available, always present, always here for whomever it is that requires service. This is all a terrible mistake, and not coincidentally, this desire to do all things is the reason that most agents can’t achieve success.

Now, take this guy on the other hand. I don’t really want to do any business that isn’t the sort of business I want. If you own a wonderful apartment building in Elkhorn, I’m super happy for you. But I don’t know enough about the rental market in Elkhorn and the desired returns of that particular investor community, so I can’t (and won’t) successfully work with you. I’m not a commercial guy. In the same way, I don’t know anything about the single family housing market in Darien. I heard it’s okay. Taxes are high. That’s all I know, and as such, you wouldn’t be doing yourself any favor if you were to wish for my services in Darien.

The benefit of this narrow focus is as obvious as the detriment. I am not all things to all markets. I’m all things to one market. That’s my goal, and that’s my life, and I’ve made a decent little living serving only one master. But today isn’t about me, no matter how well I’ve done so far to leave you with that impression. Today is about the broad Walworth County market. Today isn’t about Lake Geneva, it’s about everywhere else. The markets in these other areas are thriving. Absolutely, positively, thriving.

Want to buy a little cottage on Cherry Street in Williams Bay for less than $200k? So did someone else. The house is pending. Want to buy a vinyl ranch in Lakewood Trails? Yeah, so does everyone else. Feel like a little starter house in Delavan for $69k? Too late. It sold. How’s about a late 80s raised ranch, complete with some sort of brown brick and a mismatched brown roof? Pending.  Delavan is doing well, except on the lakefront, where there appears to be just one home pending sale today. Earlier, I meant to say everywhere is going fantastic, except Delavan Lake.

Want to find a reasonably decent house on 3-5 acres in the country somewhere? Nowhere in particular, just somewhere around here-ish?  Ideally under $400k. Good luck! Those homes are selling at a feverish pace, and inventory is low.  Darien has 14 homes available, five are under contract.  Elkhorn has 34 homes for sale. 18 of those are under contract. Nine others are pending sale.  That’s absolutely remarkable if you think about it. Amazing, really. Well done, sub-$250k buyer. You’re buying, and you’re smart.

Why is the primary market here doing so well?  It’s thriving today because the prices are still modest, still reasonable, still affordable. The interest rates are low but rising, and this market is super sensitive to rates, and to the threat of increased monthly costs. The primary market is performing well, but over $350k that strength dries up. Consider the city of Lake Geneva, where 40 homes are available today. Of those 40, 25 are priced under $350k. Of those 25,  ten are under contract. Another four are pending.  Over $350k? Not a single under contract or pending sale.

And all of that makes solid sense. The primary housing market is driven by those people who work here, and most of the jobs in a resort market are the sorts of jobs that can support home ownership on a modest level. A nice Walworth County job can buy a $275k colonial on a lot that was home to corn not so long ago, but most Walworth County jobs cannot support purchases over $350k.  But this isn’t about jobs and it isn’t about interest rates and it isn’t about me. It’s just about the primary housing market, and today I tip my hat to a vibrant market segment that I have absolutely nothing to do with.

 

Photo courtesy Kristen Westlake.
Lake Geneva Market Conditions

Lake Geneva Market Conditions

I had a dream last night. In the dream I was just myself, no one else. I wasn’t able to fly, or able to breath under water; nothing terrific like that. I was just a Realtor in this dream, going about my Realtor business. I was in a living room, someone else’s living room, not a room I had been in before. It wasn’t a very nice living room, but it was okay, I guess. In dreams, decor rarely matters.

The seller was someone I knew. A kid I knew a few years ago, he couldn’t be more than 22 now, as he was in the dream. He was sitting in his house, except in real life it is his parent’s house, but not in dreams. It was his house and he wanted to know how much it was worth.  He kept repeating three million dollars. He was intent. Three million dollars. Maybe three million five hundred thousand dollars. He wasn’t sure.

I was uncomfortable in the dream. I wanted to hear him out, to listen to the myriad reasons his house was worth this much money, and so I sat on the couch as he pointed to comps. The comparables were indeed nice homes, lakefront homes, big ones and fancy ones and I had sold many of them. I nodded along with his charismatic plea. Three million dollars.

When it was my turn I explained that those homes were large lakefront homes, and that his home was a small A-frame located two blocks from the lake. He sat back in his chair, feigning disgust at my lack of enthusiasm. I used the example of the Knollwood house that sold two years ago for $2.2MM, and said that the only reason that home sold for such an incredible number was because the home was so amazing. It was perfect, I said. Luxe Magazine, I said. Three million dollars, he said.

When I sensed I was making some progress with him, I asked what he had into the house. He said $300k. I said, “you mean your parents had $300k into it”. He smiled and acknowledged that yes, it was his parents’ money and their investment, not his. I told him he’d be lucky to get $400k for the house, but that he shouldn’t be so upset because that’s a lot of money for a kid his age. The dream ended without any further commentary. I’m uncertain if I got the listing, but it didn’t matter because I didn’t want it anyway.

This was a dream, but this is my life today. The market at Lake Geneva is filling with competition, I should say, with other agents whom, no matter their lack of knowledge or prior success, are intent on telling the world of their proficiency. The competition isn’t that, but it looks like it when you drive around and see names on signs that you’ve never seen before. It’s a market chock full of agents, of open houses, or letters and websites and Instagram hashtags. Experts are everywhere. Things are changing, and it’s the competition in the business of real estate that’s often bad for the consumer.

And that comes back to my dream. Sellers know the market is hot. They know it because all 500 some agents in Walworth County are telling them. Hot. Hot. Hot. And so agents are bidding up the listing prices of houses, especially lakefront houses on Geneva Lake, and sellers are feeling flattered by all the attention. The dream I had was just that, a dream, but it’s based on the reality of this season. Sellers, a note of caution. A hot market means there are market buyers for your house. Someone might even pay 5-10% more than the market value if they love it enough. But if we take the bait and price homes too high just because there’s a slight chance we’ll get away with it, we’re going to damage the market by filling it with overpriced homes that will, ultimately, drag on the market and put downward pressure on the unrealistic listing prices.

Buyers, work with an agent who knows the market because they’ve proven that they sell the market. Sellers, work with an agent who knows the market because they’ve proven that they sell the market. This isn’t really that hard.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

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

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

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

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

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

Geneva Lakefront Market Update

Geneva Lakefront Market Update

I’ve been writing 2017 on my checks with solid consistency for the better part of a month now. There are no more sixes that have been scratched into sevens.  It’s 2017 and we know it, the shock of a new year has worn off.   Spring is racing towards us, or it’s here, or it’s not, no one is sure.  The year isn’t old enough to judge yet, but at seven weeks, the market is ready for a 2017 assessment.

The best way to judge an early year market is not by watching the closing data. Closings in January were sales from November or December. They are hold overs that pay testament to the prior year activity, and so they aren’t important. No matter, there haven’t been any 2017 lakefront closings to discuss. But there have been some new listings to review, and in those new listings there’s a bit of a story. The market can be measured by sales, measured by inventory, but also measured by the market reaction to new inventory. Let’s discuss that.

Last week a new lakefront in Cedar Point came to market in the $1.5MM range. A few days later, that lakefront property had sold. A magnificent sales job by the participating agents? A super rare piece of inventory that throngs of buyers had been anxiously awaiting? Not really, just an entry level lakefront that came to market cheap, and sold quickly.  Every property has a price at which it will sell immediately, so there’s no secret to that particular sauce.   But the sale proves the entry level market still has considerable legs even after the high volume year that was 2016. The quick listing and sale is a good sign for our market.

Two other lakefronts were brought to market this year, one being my listing in the South Shore Club that you’re looking at in the above photo. That’s a great house, but I haven’t sold it yet. It’s only been on market for three weeks, so by now it’s only fair to recognize that I didn’t price it as a fire sale. Another home in the South Shore Club that hasn’t sold for years came back to market as well, leaving two available homes in the club.  Remember, these aren’t association homes priced as lakefronts. They’re $5MM lakefronts priced as $3MM association homes.

Another lakefront in Fontana hit the market at just under $6MM. That’s a nice lakefront home to be sure, and it’s only been on market for the past two weeks or so.  Three new listings in total, one sold immediately, the other two for sale.  No carry over sales from 2016 yet, although there are a couple that will be closing over the coming weeks as there are currently five lakefront homes pending sale (including new contracts on the Solar Lane lakefront and the harbor front home in Country Club Estates).  So where does that leave us? Do we have the makings of a dynamic 2017 or are we seven weeks into a dud? The quick sale in Cedar Point tells us that buyers are ready and willing to pounce, but the two available at the higher ranges suggest buyers are still measured, still cautious, still paying attention. After all, this is the Midwest and we do measured very, very well.

The only thing we know so far is that the market is low on inventory, which is the same thing we knew at the end of December. Without new inventory, there’s no fuel for this fire.  The stock market stability is wonderful for our real estate market, and interest rates remain low, albeit it at higher lows than last year.  And there are buyers, plenty of buyers. All we need now is some more inventory, and I expect the market will find a way to provide that in the coming weeks. If you’re a buyer in search of something you haven’t yet found, let’s talk.

Linn Township Lake Access Market Review

Linn Township Lake Access Market Review

Once, I was in trouble with a seller. The seller was upset, but not upset like a seller gets when I leave a light on. Which, by the way, I tend to do. It’s like a puzzle, a prize, a riddle, each time different but always the same. A light, left on, somewhere.  But this seller was more angry than that, seriously angry, and not because I had left a light on or eaten a Reeses Peanut Butter Cup out of the pantry, which, of course, I never, ever, do. This time the seller was angry because I listed her home in the MLS under “Linn Township”. She said her home was in Lake Geneva, that no one looks for a home in Linn Township. That Lake Geneva is everything and Linn Township is nothing. Where is Linn Township? No one knows. She was upset.

