Blog : Market Updates

Lakefront Inventory

Lakefront Inventory

It feels like an epidemic. Each day starts full of hope. Each day passes choked with despair. New inventory should be here by now. But it isn’t. Why isn’t it? This is what the people want to know. The smart Lake Geneva buyers are working with me, and I’m working for them, trying to dig up shreds of inventory so that I might offer it to them on this silver platter. Despite my efforts, the silver platter remains empty, carrying only the dust from a desperate summer.

Buyers are active on the lakefront, this we know.  Lots of agents have buyers at the moment. Lots. They’re asking me for inventory. David, what do you have that I might sell? This is sweet of them to ask so nicely, but what they don’t know is that any inventory that I uncover will be inventory that I offer to my buyers first, and to everyone else last. This is why buyers should be working with me, among all of the other reasons, but still, the market persists and summer moves along and there’s no inventory.

But that’s not entirely true. There have been seven new lakefronts brought to market from June 1st through August 1st. Of those seven, I’ve presented three of them under my brokerage. The thing is, five of those seven are listings that were previously on the market. Of the two new ones, I sold my listing (Jerseyhurst, closing next month), and the other listing is an entry level home seeking a buyer (visionary).  While I do see several of these new listings selling this year, it’s obvious to admit to you that our inventory is light at best. Anemic at worst.  But how does it stack up to a typical Lake Geneva summer?

Last year there were nine new lakefront listings 6/1-8/1.  For the sake of this historical reflection I won’t be deciphering which listings were “new” new, and which were  regurgitated new.  The same two months in 2015 brought 10 new listings to market. 2014 saw 12 new, and 2013 gave us 10. For the sake of averages, the market has produced 9.6 new lakefront listings between June 1st and August 1st. If we’re trying to be dramatic, that means the 2017 inventory production is 25% off the pace.

Still, in spite of the lighter 2017 listing volume, we’re still faring much better than the 2007 market. Those buyers were truly up against it, with just 3 lakefronts listed over those two summer months. And back then, the “cheapest” new listing was $2.2MM.  So yes, our inventory is constricted. Yes, that makes it tough on buyers. But don’t for a second think it’s some sort of historical anomaly.  It’s just a bit behind the running average, and I’m confident that August and September will bring some new inventory that will satiate the market.

 

Above, the master bathroom at my pending sale on Jerseyhurst.
Geneva National Market Update

Geneva National Market Update

Ah, yes. Geneva National. The single greatest argument against Walworth County growth that I, or anyone, has ever made. Growth, it’s good, they say. It’s a necessity of life, like breathing and tacos. But it really isn’t. It might be good initially, for the mattress salesmen and the carpet installers, but over time, spurts of growth generally cannot be maintained in low population locations. There was a spurt of growth in a small town of Arena, Wisconsin. Perhaps it was Mazomanie. There’s a new commercial building on the main drag, shiny and bright. Vacant as vacant ever was. It’s for sale now, the restaurants long ago gone. Nothing there to take their place. Sure, growth dictated that the building initially be built, but the community lacks the ability to maintain the vestiges of that growth once the cycle slows. This is the problem with Geneva National.

When times are good, as they are now, things are fine. Things are never terrific, just fine. Today, Geneva National is fine. The inventory is low, which is the single best condition for GN. There are just 70 listed homes and condominiums. There are an additional 11 properties pending sale. All of this is good. What’s not so good for current owners and sellers is the pricing. Consider a little house on Saratoga. I lived on this street once. It’s a nice street. The house is listed at $599k and is pending sale. It’s the most expensive property in GN to be listed as pending sale this morning, which is a side- topic for a different paragraph. The house sold in 2007 for $750k. 10 years have passed, the market on the lake and near the water has recovered most, if not all of its losses from the past crisis, and yet Geneva National properties remain stuck.  Geneva National is struggling through the end of its lost decade.

But perhaps this is just anecdotal. Maybe it’s not all like this, right?  There’s a house on Edinborough pending sale. That’s a nice street, what a noble name. That house is listed at $347,500 and is under contract for a number that is, presumably, somewhere near that price. The house sold initially in 1995 for $375k. In 1995, lakefront homes on Geneva were selling in the $400-500k range. Those lakefront homes have appreciated 300% over the years, while Geneva National properties have found a way to decline over the same tenure.  Not good.

There are currently 11 homes listed for sale over $700k. That’s not a ton of inventory for a development this large, but it’s tough when not a single home in GN has closed (per MLS) over $600k all year. 44 homes and condos have closed this year in GN, outpacing the 38 sales YTD for 2016. That’s a good sign, but the weak performance at the top end, and the lack of appreciation at all segments is the issue here.  Last year, three homes sold over $600k, and even that was anemic. Does Geneva National offer a buyer a good value? Yes. Would I be a buyer in GN right now? Yes-ish.

I’d be a buyer of the condominiums in built enclaves. I’m not a buyer of something new in an unfinished section. This isn’t unique to Geneva National, this is my standard for any purchase, anywhere. Why buy into a segment that is possibly more sensitive to a  softening of the market? Why buy and leave your investment up to the future whims of the developer? I  like the idea of buying in stable segments with a pattern of sales that allows me to feel confident in my purchase. I want to buy something that cannot easily be replicated. Would I buy an existing house in GN right now? You bet I would. But I’d be looking for value in the sub-$550k price range, or over that I’d be considering homes that I can buy well below current replacement costs.

I love Geneva National. Because of this I want it to succeed. Sadly, the only way it will succeed is if future development stops and the existing inventory is absorbed. As long as GN keeps building new products, the existing products will find themselves in a tough spot. But growth is good, the simpletons scream.  They’re wrong, and Geneva National can prove it.

The Abbey’s Market Update

The Abbey’s Market Update

This summer, the activity in the single family market has been well documented. In fact, it’s been documented to death. Bludgeoned with exclamation marks. Cause of death? Overuse of hyperbole. But still, the market is hot and so we recognize that. We’re grateful for it. The thing is, each market is connected, each segment joined to the price range above and below it. Each style of property hinging somewhat on the performance and inventory in the adjacent market created by a different type of property.  If the vacation home segment of $250k single family homes is hot and low on inventory, then the vacation condo market in the same price range should be equally as hot, right?

The vacation condominium market is dominated here by the two large players- Abbey Springs and Geneva National. But these resort developments are so large they actually operate as their own individual markets, with little carry over from the single family market and other smaller condo developments. Strange as it may be, a $650k house in Geneva National does not benefit from the strength of the $650k lake access market. When I was a seller in GN I would always find reason to complain about this lack of  correlation. It felt unfair, but I learned to accept it and have only harbored resentment and bitterness ever since.

The two condo markets that would most directly benefit from the entry level lake access activity are the Abbey Villas and Abbey Hill. Both are in Fontana, where the heart of our lake access market resides.  This morning there are only two single family homes with lake access priced below $300k in Fontana. That’s an incredible drought of inventory, and at this date in July it’s unlikely the inventory deficit is corrected before the year ends. If the single family market in Fontana is starved of inventory, then the two condo markets that feature units under $300k should be hot, right?

Well, sort of. Abbey Hill has two available condo units this morning priced from $225-255k. There haven’t been any sales in Abbey Hill for 2017 (MLS), following a 2016 wherein two units closed.  Abbey Hill, for the uninitiated, is up the road a mile or so from the Fontana beach.  It’s an older condo complex that won’t win any particular architecture awards for the overall complex, but the individual units are quite interesting. I’ve long appreciated the Abbey Hill condominiums for their character, and I don’t expect that fondness to change anytime soon. The units are cool, and if I’m a buyer in the $200s looking for a lake-based weekend, I’m paying Abbey Hill a visit.

The other Fontana property that should be directly tied to the single family market is the Abbey Villa. This is not to be confused with the Abbey hotel condominiums, which are different and, in my opinion, not a good idea. The Abbey Villas have had some difficulty over the last market cycle, but today the recovery seems complete. Last year there were 10 sales in the Villas, closed between $165k and $255k. 2017 had has five closings YTD, all priced between $216k and $260k. There is currently just one unit available at the Villas, priced in the mid $200s. The Abbey Villas have completely and thoroughly recovered, and for that, we can all be pleased.

Two condo markets, both in Fontana, both tied directly to the single family vacation home market. Both performing quite well, as they should be. If you’re a buyer looking for a sub $300k lake home, consider these condos. Specifically, consider the Abbey Hill units. They’re affordable to own and I don’t think there’s a better value in the Fontana market. As always, let me know if I can help.

 

Fontana aerial courtesy Matt Mason Photography. 
Geneva Lakefront Market Update

Geneva Lakefront Market Update

In real estate, being shameless is quite important. I’ve struggled with this at times, most of the time, really. But I still tell you I’m this and I tell you I’m that, because if I don’t, no one will. But I’ve only developed some shamelessness when there was something to actually be proud of. Too proud, perhaps. The new market has generated so much shamelessness that you’d think everyone was the top agent.  Lakefront Specialist, that’s a common email tag. Lakefront Pro. Some opt for the shorter version, lest they spell specialist wrong. And others still, “The Most Powerful”. This is more like a Master’s Of the Universe theme, but in 2017, all of it has been adopted by my competition. It’s a bit dizzying.

The market appears to me today to be absolutely ladened with buyers. I say appears to me, because it’s impossible to know exactly what buyers are truly active and which buyers are just looking at properties because it’s 2017 and that’s the thing to do. I would guess there are more buyers in the market today than at any single point in the past 20 years. Yes, that’s a serious claim. But it’s likely accurate.  The smart ones are working with me, the others are working with the various and assorted Specialists that have very recently self-assigned that title.