This is not entirely uncommon, and if you’re a buyer I’m guessing you’ve possibly struggled with this distinction. The City of Lake Geneva is one municipality. The Town of Linn is another.  Where the confusion comes in is the mailing address for Linn Township homes is Lake Geneva, WI.  So, my confused seller from the example above was indeed correct, that her property had a Lake Geneva address, but it physically wasn’t in the City of Lake Geneva. Making matters worse, the Town of Geneva (think Lake Como, Geneva National, etc) also has a Lake Geneva mailing address but isn’t at all the City of Lake Geneva.  Of course none of this matters if Neumann was right and zip codes are meaningless.

Linn Township, whether confused for the City of Lake Geneva or not, is, without any doubt, the biggest player in our Lake Geneva lake access vacation home market. Linn has loads and loads of lake access communities, in fact, far more than all of the other lakefront municipalities combined.  I attempted a quick mental count and grew quickly tired by the time I had worked my way from Lake Geneva to Williams Bay, adding up 10 associations in that stretch alone. That brings up another item of geographical housekeeping: Linn Township is that area on the lake that extends on the North Shore between the City of Lake Geneva and the Village of Williams Bay. It’s also the area on the South Shore that runs from Fontana on the  West all the way back to the City of Lake Geneva on the East. It’s a large municipality, hosting a few dozen lake access associations, some big and others very, very small.

Today, just 16 off-water lake access homes are available in Linn Township. That’s a tragically low number, but it’s actually more inventory than most of the other municipalities have, relative to their 2016 sales. Last year, 12 lake access homes sold in Linn Township, priced from $69k for a cottage in Knollwood (please do not ask me to find you a $69k cottage in Knollwood, because the one that existed just sold), all the way up to an off-water estate in Loramoor that I sold for $1.625MM.

Maple Hills had a sale in the $200s, but before I tell you more, I will tell you that I’m not a huge fan of Maple Hills purely because it doesn’t feel like a lake access community. The location, approximately three million miles from the lake, makes it feel more like a subdivision in the woods than a subdivision near the lake, and for that reason, I’m not all that interested.  There was a sale in the Lake Geneva Beach Association at $360k, and there were sales in Wooddale (3), the Lake Geneva Highlands (2), Sunset Hills, Forest Rest, and Knollwood (2).  These are the sales, but 2016 was more notable for what didn’t sell, rather than for what did.

Per the MLS, there wasn’t a single closing in Shore Haven, Lake Geneva Club, Oak Shores, or Sybil Lane.  Nothing sold on Aspen Lane, nothing on Black Point, nothing in Glen Fern, nothing in Hollybush, nothing on Hunt Club Lane, nothing in Valley Park, nothing in the Lindens, nothing in Alta Vista, nothing here and nothing there. It was a year of limited inventory, and because of that, the sales totals were anemic. But beyond the lack of inventory pushing the overall number number, there were some notable offerings that didn’t transact. I discussed this at length in my year end review of the lake access market, but as a quick reminder, the market tested that $1.1-1.4MM price range for off-water, older homes that required significant updating and the market responded with a muffled, unenthusiastic, meh.

I don’t think the lake access inventory is going to stay limited for too long, but the lack of available inventory in each segment is causing a bit of gridlock for sellers that would-be move up buyers.  If you own a nice $600k cottage with a slip and you’re looking to upgrade to an entry level lakefront for $1.4MM, that’s really nice. But if you’re that seller who would be a buyer, you need something to buy. If you can’t find something to buy, then you’re not going to have something to sell, and if you’re not a seller then what am I doing here? This is the problem today, as each market needs a carrot waiting for it in the next market higher, and without that incentive to upgrade the market stalls. That’s what it feels like right now.

Linn Township is a wonderful municipality in which to own your lake house. The taxes are low, and without adjacent city-centers, the roads feel more rural, more quaint.  All of Linn Township functions on private well and septic (or holding tank), so that’s something to be aware of but it isn’t something to fear. I live in a home serviced by private well and septic and I’m almost entirely normal.  If you’re looking for a lake access home in Linn Township and your target association doesn’t have any open inventory today, please reach out to me and let me know what you’re looking for. I’ll go find it for you.

Lake Geneva Lake Access Market Review

Lake Geneva Lake Access Market Review

That headline is clunky. But it’s only clunky because it has to be. Lake Geneva is the general term for our market. Unfortunately sometimes it’s too generic, like when people borrow the term to describe a listing near Pell Lake. Lake Geneva Area Home! That sounds better than “It’s Super Close To Pell Lake, Folks”. As for me, I don’t even know where Pell Lake is because I’ve never looked for it. There’s a chance it’s wonderful, but I’m betting against. Anyway, Lake Geneva is the market, it’s the city, and Geneva Lake is the lake. So when I say “Lake Geneva Lake Access” I’m describing the homes within the city limits of the City of Lake Geneva that possess lake access to Geneva Lake. That’s all. Onward.

I heard that the weekend Winterfest festivities were a bit crowded. As in, way too crowded. And this is the problem with Lake Geneva just as it’s a reason that people like it. If you like the scene, no where can it be found so easily. There are restaurants and shops and shops and restaurants, and we used to have like fifty coffee shops and now we only have a couple. Lake Geneva is the epicenter of this market, it’s important and it’s necessary. A fantastic lake and beautiful homes only take you so far, because when it rains or when it’s winter you have to be able to visit a town to buy things to eat and things to wear. Lake Geneva might be everything to our local economy, but in terms of our lake access housing market it actually matters very little.

That’s because for all of the real estate in the city, there aren’t loads of lake access homes. Much of the market functions like a lake access market as that area behind the beach and the library often trades from one vacation home owner to another even though that market (Maple Park) lacks specific lake rights.  In this segment, the homes immediately along Geneva Street, those homes that face the lake, they have been increasingly popular for the vacation home set. The homes lack private lake access but they have that view, and nowhere else can a vacation home owner so easily wake on a Saturday and stroll along the lake into town for breakfast. That’s pretty nice, but sorry Sorta-Lake-Access-Maple-Park-District, you’re not included today.

For 2016, just seven lake access homes within the City of Lake Geneva printed. They ranged in price from $568k to $1.35MM.  The lake access market there consists primarily of Geneva Manor (two sales for 2016). This association on the West side of town is fine, but the off-water homes lack boatslips and nearly all of them lack views, and so you’re buying a home in a neighborhood that affords you a private park and swimming piers, but no slip. It should also be mentioned that you’re buying into a tax-heavy environment, as an offer water home in Geneva Manor that prints in the $800k range will soon receive a tax bill in the $18k range. That’s rough, and while the lakefront market generally absorbs the city taxes much more easily, the lake access market there suffers a bit for it. Then again, most buyers don’t even think about that before they buy, so perhaps it matters very little.

 

Further away from the city but still within the city limits, Geneva Bay Estates. This association had two sales last year, both of rough homes in terrific locations, both possessing a boat slip. These homes sold for $575k and $825k, respectively. Geneva Bay Estates is off of Snake Road, and it’s highly desirable. Low density, low overall house count, and a pleasant lakefront park and pier system make for a high quality lake access association.

On the other side of the city there are several associations that offer its owners private lake access, but they are lesser known because they’re not very large. Maytag Estates and Somerset are the largest here, and one off-water sale did print in Maytag for $1.35MM. That was a decent home with a slip and some views. Somerset had some inventory last year but no MLS sales. To the North, Pine Tree Lane had a sale with a bit of a view and no slip for $545k.  One other home sold, but it was technically a condo on Wrigley Drive. That home sold off-water with a slip for $1.030MM. It was a nice house, but with limited outdoor space, no lakefront park, and a pier shared by three owners.

Today, just two off-water lake access homes are available in the city. Our low inventory theme plays no favorites, as every association and municipality is plagued by a lack of inventory at the moment.  Plenty of buyers want to be near to the city of Lake Geneva, and there are good reasons for that desire, as the scene there is difficult to beat. The convenience of walking into town for a Sunday morning breakfast or a Friday night fish fry is meaningful. But along with that convenience and activity you have to consider the throngs of vacationers that arrive in that city on the weekends. It can, at times, feel like too much. Like at Winterfest, when the bars are full and all you really wanted was a Badger Burger.

Fontana Lake Access Market Review

Fontana Lake Access Market Review

In Fontana, there is a question. Country Club Estates would have you believe that it is the king of Fontana’s lake access world, while Glenwood Springs feels the same. Which association reigns? And while they’re battling, Indian Hills asks for merely consideration in the conversation.  Fontana, unlike Williams Bay, has three large lake access associations, four if you count Brookwood, which I’m not going to for no other reason than I don’t feel like it. Buena Vista should be included, but Buena Vista, while large in overall size, isn’t an association that likes to turn over very often, so in a market context Buena Vista is actually quite small. No matter the association in charge, Fontana is a supremely desirable municipality with numerous lake access associations, all of which deserve your attention.

Country Club Estates tends to have good years. When the markets are down, Country Club prints volume. When the markets are up, Country Club always seems to have inventory. It’s just a good association with nice scale that buyers tend to like. The neighborhood feels interesting, owing that in large part to the hills and the winding roads and the forested yards.  Country Club printed 27 total sales (per MLS) in 2016, priced from a modest $98,500 all the way to $585k. For those who continue to think that Geneva is only a playground for the rich and richer, consider 18 of the sales in Country Club closed below $300k.  Do you get a boatslip with your purchase there? Of course not. Do you get some lush parkways and a large lakefront park? Don’t be silly. What you do get is simple lake access through a park and beach system that’s not entirely exclusive to Country Club Estates. Still, the access is good enough and buyers find Country Club to be desirable.

In part that’s because of the Fontana location, because of the harbor at the end of the road where a buyer can moor a boat, or because of Big Foot Country Club. There’s a golf course and a tennis court, and it’s close to everything else that Fontana has to offer. Of note is the absence of higher priced sales last year in Country Club. Typically, sales can print in the $700-900k range without terrible difficulty, but last year the highest MLS sale was at that $585k mark even though inventory over that mark did exist. Today there are just eight homes available per MLS, offering less that four months of inventory based on the 2016 production.