Yet for all of these buyers, the market is still a Wisconsin market. We are still Midwesterners. And so we watch and we wait and we look for the right thing. Contrary to what your Specialist may tell you, the right thing is not always whatever was just listed.  This morning, there are just 22 lakefront homes available for sale on Geneva Lake. This includes the Trinke’s house that’s really just Trinke’s frontage, but we’ll add it in because we’re desperate for inventory.

Beyond those 22, there are others pending sale. A listing on Main Street in Lake Geneva in the mid $2s is soon to close. It should be noted that another lakefront in that area was under contract but has since returned to market. My marvelous listing on Jerseyhurst is under contract with a fall closing scheduled. A listing on the South Shore in the mid $2s is pending. And a small entry level lakefront in Fontana listed at $1.475MM is pending this morning. That’s a decent amount of activity, but it is not commensurate with the buyer activity on the lake.

There are several reasons for this. First, and perhaps most damning, is the absence of reasonable sellers. Note I say reasonable. The market is hot. Everyone knows this.  Even your newly minted Lakefront Specialist knows it. Sellers know it, too, and they’re attempting to capitalize on it. Sellers are listing aggressively, and we cannot blame them. But what we can do is blame them when they receive solid offers within mere percentage points of their bottom line and they choose to walk. This is foolish behavior. Sadly, this is the behavior many sellers have chosen to display. Perhaps the market run will continue long enough to prove them right, but perhaps their 2017 confidence is just a touch too much.

The inventory that deserves your consideration is both the new bits that have been trickling to market, but mostly the aged pieces of our market. If there’s a new lakefront for $3MM, guess what? You’re going to have to go for it quickly or someone else is going to buy it. That’s just the nature of this market. But if there’s a $3.5MM listing that’s been dying on the market for a year or two, isn’t this the sort of property we should be gunning for? I believe the answer is yes. Your Lakefront Specialist is reading this, furiously scribbling down notes, and he/she concurs.

So what comes next? What do we do with the rest of this superfluously soggy summer?  If we’re a buyer, we remain vigilant. We look for new inventory. We align ourselves with the only top agent in this market (spoiler- it’s me). We don’t chase every golf course hushed rumor down the rabbit hole. We don’t reach out to the new Lakefront Specialist. We just watch and we wait and when something looks right we take a run at it.  If we’re a currently listed seller, then we look at this market through a different lens. We consider our position in the market. We reduce if we haven’t had any offers in months, years. We look to position our property in the perfect light, with a hefty consideration for reality. And if we’re a lakefront owner considering selling, this is the easy part. We reach out to Dave Curry.

 

Above, my new Elgin Club lakefront listing. $1.975MM. 

 

Mid-Summer Markets

Mid-Summer Markets

This would be much easier if we weren’t here. If we were in some other absurd little Midwestern vacation home market, everything would be different. We’d have our season, and it would consist of ice cream and t-shirts and six or eight weeks of hustle. Some bustle. Then we’d have our off season, which would make up the remainder of our year. We’d have in season, off season, and that would be that. Our fingers would be sticky from all that ice cream and our t-shirts would be stained so that you could barely make out the location of that miserable little Midwestern vacation home destination.

But we aren’t there. We are here. We’re in the middle of our season now, but what is this season, exactly? Is it July and August, as some would suggest? Or is it Memorial Day through Labor Day? Is it Memorial Day through Columbus Day?  That’s a common thought, and it isn’t a terrible one. But really our market doesn’t turn off, our season doesn’t end, it just changes. We don’t close the doors, we don’t turn off the lights. We just enjoy this place with different goals in mind. The season, it’s upon us.

But this is the generic consideration of “season”. What about the market version? What about this season, this cycle? Where are we now, on this tenth day of July?  Agents are scrambling, screaming about activity and offers and counter offers and amendments. They’re excitable, this group. And there are more of them now, more than ever.  It’s easy money, so they start and they spout and they tell people things that they have no actual way of knowing. Yes, your house is worth X. I would know, I’ve been selling real estate since 2016. 

I would call this current position in our market the Mid-Summer-Pause. Sure, there’s activity. Lots of it. But it’s also taking a bit of a breather. The spring sprint has ended.  Inventory is low and refuses to grow. What inventory is present is either under contract, about to be under contract, or somehow fatally flawed and needing price reduction. I have two new listings coming to market this week, one you’ll learn about on Wednesday and the other on Friday, but I haven’t brought two lakefronts to market in one week for what feels like years.  Will buyers pay attention to the new offerings? Perhaps.

There are buyers, after all. Many of them. Lakefront buyers, lake access buyers, condo buyers, land buyers. And the sellers who have been in the market for some time now fully understand that the summer is fleeting. Even now, with summer so young, it is escaping us little by little. The days are shorter now. Shorter today and shorter tomorrow. Winter is coming. Sellers know this, and in spite of the measurable buyer traffic there are deals to be made. Sellers, in this mid-summer pause, will be reducing their prices.  Why reduce in the fall when you know the market is stronger today than it might be then?  Sellers will be considering their position in the market and reacting accordingly. At least the smart ones will.

Today, there are five lakefronts under contract. One is my listing on Jerseyhurst. Others are in the $1.4-2.8MM price range.  There are just 18 lakefronts available as of this morning, which is consistent with the inventory for most of 2017. It’s low, and we know it. But there is value in that list, even if it isn’t apparent based on the present list prices. Expect to see some reductions in the coming weeks, even as the market remains hot and buyers snap up new inventory.  There’s nothing more frustrating than being a seller who sees the activity in the market and knowing your home isn’t benefitting. These are the sellers that will reduce, and if you’re a buyer, these are the sellers you should be watching.

For now, it’s mid-summer. My arms are tired from superjetting. My nose is sunburned. And all is well.

Lake Geneva Club Sells

Lake Geneva Club Sells

There are certain things that I know without the slightest inkling of doubt. I know that summer days are best spent lakeside. I know it, you know it, remote villages in Africa know it. I know that pick up trucks should not be lifted as high as the pick up truck at the gas station right now is lifted.  You can’t know this, but you’ll need to trust me on this one. It’s just too high. I also know that when a charming cottage in the Lake Geneva Club is listed for $600k it’s going to sell pretty quickly. These things are all different but all the same. They are summer-time truths.

You knew I’d sell this cottage. It wasn’t just my intuition. It was obvious. Yet, the first few buyers who looked at it didn’t find it to be an ideal fit. So the property sat on market for a bit longer than I would have thought, and last Friday it sold. $592k for cottage perfection, a boat slip, a large double lot, and easy access into the Lake Geneva scene. The property doesn’t require much explanation, it’s just an easy cottage in mint condition with a transferable slip and membership to a fantastic lakefront association. Beginning, middle, and end of story.

But the property does give us some insight into the broader market, and that insight should be shared. I sold this cottage in 2013 for $525k.  If you’ll recall, our markets in 2013 were in decent shape, but activity was much less intense than it is today. The price recovery had begun, but only modestly. I’d guess that by the summer of 2013 the broad Lake Geneva vacation home market was 10-15% above the cycle lows.  With a fresh sale at $592k, we can ascertain that the market has risen roughly 15% since that date in 2013. If we assume that the market was perhaps 15% better in 2013 than it was at the bottom of 2011, then we’re looking at a 30% increase from the bottom of our market to where we find ourselves today.

If we go a step further and remember that our market was knocked off 30-40% between the high of 2008 and the bottom of 2011, then it’s not a stretch to say we’re within 10% of our prior cycle highs. That’s not a universal truth, but it’s a pretty decent data point considering the history of this individual sale.  The reason this particular sale is a decent indicator is because the cottage, while maintained, was not significantly upgraded over those years. If I show you a sale from 2013 of an old house and then show you the same fully remodeled house selling in 2017, that’s not a very good data point as the property itself was not merely riding the market wave, it was forcing an increased valuation due to the work that was completed.

Today, there are only two homes for sale priced under $748k with transferable boatslips.  That’s remarkable, really. To make matters worse, both of those slips are far from ideal. So what’s next? What does this segment of our market do now? Well, likely nothing. Entry level lakefront inventory is light, which means the owners of a lake access home with slip don’t really have any immediate upgrade option tugging at them. Without that option to upgrade, the only people selling will be those who are no longer wishing to own a Lake Geneva vacation home.

A big thank you to the seller who let me represent them both in this sale and in their upgraded home purchase. And a big congratulations to the new buyer, who finally gets to look forward to the weekend.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

Wow. That’s really all there is to say. Wow. Maybe Wowzers. The lakefront market on Geneva Lake is as heated as it has been since the summer of 2007.  I was a player in the market then, but I wasn’t a large player in the lakefront market like I am today, so my view of that prior frenzy wasn’t from the front row. Today, with this front row seat underneath me, I find the market to be breathless. How I pine for the darker days when buyers had a few moments to gather themselves before making a lakefront decision.  For those buyers who had lakefront opportunities during 2011-2015 and failed to act, this post should be sung slowly as a dirge.

Today there are 21 lakefront homes available in our MLS. There are an additional four pending sale. At least two others have offers in negotiations.  At first blush, you won’t find this all that rare. In fact, our inventory has actually risen over the past three months, as for one period there were just 16 lakefronts available. There are two primary points of interest that have presented in this new market cycle. Yes, it’s no surprise that buyers still want 100′ of frontage and they want it now. Yes, buyers still love Viking ranges and Sub-Zero refrigerators. Yes, Calcutta marble remains in high demand. The things you know are still correct, but there are two new drivers of interest that have never, ever fared particularly well in the history of our market.