If you like Fontana and you want a boat slip with your purchase, you’d be wise to consider Glenwood Springs. Located just to the East of Country Club Estates, Glenwood offers plenty of price points and plenty of frontage.  Unique to Glenwood is the abundance of private piers that accompany off-water homes. I sold two such homes last year, one on Oakwood for $1.1MM and one on Linden for $871k. Both of those homes were off-water, but both had private piers. In addition to these homes with piers, some have slips and most have a buoy available through the association. There are two pier systems for swimming and boating, and members can walk to the sand beach that the Country Club folks use (but don’t use their pier). The association has a way about it that just feels right.

For 2016, there were just seven MLS sales in Glenwood Springs, and I was happy to have sold three of those homes.  Prices ranged from $365k for a funky cedar-y cabin, to $1.1MM for my gem on Oakwood. Today, just four homes are available per the MLS. Something to remember with Glenwood Springs- there is a “good” side and a “not as good” side, as Glenwood is bisected by South Lakeshore Drive. Both sides are fine, but I don’t need to tell you I’d rather walk to the lake with my kids and not have to cross a sometimes busy-ish road.

Indian Hills is adjacent Glenwood. The association there is nice, with a shallow but wide swath of frontage marked by a relatively ugly green fence. 2016 closed sales from $107k to $504k.  Ah, but Indian Hills is interesting because not all homes labeled “Indian Hills” have access to the private association lakefront. Of the six MLS sales last year, only three of those had access to the lakefront park and pier. Just three homes are available in the association today, including a lakefront owned by a baseball player who crushed most of my hopes and all of my dreams in game seven of the 2003 NLCS.

Working to the East, Club Unique is a nice association that didn’t have anything available during 2016, and the Harvard Club printed one sale in the fall ($510k). The Harvard Club is one of our co-op style associations, though during a showing a woman once told me, through her porch screens, that the Harvard Club is NOT a co-op. Sure thing, porch lady. But the association is sort of a co-op in that buyers receive membership stock rather than a warranty deed, and there are rules both tricky and nuanced that apply here. If you’re looking for something in the Harvard Club you should let me know, as I’ve sold three of the past four available homes there.

In my haste to tell you about the robust Country Club market, I skipped over two associations on the North Shore of Fontana. Buena Vista didn’t have a single MLS sale in 2016, cementing its position as one of our most exclusive and elusive associations. If you want to buy there, tell me. I’ll dig for you. Belvidere Park is another co-op style association in Fontana, and it’s really interesting to me. Like the Harvard Club there are rules here, but unlike the Harvard Club, Belvidere Park is serviced by all year water and sewer. The Harvard Club shuts there water off in the winter months, so unless you’re lucky to have an alternative water source, you’re not going to enjoy your winter visits all that much. Then again, the Harvard Club has a slip for every home and Belvidere Park doesn’t, so you’ll need to pick your poison.

Fontana is likely our most desirable municipality. The market respects the strides that Fontana has made over recent years to improve their lakefront and to improve their overall village aesthetic.  Having Gordy’s and Chuck’s anchor your lakefront isn’t a bad thing, and having the best beach on the lake isn’t terrible, either.  Throw in a diverse grouping of condominiums (Abbey Springs, among many others) and you have a market made for every budget. The most expensive home in Fontana was a lakefront I sold in November for $7.35MM. The least expensive was that cottage in Country Club Estates for $98,500. If you’re a buyer at any point in between, Fontana has something for you.

 

Above, the master bathroom at 434 Oakwood, in Glenwood Springs. 

 

Williams Bay Lake Access Market Review

Williams Bay Lake Access Market Review

When a buyer finds his way to Lake Geneva and begins to search for a suitable lake house, he tends to do lots of things wrong. He tends to see Glenwood Springs and think it’s just like Cedar Point Park, or he sees the Loch Vista Club and assumes it’s the same as Sybil Lane. Lake access is lake access, after all, and when you’re just up the road a ways from the lake it doesn’t matter what lane you’re walking. This is a mistake, but you can’t blame our home seeker for his folly. It’s not easy to understand this market, unless you’re just looking for some house on some street, then, by all means, wander away. Or worse yet, stop at an open house and work with that agent who shoved the sign into the snow bank.

The associations that surround this lake operate heavily on nuance, and it’s that nuance that confuses and distracts would-be buyers. Shouldn’t a house in Cedar Point be valued the same as a house in Country Club Estates? These two associations are, after all, the most similar of the large lake access associations, and so it makes sense that a home just up the street from the lake on Shabonna would be worth the same as one just up the street on Glenview.  Our buyer, with his obvious knowledge, wanders up Shabbona and finds a house for sale at $1.5MM, then he wanders up Glenview and finds one for $389k. Things are not adding up.

That’s because of the nuance, of the desirability of one place that might be somehow greater than the other place, even though at first blush the markets look the same. Shabbona homes don’t have boatslips just as Glenview homes lack them. But Shabbona has a harbor adjacent and Big Foot Country Club up the road, and all Glenview has is a beach nearby and Kishwauketoe trails.  That’s why the market behaves differently, because of those things that are not readily noticed. Today, I want to begin a few association specific 2016 market reviews to help better explain these nuanced differences. I won’t spend a day on each association, rather I’m going to dissect these associations into municipality groupings. First up, Williams Bay, because I’m from here and I’m sitting here now and it just seems appropriate to put my town first.

The lake access associatons in Williams Bay proper include only these few: Cedar Point Park, Summer Haven, Oakwood Estates, Loch Vista Club, and Dartmouth Woods. Because Dartmouth Woods is a lakefront association that finds membership in our lakefront segment, we’ll skip that for now. The lake access market, though made up of four associations, is dominated by one: Cedar Point Park. That’s because it’s huge, and it’s interesting, and it has the most diverse price points.  2016 provided sales as low as $142,800 and as high as $775k. The cheap sale was a remnant foreclosure, an REO that was an absolute mess of a house. I looked at it plenty, made an offer on it personally once, and decided that it was a house that was terminally hampered by the layout and overall design. The most expensive sale was on Oak Birch, and I liked that parkway cottage quite a bit. $775k for a cottage without a boatslip sounds like a lot of money, until you realize the setting was immensely special and the views comparable to any off-water view you could find.

In total, 16 homes sold in Cedar Point last year.  Three were over $750k, two of which were on a parkway. The parkways, as I should mention, are large grassy swaths that run from the lake and provide ample community lawn space for the association. If your home is located directly on a parkway, you’re in luck. It’s worth a lot of money, even for a home that doesn’t have a slip.  No homes in Cedar Point Park possess transferable boatlsips, in fact, no association home in any Williams Bay association can offer you a transferable boatslip. Keep that in mind.  Notable in Cedar Point last year was not the number of home sales, rather the low entry price of many of those sales. Nine of the 16 sales closed below $300k, proving that Cedar Point is a budget friendly option for anyone seeking a lake house in an old time association.

Nothing sold in Summer Haven last year, and nothing sold in Oakwood Estates. These two associations flank Pier 290 and Gage Marine, with Summer Haven to the North and Oakwood to the south. Both associations offer nice community piers, a private park, and some sparse parking. Summer Haven has a sand beach, making it one of very few associations on Geneva to lay claim to a sandy patch of frontage.  Of the two, Oakwood Estates is the more valuable, mostly because the lakeside aesthetic is superior and the separation from Gage Marine is greater.

The Loch Vista Club is where I grew up. It’s where I will always feel at home. It’s the pier I learned to swim from, the pier my kids learned to swim from, the place I know better than all of the others.  It’s a quality little association, with two piers and a diving board. There are no transferable slips, and the guy next up on the boatslip waiting list first scribbled his name onto it in the 1970s. If you want a slip, the Loch Vista Club isn’t for you. But if you want an idyllic lake experience, it’s a winner. Typical sales prices range from $300k and up, and in 2016 two off-water homes printed. One for $495k and one for $584k. These two sales are important, as they’re actually quite high for off-water homes possessing no view and no slip.

In total, 18 lake access homes sold in Williams Bay during 2016. Four other vacation homes sold last year with private frontage.  The take away is that if you’re a lake house buying in the Bay, don’t buy a home that doesn’t possess lake rights. That is, those special access rights that afford an owner unique membership to a private lakefront park and pier system.  During the prior market peak buyers would routinely buy off-water homes that lacked lake access and treat them as lake homes. They did this because the lake access prices were so high that the non-access homes seemed cheap in comparison. Today, the lake access homes are still affordable, and if you’re looking to make a solid investment in a lake house you’d do well to consider one of these four associations. The available inventory is sparse, but there is still value available.

Above, my son on the Loch Vista Club diving board at sunset. 
Entry Level Geneva Lakefront

Entry Level Geneva Lakefront

My body is slowly succumbing to the course of time, to the insistent, constant force that seeks to whittle and pry and break and bruise, to the inevitable process wherein these ashes will find their way back to ashes. It’s sad, really, at such a tender age to be falling apart. I didn’t intend for it to be like this, but this is my first time in this aging process, and I’m no longer in control. I’m just a guy with creaks and cracks, and while others put up a most impressive facade, I’m nothing, really. I feel this way mostly because of my trip last week, a trip that started fine, included some wonderful skiing and the smiling faces of my children, and ended with my ear pressure being locked somewhere around the Vail Summit.

After driving deep into the far away horizon where the Denver International Airport hides, my ear pressure was the same.  Likely comfortable around 10,000 feet, but now I was at 5,000 and the pressure of those 5,000 feet was constant and unavoidable, ringing and pounding and bullying my inner ear. The flight would cure this, I figured.  When I landed at Milwaukee it was obvious then that my previous attempts to calm my worry were in vain. The pressure built,  my right ear finding some form of normalcy at 900 feet, but my left ear still stuck in the mountains. Certainly it wouldn’t last the night, but last it did. And the next day it would subside, obviously. But it didn’t. For sure the following day things would be fine and my 10,000 foot ear would slowly slip down to 900 feet. No. Such. Luck.

And so I write this morning, contemplating who might be my Gaugiun, but also contemplating the state of the entry level lakefront market on Geneva Lake. That market is one that I’d like to call our most interesting, our most confusing, our most obvious. But none of that is true, because all lakefront segments are that way, they are at once easy to understand and overtly complicated. They are nothing at all but everything, easy to dissect and explain until they aren’t. The entry level market, however, has some unique intracacies that are on display today. Notably, is there a top for this particular market?  Is the land worth what the land is worth and then the house might be worth whatever lofty price someone, someday, assigns to it?

Let’s consider a few things first. Not all entry level properties are created equal. A 50′ lakefront lot in Cedar Point Park that might be 300′ deep is not the same as a 50′ lot in the Lake Geneva Highlands that might only be 180′ deep. I could sell a 50′ lot in Cedar Point right now for more than I could sell a 50′ lot in the Highlands. That’s not anything but the obvious and simple truth. That’s because Cedar Point has proven the ability to sell re-built (whether remodeled or new construction) homes far above the cost of the dirt and the Highlands has not. In fact, fantastically improved homes in the Highlands rarely sell in excess of $1.5MM.

Another example of this is on Walworth Avenue in Williams Bay. This street is a nice enough street, with some condominiums and some entry level lakefront homes with very deep lots. Yet for all that depth, the market there has always struggled to sell anything over $1.5MM. In fact, a 100′ lakefront lot sold there for $1.2MM a few years back, at a time when a 50′ lot in the Highlands would have sold for similar dollars. If Walworth Avenue offered you a $1.2MM lakefront house you might think you’ve found something rare and incredible, when in fact, you’ve found something at nearly the top end of that individual market. Why is that the top end? Because you really can’t buy a tear down or supreme fixer upper on Walworth Avenue for $1.2MM and expect you have any margin in your all-in investment.

The same theory applies to most locations on the lake, excepting Glenwood Springs. In Glenwood Springs, the lakefront homes aren’t even true lakefront homes, yet an entry level home will sell for $1.2-$1.5MM and then the buyer may indeed tear it down. Does this make any sense? Well, actually, yes. Homes in Glenwood Springs have sold in excess of $2.5MM, and such a sale is not an anomaly. At the same time, a 50′ lakefront lot in the Highlands or on Walworth Avenue with actual, real, private frontage, would struggle mightily to achieve even $2MM, let alone $2.5MM.

As I was showing lakefront homes yesterday I thought about this market. I thought about the top end. I thought about where these prices might be able to go. And then I realized there’s likely a disconnect between what I think is reasonable and what a few individual buyers might think is reasonable. If I’m buying a tear down in a market that I believe to be capped in the mid $1s, I know that I’d want to have some margin for my effort. I don’t want to spend $1.5MM and a year of my life stressing out over a project that in the end will perhaps be worth $1.5MM. I want to spend $1.3MM to get to the finish line where a $200k equity bonus might be awaiting me. But perhaps that’s just me. And perhaps that’s just this 10,000 foot ear talking.

 

Summery Things

Summery Things

I’m out of the office for a few days this week on a short family vacation.  In my absence, focus on summery things, like this video from July.  As you know, this house sold for full price in September.  Another summery video will follow on Wednesday, and I’ll be back live on Friday. If you need anything from me before then, please reach out to me via email or cell 262-745-1993.

 

 

Geneva National 2016 Market Review

I write lots of things on this site. I write about birds and trees and lakes and streams. I write about how much I like certain things, like trout and fish, but mostly trout. I write about how much I love this place, how this place is better than the other places, how the more places I visit the more I like where I’m from. But I also write about things I hate, like Michigan and Northwoods houses and Door County and Michigan. I write plenty that might cause  some to feel triggered. But of all the topics, of all the good and the bad, the love and the hate, I get more commentary directed at me when I write about Geneva National. Geneva National, you’re up.

2016 was a good year to be both buyer and seller in Geneva National. Sellers found buyers and buyers found value. Mostly, it was a good thing and a good year for this large association on the North side of Highway 50.  Last year, 71 homes and condominiums sold in Geneva National priced from $59k for a one bedroom condo to $795k for a large single family home. Six single family homes and condo units closed for more than $500k.   This morning there are just 61 total homes and condominiums available in GN, with five more pending sale. That’s really quite positive for GN, as the one thing that plagues this association more than anything is excess inventory.

The 2016 volume trailed well behind the 82 units sold (MLS) in GN during 2015, but both 2016 and 2015 absolutely crushed 2014, which recorded a rather miserable 44 total sales. If there’s any issue with the existing inventory in GN it’s that the top end is far too heavy. There are 20 homes and condominiums priced over $500k available today. If you recall the prior graph, there were only six $500k+ sales in GN all of last year. That means we have at least three years worth of inventory at the top end, and that’s not good news for any upper bracket seller wishing to leave GN.

Even worse is the vacant lot situation. There are, in case you haven’t noticed, loads and loads of unbuilt, vacant lots in Geneva National. Currently, there are 57 available, priced between $7k and $260k (there are a few others that are zoned commercial).  That’s a lot of lots, but don’t fear, because with TWO vacant lot sales in 2016, that means GN only has a scant 28 years worth of available inventory. Even if we average in the 2015 sales (11), there’s still nine years worth. The vacant lot situation at GN is especially troubling for owners who would like to be sellers, because the monthly fees keep coming even as the prices drop. I owned a few different lots in GN over the years, and I must admit I’m happy that I don’t own one at the moment.

The relationship between vacant, available lots and available single family homes is somewhat troubling, given that they are bound into the same market. Too many available single family homes drags on the prices, which leaves less and less motivation for a buyer to buy a vacant lot and build from scratch. If I can buy a nice house for less than I can build it, why would I build? But along those same lines, if the lots are free ($7k for starters), why wouldn’t I build when the cost of the land is essentially zero?  The good news for the GN housing stock is that construction prices are on the rise, perhaps up as much as 20% over the past few years by some accounts, so this might help deter buyers from building. The hope then is that they’ll buy an existing house instead.

2017 looks to be a decent year for GN, and for once the large association is going into a selling season without too much inventory. I’d expect a fair year, but as with the rest of the vacation home market, if the inventory doesn’t build then neither will the sales tallies.  Interest rates should be stable through the first part of the year, but buyers will feel some motivation as rates are higher than they were last fall by a reasonably meaningful margin. GN continues to have too many homes and too many lots and too many condominiums under development. The dues are higher than I’d like them to be. There are issues with all of these factors. But if you’re a buyer looking for newer square footage in a country club environment and you just so happen to like playing golf, then Geneva National just might be your best option.

Abbey Springs 2016 Market Review

Abbey Springs 2016 Market Review

There’s a common theme amongst these 2016 market reviews. Yes, the markets we’ve reviewed so far all preformed quite well in the year just ended. And, yes, each market is low on inventory to start 2017. But beyond that, we have a very similar ratio of performance to inventory in each and every one of the markets we’ve reviewed to date. Abbey Springs had a tremendous 2016, which is not something especially rare. Abbey Springs tends to have good years often, and if you’ll remember when the broad market stalled it seemed as though Abbey Springs kept churning forward.  Abbey Springs has a way about it, and that’s because it’s the only association of its kind in our market. Country Club amenities with resort features and actual frontage on Geneva Lake. It’s rare, it’s special, and the market knows it.

There were 40 (per MLS) sales in Abbey Springs during 2016.  Lest you think that’s somewhat normal, 2015 featured just 20 sales. That’s double the volume year over year.  In 2015 there were five sales over $500k, and in 2016 there were seven such sales. As we enter 2017, inventory is low, with just 19 active listings and one pending sale.  The top end inventory is a bit heavy, with nine homes over $450k available this morning.   Current inventory starts in the $150k range and runs all the way up to $1MM. It’s a unique association that can function and thrive with such a diverse grouping of condominiums and single family homes.

With 40 sales last year and just 19 homes available, those numbers mirror the lake access and the lakefront supply ratios. In all of these markets we have approximately six months of inventory. That’s a healthy ratio no matter the market, though I’d really prefer we have 8-10 months of inventory so that buyers can feel a bit better about their choices.  I think it’s a testament to our broad Lake Geneva vacation home market that we can have such solid activity across all price ranges and all ownership types. Why did Abbey Springs have such a dynamic 2016? Was it because of interest rates or inventory choices or all that summer sunshine? It’s likely due to all of that, but the simple truth of Abbey Springs is that it is without equal in our market and rare inventory will always find an audience.

Abbey Springs will follow the same path as the rest of our local markets. If inventory allows, sales should be solid. If inventory stays low, there’s no way we’ll have a repeat of 2016. That seems obvious, but most markets cannot push their volume totals higher just because inventory exists. It’s a healthy market that can effectively consume as much inventory as it is dosed. Next up, Geneva National, which won’t feel nearly as good about itself after Monday’s post.

Entry Level Vacation Condominium 2016 Market Update

Entry Level Vacation Condominium 2016 Market Update

That’s a clunky headline, to be certain. But clunky it must be, because there’s really no other way to describe this segment of our market. It isn’t Abbey Springs. It isn’t Geneva National (those two updates will be this coming Friday and then Monday). It’s just the secondary vacation home condominium markets that cater to the secondary homeowner. The sorts of folks who buy into these developments are those who seek a piece of this scene, but they wish to join for a fraction of the membership fee required by the other market segments.  When swimming in the lake on a hot July afternoon, there is no distinction between the lakefront owner who paid $5MM and the Abbey Hill condo owner who paid $200k.

I consider this market to include the following condo associations: Willabay Shores, Bayside Pointe, Abbey Villas, and Abbey Hill. There are other such condominiums, but these are the developments that I find most appealing for the vacation home buyer seeking to spend somewhere around $200k.  These are the associations that I would be considering if I were a buyer in that range. We know that 2016 was a year with incredibly low interest rates and a mostly stable (excepting the first 60 days of the year) stock market. Because of those conditions, this entry level condo market should have had a very solid 2016. And that’s exactly what happened.