Buyers have shown that they love being near downtown Lake Geneva. They don’t just sort of like it, they love it. I sold 700 S Lakeshore earlier this year in large part because of its estate qualities and its proximity to downtown Lake Geneva. The two lakefront homes on Main Street just West of Library Park are both pending sale as of this week (mid $2s), and that’s significant as both of these homes have endured some lengthy market times over recent years. Buyers found motivation to snap up these two homes, and I’m betting large amounts of your money that the interest was driven primarily by the proximity to downtown. In prior years, such proximity would have often been viewed as a negative feature. The noise and commotion, the tourists, the higher taxes. Yet of late, buyers love downtown and so buyers are buying downtown. It’s super interesting to me.

The other curious aspect of this new market cycle is the liquidity at the top end of our lakefront. Homes over $5MM have never sold with particular ease. During the last bull run here, from 2000-2010, just three lakefront homes sold in our MLS for a price that exceeded five million dollars. Since 2010, eleven lakefront homes (and a vacant lot, making it twelve) have sold over that benchmark. Of those eleven, I’ve sold seven of them, including three of four to close over $7MM, but that’s not the point (actually, it’s always the point). This increased liquidity is being viewed by the owners as some new stable trait of our market. Something that has finally manifest, and should stay in place forever. I’d question that theory, and would encourage any owner in this range who might be considering a sale to hurry up and sell. This liquidity is beautiful, but cycles are cycles.

And that brings us the concept of a lakefront market cycle. How long will this cycle last, and where are we in the cycle? Obviously it’s impossible to know this, but we do have the benefit of history to look at as a guide. The last cycle began in the late 1990s and ran up through 2008. The cycle lasted around 10 years, with gradual price increases occurring each year during that cycle, including in the years immediate following the 2000 dot com bust. If we look at our down cycle as occurring from 2009 through 2012, we’ve been building towards a new bull market since 2012. Yes, extreme value existed up through 2015, but for the most part our market was in full recovery mode (increased liquidity and increasing demand) by mid 2012. With that in mind, it’s easy to say we’re about five years into our current bull run.

How much is left in the tank? Well, judging by the market conditions today, I’d say plenty. Does it last two more years? Does it go five more? That’s impossible to guess. Keep an eye on the stock market and on our inventory if you’d like a clue as to where the market is going. If the indices stay high and our inventory stays low, you have the makings for a continued bull run. If markets melt to any extreme level and our inventory swells, that would likely mark the end of these conditions that favor our sellers. For now, look at the market. Watch it. And don’t do as many buyers are doing right now and make a mistake. Let me be your guide. Not only will we have a lot of fun with your house hunt,  you also won’t end up buying the wrong house in the wrong location.

 

Above, morning at my 412 Harvard listing. 
Expectations

Expectations

By now you know I have a problem with cars. I like cars, but I don’t like the process of buying a car. I don’t even like thinking about cars. I’m young enough to see a car I like and think, “I really like that car”. But I’m old enough to not pursue the purchase of such a car.  Men tend to track their lives by the cars they drive. I remember when I met my wife I drove a black Cadillac (don’t ask). Then, later, when my girlfriend became my wife, I drove a black Volvo. It was a nice car. Later, my wife almost decapitated our dog by sideswiping a telephone pole in a red Jeep Grand Cherokee. Life is most easily tracked when the memory places you behind the wheel.

The problem with these nice cars is that they’re expensive. Super expensive. And so earlier this spring I found my way to a car dealership and before my timid financial self could win the internal argument, I agreed to purchase a car. I negotiated for this car as best I could. I feigned the walk away. I stood up and paced. And when all of that was over I had raised my price by dollars and the dealer lowered theirs by pennies. I decided I wanted the car and so I had to pay for it. To walk away meant to repeat the process at a later date, and I was weary from so much anxiety. Later, when I think back about the spring of 2017, I’ll remember driving home in the rain with my wife who pretended not to like the new car until the seats started massaging her back.

This experience relates quite closely to the home buying experience.  The desire. The negotiation. The decision.  The decision, after all is said and done, is what this is really all about. I desired to buy that car of mine for about $1000 less than I paid for it. I could have stood my ground and hoped they called me the next day to accept my price. I could have done that, but I didn’t, because what I wanted to pay and what I had to pay were two different numbers.  This is the situation at Lake Geneva today. If you’re a buyer, there is likely the price you want to pay, which is likely the price I want you to pay, and then there’s the price the seller is going to make you pay. You know which price is more important.

This lake is rife with stories of would-be-home-buyers who stood on principle and stood until they were the only man left standing. The buyer who looked at that lakefront in 1998 and said, no. $575k is just too much for that lakefront. Or the buyers who stood with me on properties in  2011 and 2012 and said, no, the price won’t work. These are the buyers who today look at this market and wish they had the conviction needed at the time they needed it. It’s easy to harness buying conviction when it’s too late. I would have paid X! They say. But it’s too late, because someone already paid it. The practices that helped my buying clients purchase lakefront property at significant discounts to the market five years ago are, for the most part, no longer working.