Bayside Pointe is in Williams Bay. It’s nice, and it’s walking distance to the lake, and the units have small attached garages and there’s a swimming pool. You can also walk to Bell’s store, though I’ve never heard that written in a description as an amenity that carries any particular weight.  Five units sold here last year, with closings at $185k on the low end and $260k on the high end.  There wasn’t a single sale in this complex for 2015 (per MLS), and as of today there is just one active ($184,900). While I generally find myself concerned about inventory at the higher ends of our market, the best possible scenario for current owners in these sorts of associations is to see very little inventory.  These markets exist in a vacuum of sorts, as sales at Bayside Pointe really only matter to Bayside Pointe, just as Willabay sales only matter to Willabay. There is little crossover here.  The inventory is now low, which is difficult for buyers but fantastic for current owners.

Willabay Shores is just down the road, closer to the lake. It’s walking distance to the water, and it’s walking distance to the little stream that pushes through the Williams Bay beach where I first discovered Snapping Turtles. Willabay sold 11 units in 2016, nearly double the 2015 production of six. Currently, there are just three active units per the MLS, which again, creates a fantastic climate for current owners. In all, a remarkable 2016 for Willabay. Prices ranged from $130k to $217k, which is the typical range here, though some units with slight lake views can push upwards of $275k.

In Fontana, Abbey Hill has long been one of my favorites. It lacks the proximity to the lake that these other developments can claim, but the architecture is unique and I find it to be rather engaging. There were two sales in 2016, down from four total in 2015. But this isn’t a problem, it’s just a function of lower inventory. Currently, not a single Abbey Hill unit is offered for sale on our MLS. Again, that’s not wonderful news for buyers looking to consider Abbey Hill,  but it is the perfect climate for existing owners to discover some appreciation.  Don’t forget about Abbey Hill- if you’re a buyer in the $200k range seeking some sort of Lake Geneva vacation home, you should be asking me about Abbey Hill.

If you like Fontana but need to be closer to the scene, then the Abbey Villas are for you. The development doesn’t allow dogs, so that’s tough on some people, but the development is close to the beach and you can walk to your morning coffee, and that’s something.  10 units sold here in 2016, with closings occurring from $165k to $255k. No harbor front units sold in 2016. The 2015 volume stalled at six total sales, so 2016 is a win no matter how you look at it. Today, the inventory is following the same pattern as our other market participants, with just two units available in the MLS, and one more pending.  The Abbey has the highest association dues of any of these properties, so that’s something to consider if you’re looking to vacation on a relative budget.

Vicki Hansen is my assistant who handles all of these associations for me, and if you’re a buyer or a seller, there’s no better choice for representation.  Buyers tend to shy away from Lake Geneva if they find their budget doesn’t match up with our lofty lakefront prices, but those who wish to find themselves part of our scene for $200k or so would do well to discover these four associations. Expect 2017 to be a solid year, but as with our current prediction theme, if inventory doesn’t build then we’ll see more appreciation this year, and less overall volume.

 

Image courtesy Matt Mason Photography, a Lake Geneva wedding photographer. 
Geneva Lake Access 2016 Market Review

Geneva Lake Access 2016 Market Review

The most economical lakefront home to sell in 2016 was an odd little house in Knollwood. $1,075,000 was the required minimum price for 50′ of frontage on Geneva Lake. Farther up the road in Knollwood, the most economical lake access home of 2016 sold for $69,000. Those two entry points won’t let us assume that Knollwood is a lower end association, because that’s not at all the case. Knollwood is a beautiful association that boasts what I believe to be the nicest large association lakefront park on this entire lake. But in 2016 if you were looking to eek onto the lake, Knollwood was in focus, and if you wanted to eek into the lake access market, you had no choice but to keep your eyes on Knollwood.  This post isn’t about Knollwood.

The lake access market had a solid 2016, though in comparison the lakefront market itself fared much better. In total, there were 77 lake access homes sold in the MLS, the most economical being the $69k Knollwood cottage, the most expensive being my off-water estate in Loramoor with 3 acres, pool, slip, large house, detached garage with studio, water feature, gated entry, etc and etc, at $1.625MM.   The lowest price paid for a home with transferrable slip was in Wooddale, that of a brick Arlington Heights-esque ranch that sold in August for $330k. The highest price someone paid for a lake access home  home without a slip was $800k in Geneva Manor. In total, 12 homes with slips or private piers sold last year. I sold four of those.  A few more with available ramps or buoys sold.   2015 recorded 68 lake access sales, so by any measure our 2016 was a fantastic year.

Of the 77 sales, five closed at $1MM or more.  In that upper bracket lake access market, some things were made obvious not because of what sold, but because of what didn’t. This year offered ample, rare inventory in that segment, with homes available in Glen Fern, Black Point, The Lindens, and Academy Estates. These homes lasted through 2016 and closed the year unsold, or expired. The inventory in these associations was in the low million range, and the availability of these homes was something that the market wouldn’t typically take for granted. A home one off the lake in the Lindens would be desirable, no matter the condition. Yet the market pushed back and these homes failed to sell. What is the takeaway from this? Well, for starters, if buyers are going off-lake in the million and over range they’re expecting something pretty special. Like the Loramoor property, with a slip and a pool and big lot and big, newer house. Or something unique like my immaculate, gem box on Oakwood that I sold in Glenwood Springs for $1.1MM. Give the buyer something unique and rare and they’ll buy it. Give them a $1.3MM fixer upper built in the 1970s and they’re going to take a pass, unless the lot is somehow so incredible that a tear down is warranted.

That 2016 sold inventory included two entry level cottages in our lakefront cooperatives. A small home in the Harvard Club sold for $510,500 and a cottage in Belvedere Park sold for $411k. The Harvard Club had a slip, but Belvedere Park has all-year municipal water and sewer service, so you can pick which one you’d rather have. Nothing sold in the Congress Club, though inventory existed there for most of the year.  Foreclosures were not common in 2016, but at least two homes did sell as REO,  though both were crappy and smaller and sub-$150k.  I don’t suspect foreclosure to play any sort of starring role in 2017 either.  Of note, 25 of the 77 sales were marked as Cash closings, which I find a bit surprising. Rates were remarkably low during 2016, and I would have expected more buyers in this range to take advantage of those rates. Instead, 1/3 opted to pay cash, which proves the strong position of many Lake Geneva buyers.

For 2017, we’re low on inventory. There are just 36 lake access homes available as of this morning. That’s a low tally, especially when you consider that seven of those are priced in excess of $1MM. Our core lake access market is the $450-750k home with a slip, and of those there are just three available.  Because of this inventory condition, the lake access market will follow the lakefront market for 2017 and find itself heavily dependent on adding quality inventory. If we can add inventory in the first quarter, we’ll have a solid year. Interest rates are rising but they aren’t rising enough to squelch the desire of city families to spend their weekends in a different state of being. Expect the lake access market to have a quality 2017, but volume will not reach 2016 levels. Much of the remaining inventory is now aged, so there is plenty of value lurking in the available homes. If you’re hunting for value, I’m happy to be your guide.

 

Geneva Lakefront 2016 Market Review

Geneva Lakefront 2016 Market Review

29. It might sound like a lot, or it might sound like nothing at all. If we have 29 quarters, we don’t really even have enough money to buy a lunch at Culver’s. But then again, I’m currently battling towards the world’s most amazing physical transformation, and so I’m unable to go to Culver’s. This is difficult. If we have 29 electoral college votes, we still have nothing. But if we have 29 cars, we’d be considered to be a collector, because who, if not a collector, has so many? If we have 29 children, we’d have lots of children and we’d have a television show. But if we have 29 cousins, no one would really care. A show called “29 Cousins” wouldn’t really raise an eyebrow. But we don’t have 29 of any of those things, we have 29 lakefront sales on Geneva Lake in 2016 and we should all be very proud of that total.

Those 29 sales (that link won’t include the vacant land sales) represent a slight decrease from the remarkable 2015 tally of 31, but the reality is that both years represent about as much volume as this market can potentially muster. The 29 sales from 2016 included one home in the South Shore Club ($2.75MM), and three vacant lots. For the purposes of this morning, we’ll include the vacant lots as we average out the increasingly antiquated Price Per Foot metric. I dislike this method of valuing properties, but that’s only because I feel it fails to properly account for the compression that exists when frontage increases beyond 100 feet. The results are skewed by a larger number of entry level sales as those properties with 50 or so feel tend to sell $25-30k per front foot, while 100′ lots with barebones homes tend to sell around $20k per foot. Even so, let’s consider the PPF.

In total, 2919 feet of lakefront sold this year. That’s roughly 2.5% of the entire frontage on Geneva Lake. That’s no small number. We sold a total of 2713 feet of frontage in 2015.  During 2016, we sold $72,372,000 worth of lakefront proper, bringing our price per foot to a whopping $27,193, or an 8% increase over the 2015 average of $25,161. That number is high, but it’s not reflective of the actual value of a foot of raw frontage. The number is bloated this year for two reasons. First off, we sold seven lakefronts under $1.55MM, and those entry level properties tend to sell at a higher PPF. Secondly, we sold four properties over $4.25MM this year, and those four properties alone averaged $40,298 per front foot. They averaged this lofty number because three of those four were fantastically beautiful homes that carried a premium for their quality.  If you were to ask me for the value of a 100′ lot of reasonable size, I’d point you to the two sales on Lackey that prove out a value closer to $20k per foot than $27k per foot.

Of the 29 sales, I closed 10 of them. To put it a different way, of the $73,172,000 worth of lakefront that changed hands this year, I was directly involved in nearly 50% of that volume. I bring that up as I see some other agents’ advertising and it seems as though there’s still some confusion as to who leads the lakefront market. Anyway, the simple reality of 2016 is that it was a complete and utter success for the lakefront market. Most notable in the volume is the activity at the very top end of our market. The two sales, both my listings, that closed for $9.950MM and $7.35MM, proved that we have strength in our upper bracket, but it also proved that in order to find those buyers the product must match an incredible home on an estate sized parcel of land.