That’s because we know what we’d like to pay, but the seller knows what they’re going to take. That’s why these last few months I’ve stood on many properties with many buyers and discussed the price I’d like them to pay and the price they’re going to have to pay if they actually want the house. Would I want you to pay $1.9MM for the house? Of course. Are we going to try to pay $1.9MM but realize, after a heated and skillful negotiation that we’re going to have to pay $2.1MM? Again, of course. Because in this low inventory environment sellers have the upper hand, and this is an undebatable fact.  There are some properties that have accumulated enough market time that they will succumb to our negotiating pressure but these sellers are the outliers today, not the standard bearers.

This summer, approach the market with caution. Certain properties are wildly overpriced. Others are not. Know the difference. Don’t approach the market with reckless, fevered abandon.  But when the time comes and you find the house you want, just remember not to get too hung up on a few percentage points.  Those few points will be long forgotten when you’re lounging lakeside, blissfully unconcerned with the slightly larger hole in your bank account.

Let’s Play Ball

Let’s Play Ball

To be the Dodger’s lead-off hitter is to be the invisible man.   That first at-bat is a thankless at bat, no matter the outcome. The vendors are still loading their trays with refreshments, the fans still waiting in the longest of lines at the last highway exit. The television broadcast knows you’re batting, but they don’t care. They pan the crowd, to show the empty seats, to show the mountains in the horizon and the brilliant color the smog turns that early evening air.  If you crack a thrilling solo home-run to lead off the game but no one is there to see it, does it still count as a run?

Likewise, when the team of large men in the NBA finals races off to a large first quarter lead but later melts under the pressure of a steady barrage of 30 foot foists, does that shimmering start mean anything at all? To the fans who saw it, I suppose the answer has to be yes. What a move!– the dad will say to his son. WOW! Some old lady will say to someone next to her. That lady has been to every NBA final since 1919, the announcer with the purple suit will say during half time.  But your team raced out to that lead and you were in line waiting on the nachos, and you only returned to your seat in time to see the other team drop so many threes from such great distances.

Today at the lake, we are in the first inning. It’s perhaps still the top of the first, but there are no runners on and two outs. The pitcher has been flawless, effortless, really. His slider is sliding and his heater is heating. The third base coach looked towards the dugout and said he doesn’t think he’s ever seen better stuff. The NBA game has started, and your team is up big on the visitors.  They’re throwing lobs and dropping threes and the coach crouched down in the huddle and told the players that he’s never seen them play better. And he’s been the coach for along time.

It’s early here, yes, but it’s phenomenal. Summer has started, whether you were ready for it to start or not. Last weekend, a client of mine decided to stay in the city. There were errands to run, things to do, a birthday party that begged attendance. The Lake Geneva forecast called for rain, and so the decision was made. The family would spend the weekend at home, in the city. Except then on Saturday the weather wasn’t foul at all, it was hot and sunny and bright. It was summer.  Weekend plans to sit idle were thrown aside and the family woke up Sunday morning not in their Monday house, but in their Sunday house. Who could push away summery things when summer is already here? This is like saying you’re skier and you’ve made a plan to ski in January.  When it snows 24 inches in two days in December, shouldn’t you go skiing?

Today it’s summer. Yesterday it was summer. Tomorrow? Summer.  Summer does many things to a soul; things delightful and refreshing. But summer can also torment, and summer can be cruel.  Summer isn’t going to wait for you to be ready, because if you’re not ready by now there’s a good chance you never will be. Don’t get caught in traffic when the first pitch has already been thrown.  The grass is green and the sky is bright and the home team is belting homers left and right.

Folly Lane Sells

Folly Lane Sells

If you’re showing a house on Folly Lane, it’s best to show it in late October.  That’s because the skinny road that makes an abrupt turn towards the lake off of Snake Road is lined with Maples. No, not merely lined, it’s choked with Maples.  These aren’t your run of the mill Maples with orange and red and all sorts of silly extra colors, these are the yellow Maples. That’s a man’s Maple, the yellow one.  And Folly Lane has all of the yellow ones, and as such, you’d be best served to show a house on Folly Lane in late October when these green Maples are brilliantly yellow.

But if you can’t show Folly Lane in October, it’s still a good enough drive any other time of year. I drove down that road last Friday with a cherished client in tow, and later that day we closed on the large lakefront at Folly Lane for $7.4MM. This price, by the way, is the same price the property sold for in 2012 (the furnished number was $300k higher than the recorded print).  I didn’t love that sale back then, as the market was in pretty rough shape in the summer of 2012, but today the market is robust and vibrant, especially in our upper reaches. Today, that sale at $7.4MM makes sense to the market, and I was supremely pleased to represent the buyer.