I also found the existence of entry level inventory to be curious. After several years of strong sales in this segment, we printed another six sales under $1.55MM. The lake proves that just as soon as we think we’re going to run out of a particular type of inventory, we don’t. When we think the last 100′ lot with a junky house has been sold, we see more 100′ lots with junky houses come to market. When we think the last 50′ lot for $1.25MM has sold, we sell another 50′ lot for $1.25MM. The market has a way of letting people catch up to it, so long as the buyers are patient and wait for the inventory that matches their desire. 2016 was a terrific year, but it wasn’t necessarily unexpected. I thought the year would be solid as long as inventory presented, and that’s exactly what happened.

For 2017, we’re facing higher interest rates and severely limited inventory. The rates should have some negative drag, but gains or stability in the stock market will offset that. Inventory will be the problem of 2017, as we start the year with just 13 true lakefront homes for sale. Of those, I have an offer being negotiated on one of them.  The result of this low inventory will be higher priced listings, as sellers who don’t really care to sell will likely price their homes at prices that reflect their lack of motivation. This could be a problem for 2017, but I’m guessing we’ll add enough inventory to see volume totals in a  reasonable range once this year ends. Will we sell 28 lakefronts again? Not likely. But can we get to 20?  You bet. The key in this market is for buyers to understand that even though prices have escalated, there is still value to be found. Much of the inventory that remains is now aged and buyers may have the ability to negotiate sold value. That is, assuming, they’re working with the right agent, and if you’ve just finished reading this, then you already know who that is.

Geneva Lakefront Condominium 2016 Review

Geneva Lakefront Condominium 2016 Review

Over the course of the next few weeks we’ll discuss how 2016 treated the various segments of our vacation home market.  We know the year to have been a good one for these markets, but we’ll avoid the vagaries and dig into the details.  If you wanted vagaries, you could just visit the Facebook page of your favorite Realtor, assuming that I’m not your favorite Realtor, and if not, when what have I done to deserve such a low level of favor?   The markets we’ll cover will include the following segments:  Lakefront Condo, Lakefront Single Family, Lake Access Single Family, Geneva National, Abbey Springs, and the secondary condo markets comprised of Willabay Shores, Bayside Pointe, Abbey Hill and the Abbey Villas. Let’s get started.

The lakefront condo market has been covered in depth here. Unfortunately, even as I grasp the other markets with remarkable clarity, I have been routinely dumbfounded by the behavior of the lakefront condo market. I don’t know, exactly, why the market has stalled even while the adjacent markets have excelled.  I’ve speculated that perhaps it’s due to a shift in demographics. Younger buyers, more city buyers, those who don’t want to come to the lake to share a hallway.  Even today, eight years after the start of the last housing crisis, I’m not entirely sure why this market has failed to find favor.  With 2016 now closed out, it’s clear to me that the lakefront market has remained an enigma, and the market remains stalled.

Perhaps it’s inventory that creates the problem. After all, if nice things come to market they generally sell, whether they’re condominium or single family in nature.  I sold a beautiful condo at Eastbank for $1.2MM in 2015, but that condo was recently renovated and  absolutely, entirely turn key.  So is it purely a condition of the condition? If a unit is beautiful will it sell?  Does this buyer pool just detest the thought of renovating a confined space?  If we look to the 2016 condo sales, maybe there’s a clue.

In total, the lakefront condo market closed 8 units. That’s not terrific, but it’s not the worst thing, either. A unit at Vista Del Lago sold for $362,500. That’s troubling for Vista, as the development offered several nice units throughout 2016 and yet the only sale was in January of 2016, meaning that likely wasn’t even a 2016 contract, rather a carryover from 2015.  Geneva Towers had one sale at $644,500, a fine number for a reasonably decent condo there. Somerset, a small condo association just south of downtown Lake Geneva had two sales last year, one of a short sale for $725k (though I’m assuming the buyer had additional costs associated due to the way the MLS details are written), and another unit for $1,085,000. That was an upgraded unit, and any buyer considering entry level frontage would do well to consider available inventory at Somerset and at Eastbank.

Working West, Williams Bay had two lakefront condo sales, both at Bay Colony. One of a wonderfully renovated unit, one of a unit with more basic, older finishes. The upgraded unit had sold for $600k back in 2005 when it was in original condition. That buyer then renovated the unit and sold it, after years on market, for $510k in early 2015. That same unit sold for $525k in the fall of 2016 and that, in a nutshell, is the situation with most condos on Geneva Lake. Even in terrific condition they aren’t able to sell for their 2005 valuations. The other unit in that building sold for $415k to a buyer represented by yours truly.

In 2002 I sold a three bedroom condo in Fontana Shores for $427k. That was, at the time, a nice sale for the building and a nice sale for me. That same unit just sold in 2016 for $421,750.  The last owner kept that condo for 14 years and lost money on it. During the same period, a private lakefront home may have appreciated by as much as 50-75%. Lastly, my sale at Stone Manor. At $5,995,000, it was the most expensive condo sale in our market, and likely the most expensive condo sale in Wisconsin, ever. But it’s less condo and more residence, so I won’t dwell on it here. You know it sold. I know it sold. And that sale has no effect on the remainder of the non-Stone Manor condo market here.

12 months, 8 sales.  2015 fared only slightly better, with 9 prints for that year.  There were 11 sales in 2014. But none of this particularly matters. The take away is that the market remains in a difficult way, and I don’t see any catalyst that will change that. If entry level lakefront prices rise, and that entry level inventory remains low, then perhaps the condo market will benefit.  But what I think we’re seeing is a shift away from the condo model and towards single family, and the only thing that might interrupt that shift is rare value or rare inventory.   2016 should be a solid year for the lakefront condo market, but in this context I think sold would mean 7 or 8 sales in total. To expect more would be to expect a change from the status quo, and the condo market hasn’t proven it’s capable of anything but.

Happy New Year

Happy New Year

I hate Luke Bryan. First of all, he has two first names.  A better name would have been Luke Bryant. Like Kris Bryant, without the ring and with the T.  I hate him because he sings ridiculous songs, songs that I cannot name and songs that I cannot hum. Bro-Country songs. I don’t know any of his songs. He throws his voice when he sings, like he’s trying to be someone else, like he’s trying to sing anonymously.  He’s a country Elvis, which is not to take any shots at the real Elvis who also sang a bit of country. I hate him because of his name and because of his voice but mostly because I don’t like the way his album cover looks whenever when of his songs cycles into my Pandora. I can’t Thumbs Down fast enough. So there, I hate Luke Bryan for no real reason, but for all of the other ones. Ceasing pettiness was not one of my 2016 resolutions.

But Luke Bryan has a song on the radio where he tells us that 60 seconds felt more like 30, and that is something I can agree with. 2016 is over and it flew by.  This year, the year that was so hated by the media, so hated by Memes, so difficult for so many reasons, was a pretty good year to be Dave Curry in Lake Geneva. It wasn’t without difficulty and stress, and there’s a headache that I now get that doesn’t let go for a few days at a time, but on balance the year was a terrific year. For all of the celebrity deaths in 2016, every member of my immediate or extended family made it from the first day to this, nearly the last day.  Perhaps this was because the year passed so quickly, in record time, and because of that no one really found the time to die.

On the business side of 2016, it could not have been better.  A good year in real estate is wonderful, but it’s so fleeting it’s hard not to find some discouragement in the face of all the delight.  I started selling real estate in 1996 when I was just a kid.  While my friends went off to college, I just drove a half mile from home to a real estate office and sat there wondering what I should do. I was intimidated by the sound of a ringing phone.  Once I decided that on fall Sundays there would be women shopping at the store next to my office, and the men must be sitting in their cars impatiently waiting for their wives to buy something with Lake Geneva written on it or carved into it. I thought the men would be bored and might want to watch the Bear’s game. This was back when people wanted to watch the Bears play. So I found a half sheet of plywood and scratched “BEARS GAME ON INSIDE” onto it and faced it towards the road. I turned on the tube television and adjusted the rabbit ears to get the least snowy signal I could. No one ever came inside, and that was a terrible, awful idea.

From those days in 1996 until the end of 2009, I sold around $50MM in real estate. All the while I had a family and houses and mortgages and insurance payments and bills for ads in local newspapers that never worked.  That tally matters, because those were the years where I learned what to do and how to act. I learned what to say. I learned how to fail. I learned the market and the roads and the associations and the way the water looks in the morning as it laps against the rocky point where Fontana meets Williams Bay. Those were the years that mattered more than these years. I’m humbled to write it, and uncertain as to why it happened and sheepishly proud that it did:  My 2016 sales volume was in excess of $62MM. Over the last 12 months I sold more real estate than I did in my first 14 years.

I became so accustomed to working from behind, to thriving as underdog, to wishing for some success that I had no business expecting, that now I feel a bit awkward here. I hear the praise from people I know and from others I don’t, and I don’t know exactly what to make of it. $62MM, after all, is a Walworth County all-time record, and a number that leaves my nearest single agent competitor with less than half of that volume.  I was thrilled to represent either the buyer or seller in 10 of the 26 lakefront closings during 2016, and sold 5 of the 6 lakefronts that closed over $3.9MM.  Per MLS (1/1/16-12/30/16 Walworth County sales), my personal volume was more than the 37 agent @Properties office in Lake Geneva, nearly double the production of the entire Rauland office, roughly quadruple the production of the entire D’Aprile Fontana office, and more than any individual office in Walworth County excepting one. I kind of hate writing all that, but I spent fourteen years being told that the small office can’t be as effective as the large office, so I can’t really waste this opportunity.

Does this mean I’m somehow at the top of this game? Does this mean I have no where to go but down, to slowly fade away as someone who was once pretty good at something but no longer subscribed to the process that brought him there? It seems as though this could be the case, that I might indeed just stall here at this lofty height and realize I never learned to land. But the reality of it is I know this success has very little to do with me. I know I’ve been blessed. And I know that without clients and customers trusting me for their Lake Geneva decisions I would mean nothing to the Lake Geneva market.