For the market, that’s the sixth sale over $5MM in the last 12 months. Of those six, I’ve closed five of them. That reminds me of something that happened over the weekend. On Saturday morning I was out early delivering magazines with my son. We were walking up to the Lake Geneva Starbucks to peddle our pile of propaganda. A woman was walking out with her husband, a copy of Summer Homes For City People in her hand. She was talking in low, hushed tones to her husband. In a terse whisper she said, “I’m not sure why I’d want to read Dave Curry talking about himself”.  I was disheartened to hear this, but I quickly decided that it would be better for me to write 84 pages about myself than about someone else. The waters could get slightly litigious if I wrote 84 pages about someone else.  And in the same way, I really don’t like having to tell everyone how I’ve sold five of the last six mega-sales on Geneva Lake, but if I don’t tell you, do you think the other 500 some Realtors here will?

As of this morning, there are six homes for sale on Geneva priced in excess of $5MM. Of those, perhaps four of them are actually worth more than $5MM. Be sure to ask me which ones those are. Of the remaining homes, there’s a rumored offer on one of them, and some interest in another. The properties in this strata are generally large, but of the remaining inventory there’s nothing particularly turn key on estate type parcels of land. That’s an issue for the market, especially as there are many upper bracket buyers in the market today.

The story of 2016/2017 is less about the primary market momentum and more about the incredible liquidity in the upper reaches of our lakefront market. Remember, from 2000 through 2009 there were just three MLS sales on Geneva that printed in excess of $5MM. In the past 12 months we’ve closed six. It’s all really quite remarkable until you remember that Geneva Lake is the best lake in the Midwest. Then it all makes a whole lot of sense.

A big thank you and congratulations to the newest lakefront owners. Here’s to generational happiness at Folly Lane.

Housing Markets

Housing Markets

I’ve been working with a friend who is in search of his first home. This is not typically my aim, but I decided it would be good to help him out. I figured it would be easy.  A $300k budget, the ability to handle a remodel, and plenty of enthusiasm for the process. This was what I thought. Six or more months into the home search I feel as though I may have made a big mistake. This market is tough. Like, super tough. You like that boring ranch on a half acre lot? You know, the one with the water in the basement and the rotting roof? The one that isn’t even cheap? Yeah, so does everyone else.  Take a home buyer and let him find interest in one or two homes that each sell before he can buy them and then stand back and look at the impatient mess that the market has created. Hot markets breed hot markets. Confidence, it seems, has never been higher, and with that confidence comes a tidal wave of buyer mistakes.

Because the papers are telling people to buy houses. Economists say buy. Lenders, buy. Realtors, BUY. Everyone wants you to buy a house. If you don’t own one, buy. If you own one, buy another. If you own seven, buy the eighth. After all, Lawrence Yun says you should buy. In case you don’t know Lawrence, he’s the chief economist for the National Association of Realtors.  In spite of his research, he’s never found a time that wasn’t right to buy a house. Buy in 2008, because buy! Buy in 2009 because the market has pulled back. Rinse and repeat for the following four years. Then buy in 2013 because the market in rebounding. Then rinse and repeat that mantra from then until now. Buy, buy, buy.

And this is the attitude that has fueled a most remarkable level of growth in our primary housing market. Oh, I should add, this is not a post that’s very inclusive of the Lake Geneva vacation home market. This is about the primary market, where you live and where I live, not where you vacation and I vacation. This is the market for the people, and it’s absolutely on fire. McHenry County is on fire. Lake County, too. Kenosha County is booming because people from Illinois who don’t like high taxes are moving to Wisconsin to pay higher taxes.  Interest rates have risen, but they’ll be rising some more, so buy!  The narrative is the chorus, the refrain, buy, buy, buy. All of this is fueling a most incredible, dynamic market.

The Chicago Tribune chimed in on Sunday with an article that says- you won’t believe this- that it’s time to buy. Experts say you should buy a home this year. Buy one now, don’t be left behind. And this is the sort of thing that my young friend, Mr. Primary Home Buyer, is reading.  Everyone is buying, so why not me, why not now? Well, just maybe, because you can’t quite find the right house. When we started our search my buyer wanted to find lots of land. Ten acres would do, but twenty would be better. Thirty, ideal. The search went on that way for some time. Where has the search led us today? To $319k vinyl ranch homes on half acre lots. These are sent to me with the link to the property and a note “Not bad, right”.

No. Bad. Terrible, awful, bad. Because everyone is buying the feeling is that buying is a must. Buying is a requirement. Buying is all there is and without it there is nothing. Inventory is low, this we know. And this creates a bit of a difficult situation for would-be-buyers. If you’re buying a lakefront on Geneva, you know that not only is inventory limited today, inventory is limited at almost all times. It’s a low inventory market, in times good and bad. If you want something perfect, you’re going to have to compromise and buy something less than, because you can fix the things you wish were different.  The market on the lakefront is rare and valuable and it’s not at all like a primary home market. But that beat up ranch on 7 acres for $299k that you’re looking for? Well there might not be one for sale today, but I’ll bet you all of your money and a little of mine that there will be one coming to market in the next several months.