So today I thank you for your loyalty. I thank you for reading this drivel. I thank you for recognizing that many days and weeks I have nothing really to write about, but I try to do it anyway. I thank you for trusting in a kid from Williams Bay, who never aspired to do very much but always wanted to matter. I thank you for helping my business grow. Where it goes from here I can’t say, but I know it’s a struggle to stay at the top of anything, no matter the profession and no matter the year. I’ll keep trying, I’ll keep working, and I’ll be here if you need anything. If I’m your agent already, a most sincere thank you. If I’m not your agent yet, this is me begging.

Here’s to us, to Lake Geneva, and to a new year with more time spent at the lake.

640 Linden Sells

640 Linden Sells

Earlier this year, I sold a house on Harvard Avenue in Glenwood Springs. It was a decent old house, but more old than decent. It was the sort of house that one family loved for generations, the old bathroom and tiny kitchen quaint reminders of a time long since passed. But new buyers lack the nostalgia that makes old carpeting and small kitchens seem desirable, and so the house lingered on the market for quite some time. Eventually, the house sold because the price succumbed to the market. I sold that charming old house with the small kitchen and  private pier for $535,000 in May.

Yesterday, I sold another old house with private pier on Harvard Avenue in Glenwood Springs. This address was on Linden but the house faced Harvard, and the lake, and so it was more Harvard than Linden no matter what the address rigidly insisted. The house had been lovingly embraced by the same family for generations, much like the other house.  This house had a high pedigree, original old floors, a huge fireplace in the great room, an ample and right screened porch. When I first toured that home with the owner, I saw that fireplace and I saw that porch and I knew that the home would sell.

I listed it for $899k in the fall, and then I told you about it and I told you it would sell. Yesterday, I sold the house for $871,250. The sale, nice for the market, nice for the seller, nice for the new buyer. It’s a nice house, and a terrifically rare example of a well kept vintage home. It was a house that I was proud to market, proud to show, proud to close. The buyer of the other Harvard house, the one I sold in May for $535k, well, he liked the price, too.

Glenwood Springs is a fun association, and for all of its cramped nature and congested lakefront, there’s a feeling that accompanies a summer visit to that old association. It’s a feeling that you can’t quite explain, one you can’t quite understand. It’s a feeling of something old, something trusted, something that feels unique and rare because it is. Glenwood Springs isn’t the only lake access association that evokes that feeling, but it’s one of the associations that accomplishes that with the least amount of effort. In that, a lake house in Glenwood Springs is something that we can all appreciate.

Lackey Lane Sells

Lackey Lane Sells

At one point earlier this year, there were three homes for sale on Lackey Lane. Lackey, in case you haven’t the pleasure of wandering down that lane before, is a dead end street with a handful of homes on it to the west of the Birches. The street is unique in this market. It’s a dead end, which is always a positive here as it makes it more awkward for strangers to commit to a wandering, gawking drive.  The lakefront is level, the location on the lake creating a slight bay that keeps aggressive boaters at bay. There is little I don’t like about this street. Little not to celebrate. And that’s why there were three homes available earlier this year and as of today there are none, and I’ve sold them all.

First, the beautiful home at W3818 Lackey. I sold that home in June for $4.275MM, and what a home it was. The new owner is happy there, which makes me happy, and the street, though it possessed a history of selling in the threes, had a print in the low $4s that it needed. This print is important as it shows there is a path to value in that range, and the few tear downs that remain on the street now had an angle. Buy one for $2MM or less, build a new home for $2MM or so, and you’ll be secure in your value. This seems easy to do, but it’s not as easy on this lake as you might think.

Next, I sold the small brick ranch on 100 level front feet at W3846 for $1.91MM. Again, the value makes complete and utter sense, and not only when you consider that price per foot is just $19,000. The street can support built value, and if you’ll drive down that lane today you’ll see the foundation of a new build where the old Arlington Heights ranch had previously stood.  That was a nice sale, a  terrific value, and a new place on the lake for a long time Lake Geneva family.

Yesterday, I knocked over the last Lackey domino of 2016. W3852 Lackey closed for $1.925MM, to a delightful young family who saw what the prior family saw: opportunity to grab rare land at a very attractive price. The street now will do one of two things. It’ll either quiet down while the new owners make their mark in that dirt and along that shore, or it’ll see another offering or two as existing owners who may have an eye towards a someday sale see the value and demand that is obvious on their quiet little lane.

Coincidentally, two other lakefronts closed yesterday. One in the dead center of the Narrows, that of an older house with unremarkable attributes and a 100′ lakefront lot. That closed for $2.485MM. The other closing was in the same neighborhood as these others, but this home was immediately adjacent to a very busy boat launch. I can change out an old sink if I don’t like it. I can buy a new range if I want a shinier model. I can lay hardwood where there is now carpet. I can nail on shingles where there was vinyl. I can do lots of things to my new lakefront house, but something I can never, ever do is move a boat launch. $2.899MM was the print for a home with shiny finishes and a municipal launch for a neighbor. These sales bring the lakefront sold tally (MLS) to 25 for 2016, and I’m proud to say I’ve been involved on either the buy or sell side (or both) in 10 of those 25. That’s not bad for a kid from Williams Bay.

To the new owners on Lackey, a big congratulations. I’m never unaware of the reality of my business. I can sell lots of homes one year and very few the next. I could do this work for another decade and find success, or I could be cast aside as an insignificant blowhard who writes about Christmas trees and my grandmothers and pontoon boats. I understand that buyers and seller alike have myriad choices for representation in this market, and I’m always grateful to those customers and clients who choose me as their agent. I’d like to think I’m a bit more fun to work with, and I’d like to think I have better insight into the market (I’m actually certain of it, but humility), but mostly I’m just happy that my sale yesterday represented incredible and lasting value, and in that, I’m content.

Lake Geneva Market Update

Lake Geneva Market Update

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

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

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

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

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

 

Above, the new Shore Haven listing for $749k. 
1014 South Lakeshore Sells

1014 South Lakeshore Sells

The most important lakefront home I’ve ever sold is 1014 South Lakeshore Drive in Fontana. I sold that home for the first time in 2010 for $5.885MM. At the time, it was the largest sale I had ever completed, by a factor of at least two. It mattered, this sale, it mattered a whole lot. The fact that I sold the home owned by the owner of our largest local brokerage was something that people noticed, and it helped propel me to the volume that I’ve been pleased to represent since. Last week, I sold that home again. This time for $7,350,000, and as you could imagine, the sale matters this time around as well.

I first listed that home two years ago and received an offer within a few months of the initial listing. That offer didn’t come together, and then the property sat on the market for all of the following year.  The reason it languished for some time is simple: when buyers are looking to spend $7.95MM they are expecting perfection, and any slight blemish that might interrupt that perception is cause for rejection. And so I worked and I worked and then over the summer a new contract, a new scheduled closing date, a new buyer on the line for 1014 South Lakeshore.

In the months that followed there were plenty of ups and downs, other buyers wishing to buy the house came forward, and the house that I couldn’t sell for nearly two years became a house I could have sold two or three times. The market turned, buyers at the higher levels materialized, and 1014 South Lakeshore became a house that was no longer just an expensive house in Fontana. It was THE house in Fontana. Last week it closed, and I remain eternally grateful to the seller who has trusted me with so many lakefront purchases and sales.  Loyalty is a frail thing in real estate, and when a client remains loyal over a fifteen year period that’s a special and unique thing. To that seller I owe much, perhaps a career.

Another sale last week, this one with more intrigue. In November of 2015 pier 514 sold for $3.95MM. It was a nice sale, a good market price for 186 feet of Fontana frontage spread out over 4 acres.  That lakefront just sold again last week, this time for $5.45MM. There is no typo here. There were no improvements done to the house, unlike the sale at 1014 that underwent a supreme facelift and renovation over the years since the 2010 print.  Pier 514 just sold for $1.5MM more than it sold for last year. 12 months, 38% appreciation.  Wow.

So did the market move that much? Of course not. To suggest it did is pure insanity. The market didn’t move more than a few points, but some buyer from somewhere, perhaps a buyer with a penchant for filming Lincoln commercials, that buyer thought $5.45MM was a reasonable ransom for that large property.  Do I think that buyer overpaid? It doesn’t particularly matter, because if a buyer wanted 186′ in Fontana with 4 acres of woods, there were no other options. Personally, I like my sale near Pebble Point with 181′ of frontage and 4 acres for $3.93MM much better, but that’s just me, and I’m value minded.  For the market, it’s a terrific sale, for that buyer turned seller, a magnificent maneuver in a typically stodgy market.

Another week, two more sales, both over $5MM. I wasn’t involved in the lower priced sale, but 2016 has now seen six lakefront properties print over $3.9MM. Of those six, I’ve represented either the buyer or seller in five of them. Those sales have helped push my sales volume over $56,000,000 on the year, and I don’t mention that to be vain. I simply mention that to prove a point. If you’re a lakefront buyer or seller with a Geneva focus, now we both know I’m the guy for you.

Geneva National Market Update

Geneva National Market Update

Every segment of the lake access and lakefront market has activity. If you list a $69k shed in Knollwood, like the one that was listed last week, it’ll sell (and it already did). If you list a $10MM house on Pebble Point, it’ll sell,  assuming you list it with me (and they did and then it did). If you list a house with a slip for $600k, it’ll sell, and a $2MM lakefront tear down? Sold.  Most segments of our non-lake access vacation home segment sell with some regularity as well. A farmette with 10 acres and a neat old barn will sell to a couple from Bucktown who have already grown tired of the 606. A condo at Abbey Hill will sell to someone who wants a Fontana vacation getaway on a budget. Everything sells, no matter what. Unless it’s in Geneva National.

As of this morning, there are 31 available properties within those gated confines listed for more than $500k.  Those are single family homes and traditional condominiums, though obviously the vast majority are of the single home variety. The homes are nice, often possessing fancy appliances and fancy trim, sometimes, usually, at least one gaudy chandelier that screams 2004.  Some of these homes are newer, some are original dinosaurs built in the early and mid 1990s. The thing about homes built in the 1990s is that if they haven’t been substantially renovated, they’re really quite lame.  Geneva National, in spite of an incredible year in the lake access market surrounding Geneva, remains plagued by pockets of heavy inventory.

So far this year there have been just six sales (per MLS) that closed over $500k. It’s mid-November, and without a single pending property in this price range, it’s likely GN ends the year stuck at six.   All of 2015 registered just seven such sales, so six isn’t such a let down, it’s just that it isn’t a market undergoing a solid recovery, it’s a market bogged down by too many sellers thinking this is the time to sell. The numbers are telling us a different story- this isn’t the time to sell.  In 2006 there were 19 sales in GN over $500k, so if you’re looking to sell in this price range, 2006 would be a good place to visit.

But this is unfair, unkind,  and it isn’t the fault of would-be sellers. It’s not the fault of the Realtors. It’s not entirely the fault of golf and its dwindling numbers, even though we’d be foolish to suggest that the decline in golf’s popularity doesn’t have something to do with this. No, this is simply a matter of supply and demand, and Geneva National has, and likely will always have, too much supply. It’s not that the homes there aren’t beautiful, as many are, and it isn’t that the development isn’t one of the most aesthetically pleasing you can find- it is. It’s just that there are too many homes there, and when the built inventory requires more buyers than the market can produce, you’re going to have stagnant prices and tepid demand.

Demand creates demand, this is obvious. More buyers bring more buyers, it’s just the way real estate is. But when you can’t create demand, and you can’t convince a buyer that they had better act soon or they’ll miss out, then what is left? Just a bunch of nice enough houses on nice gated streets. Certain styles of homes will still sell. Those homes that are architecturally unique or otherwise interesting, those will find buyers even now. But the vast majority of homes are going to struggle to find buyers, and that’s exactly what’s been happening over recent years.

I love Geneva National, I really do. I’ve built in GN, remodeled in GN, bought and sold in GN. I enjoy the golf courses immensely. But even in this environment of super low interest rates and broad market demand Geneva National has faltered, and I don’t know what it’ll take to bring it out of its funk.  Sadly, the only fix for Geneva National’s upper bracket housing market is more buyers and I don’t mean seven per year.  Does this slowdown create opportunity? Of course it does, but unfortunately, as long as this inventory remains inflated GN won’t experience a full recovery.

Veteran’s Day

Veteran’s Day

I grew up in Williams Bay.  I remember my older brother wore black in 1992 when Bill Clinton was elected. No one cared that he did that, because he wore black and he went to school and then he went home and he mowed a few lawns. That was his protest. In 2010 when Scott Walker was elected Governor of Wisconsin, I drove to a small bar on the North Shore of Delavan Lake and ate some cheese curds with a friend. This was our celebration. The next day, I woke up and went to work.

This week, a new president.  A peaceful transition of power now underway, in spite of the protests of those whose protest is akin to marching with angry shouts towards the sky, decrying the clouds.  I am optimistic for our country, just as I was optimistic after every presidential election of my adult life. Maybe things will change, maybe they’ll stay the same, maybe the government will spend a little less time in my business and more time letting me go about it. Maybe things will be the better or stay the same, maybe the kids who protest will do as I’ve always done.  Wake up, brush my teeth, shower, and put my head down in hopes of accomplishing something.

Will this election somehow skew our real estate market? Will it turn a good thing bad?  There’s no way to know that, but I cannot see how a free-market thinking president will spoil a solid run in the luxury real estate market. Will there be pause in our markets one of these days? Sure. Would that pause occur no matter who was elected last Tuesday? Of course. For now, I look for a stable stock market, and excepting the after-hours trading Tuesday night,  we’ve had just that. I look for fiscal policy that attempts to reign in spending, and we theoretically have that in aim.  Will some Lake Geneva revelers be sad over this election? Yes. Will some be happy? Yes. Will the water still be clear and the sky blue and the market prized for its remarkable strength? Duh.

This week, two closings. One at Stone Manor. The ground floor unit at Stone Manor, the unit that I first listed two years ago, has closed. The price for all those square feet in that building that Otto Young built? $5.995MM.  I assume that sale is now the most expensive condominium to ever sell in the state of Wisconsin. But that’s an assumption because I don’t particularly care if it is, or it isn’t. It’s a terrific sale for the lake and a terrific sale for the owner of that iconic unit. I was pleased to represent that family in the process.

Another closing, that of my large off-water listing in Loramoor. $1.625MM was the print for that large parcel with boatslip, swimming pool, auxiliary garage, and loads of square footage. That was a rare offering in this market, the unique off-water home that plays like a small estate but still offers the owner lake access and a slip on Geneva. It’s a nice sale, and I was happy to be involved.  As a staggering aside, those sales have pushed my 2016 sales volume to nearly $49MM, a total that represents an all-time annual high for Walworth County. The next closest “competitor” has tallied just over half of that total. It’s humbling and unexpected, and I’m not dumb enough to think I’d be in this strata if not for my clients and customers who trust me with their Lake Geneva moves.  I enjoyed playing the underdog so much I’m not certain how to react to the blessings of this year, but I think I’ll just keep my head down and work.

Finally, Veteran’s Day.  A sincere thank you to every veteran who has ever served. It’s a sacrifice that I didn’t make, and a sacrifice that very few I know have made.  The only sacrifice I made this week was in ordering a John Deere Gator and NOT opting for the front storage rack.  I’m thankful for those who have bled and died so that I can worry about selling condos at Stone Manor, and worry about boatslips and association rules and limited inventory. What a pitiful list of things to worry about. Thank you to our veterans who gave their time and their lives so that college kids can weep in the street and so this kid can pursue his dreams in Williams Bay, Wisconsin.

Pleasant View Sells

Pleasant View Sells

No, this doesn’t mean your cottage with lake access is going to sell for $1.1MM. It doesn’t mean that small cottages with views and private piers are always going to sell quickly and without particular trouble. But it does mean that a perfect cottage in a perfect location with a perfect little pier and a perfect view just might sell. That’s why I closed on 434 Oakwood in Glenwood Springs last week. Because it’s a perfect cottage and perfection will always find a buyer. Congratulations to the new buyer for securing a most unique piece of our vacation home market.

 

 

Geneva Lakefront Market Update

Geneva Lakefront Market Update

The way I see it, any buyer of a lakefront home here has two options. You can buy for now or you can buy for later. If you’re buying for now, you’re buying something that’s done, something that’s ready, something that makes you happy. That’s a house that already has a coffee table where you plan to put a coffee table, and the tile of the kitchen backsplash is the same tile you would have picked if you were the one tasked with the picking. Or, you can buy for later. You can buy because right now you’re not ready to pick the tile, but you are ready to secure your piece of this scene. You’ll be more ready next year, even more ready the year after, but you see what you know you like and you buy it because the property is all that matters. Who would buy a house based on backsplash tile?

Contrary to popular opinion, I do not necessarily prefer one approach over the other. If you can find what you love and it’s done, buy it. If you can’t find what you love, build it. And if you’re ready to buy now, buy now. If you’re ready to buy next year, buy next year. But a particular hybrid of that buyer is the one who knows he can more easily afford to buy next year, but he finds what he loves and he buys now instead. That’s conviction, that’s bold, that’s the sort of buyer I tip my hat to. Also, I think I might start wearing a cowboy hat. It’ll be hard to wear it in an un-ironic way, but if I stick with it I think people will come to appreciate that hat.

The lake this year has had plenty of  buyers, those buying for now, those buying for tomorrow, and those buying now because they don’t think they’ll find the same options tomorrow.  YTD we’ve sold 16 lakefront homes. That’s a very respectable tally, though it falls well short of YTD 2015 which had 23 lakefronts trade by this date. What’s different this year is we have 9 lakefronts pending sale as of this morning. That’s a whole lot of lakefront activity, and it’s wonderful. Last year we added another 7 lakefront closings between 10/26 and 12/31, bringing our total (including Glenwood Springs first-offs and the South Shore Club) to 30 on the year. This  year, it’s more likely that we end up around 27 or 28, but that’s still a most astounding total.

What makes it so incredible is the cycle of lakefront buyers. Typically, one high volume year is followed by a lower volume year, as buyers who buy are not always replaced with more buyers who buy. In my business, if I have a terrific year it’s usually followed by a less terrific year, because I’ve spent through the buyers and sellers that have employed me, and then I must go out and find more smart buyers and smart sellers to hire me.  That’s why the strength of the market in back to back years is far more meaningful than the strength of the market after a down year. In other words, this lakefront market, man, it’s something.

There are two deals pending in the Lake Geneva Highlands, both listed in the $1.3s. One listing is mine, so that’s good. Working up the food chain, I have a new deal on the last remaining Lackey Lane offering, priced at $1.95MM. That’s 100′ of level frontage on a quiet dead end lane, surrounded by $4MM+ homes. What’s not to like? Not coincidentally, if this deal closes in 2016 that will represent the third sale on Lackey of this year, and then I’ll have brought in the buyer for all three sales. Can you tell I like Lackey Lane?  There’s a lakefront home pending on Marianne Terrace in Lake Geneva in the low $2s,  with my listing right next door still available at a similar price. To note, my listing has undergone some nice clean up over recent weeks so if you’ve seen it already and thought it was boring, come back to see it again. It’s better now.

There’s a fresh contract on a lakefront in Cedar Point listed in the $2.4s, that of a double lot. I’m expecting this will be torn down and then we’ll see two homes built on this site. I’m just guessing, but that’s the best use of that property. There’s a new deal on a mid $2s lakefront in the Birches. I’m not a fan of that house, but it’s a big deep lot so it make sense that the market absorbed it. The Sidney Smith new construction in the $3.8s is still pending, as is my large lakefront estate at 1014 South Lakeshore listed in the high $7s. Rounding out the notable pending inventory, my Stone Manor residence listed just under $6 should be closing soon.

If there were supposed to be jitters leading up to this presidential election, I haven’t noticed any. The one thing that does help Lake Geneva during times of distress is our low volume, and our low inventory. We do not have spec activity here that drags on a market as soon as we need to take a pause. As of this morning, there are just 18 true lakefront homes available,  and that’s a shockingly low total. I expect that to remain the case through the Holiday season, which should keep buyers in the market as they search for something new to consider.