So my advice for the primary home buyer in this market? Be patient. Yes, interest rates are slowly rising. Yes, that’s too bad. But why buy a house you hate to save a quarter point on a mortgage rate? Find something you love, because if it isn’t for sale in May then there’s a good chance it’ll be for sale in June.

Lake Geneva Market Update

Lake Geneva Market Update

Next week I’m going to do an in depth review of Abbey Springs, Geneva National, the lakefront condo market, and the secondary condo markets (Abbey Villas, Abbey Hill, Willabay, Bayside Point, etc). But today we’re going to look at the lake access and lakefront markets, because there are some interesting things occurring within these segments. I wrote earlier this week that each segment is active, which sounds like something easy to do and easier to write, but it’s not easy to do. Rarely do all pricing segments of one major market feature the same general mood. Rarely does a $200k cottage sell with the same frequency as a $4.5MM lakefront. But that’s what we have today, and it’s really quite amazing.

We know the entry level vacation home segment is super active with 10 out of the 28 homes priced under $500k currently showing as active with offer. What’s more interesting to me is that we have 22 homes available priced between $500k and $1MM and just three of those are pending sale. That’s not a terrible number, and that’s actually not what’s particularly unique. In this price range buyers will generally be able to find a transferable boatslip. Not always, but often. They’ll also typically be looking for a lake view, or proximity to the lake, or something unique about the house.  What’s curious today is that of the three homes pending sale in this segment, just one of those homes has a slip. The other two do not, and both are priced in the $600s.  Buyers buy for all sorts of reasons, so I would never seek to explain all purchase behavior, but if I’m a buyer in this segment I’m likely looking for a slip first, and every single other thing second. Buyers often think they won’t need a slip. Then, after the first weekend at the new lake house, they’re wondering where they’re going to moor the boat they’d like to buy.

The other range that continues to impress is the off-water lake access market over $1MM. This range was slow last year at this time, with ample inventory and few buyers.  The market has absorbed much of that aged 2016 product. Today there are 10 off water homes priced between $1MM and $1.7MM. Of those, two are under contract. That might not seem like a lot, but it is. As the entry level lakefront inventory shrinks (just two lakefront homes priced under $1.5MM today), expect to see this market garner more and more attention. The idea here is simple. If a buyer can’t buy lakefront, they’ll look for the next best thing. And if lakefront is rare and pricy, often buyers will seek some sort of off-water property with a slip or a view or maybe both. These are not market mistakes, generally anyway, but they are market moves born not out of pure desire, but simply out of limited options. I’d like to take the pretty girl to the prom, but she’s already going with the quarterback, so I’ll take this other girl, who likes fidget spinners and eats erasers, but her hair is okay.

Lastly, the lakefront market itself.  There are offers being flung around like so many pancakes at the fly-in-breakfast. The one out West of Walworth. These offers are generally coming together, but increasingly sellers are holding out for more money. Better terms. This might be a good idea or it might be a mistake, and I’m going to go with mistake. Some of the properties with offers are flawed- and the sellers used to understand those flaws. Now the sellers figure the market is in their favor, and their flaws are hidden by the hysteria of it all.   They shouldn’t be this way. The market can turn as quickly as a 10 percent correction in the S&P, so sellers should remain confident but cautious. New pending sale mentions this week include the Congress Club listing in the $1.6s, the north shore Fontana lakefront in the low $2s, and the lakefront on South Lakeshore in Fontana in the mid $4s. These sales will all make sense once they close, so I see nothing particularly unique or exciting here. Rounding out the lakefront activity, my pending contract on the Folly Lane property listed in the high $7s.

Inventory remains the question for each segment. The MLS only shows 17 true lakefront homes available this morning. Of those, there are some nice properties, some rare properties, and some that represent solid value. The low inventory situation will likely persist this year, though I’d expect several new offerings to come to market over the next 30-45 days. As always, if you’d like to know about these new offerings before the rest of the market, just let me know.   The lake today is buzzing with activity, and not just of the housing variety. Landscape crews are hustling to mulch beds and plant annuals. Pier guys are racing to install the last of the piers. Irrigation systems are being activated. It’s a frenzy, to be sure. But it’s our frenzy and I wouldn’t have it any other way.

Above, a new lakefront I’m bringing to market next week.
Inventory Problems

Inventory Problems

What is a healthy real estate market? Is it a market with plenty of inventory so that every buyer has an opportunity to buy whatever it is that they want?  This would be the generally accepted position of most. Yes, we should have inventory for all, available at all times, with low interest rates and sunny skies. Also, hopping, happy white bunnies.

The problem is that it is impossible for a market to exist that pleases buyers and sellers equally.  Even if you’re a seller and then an immediate buyer, you don’t have things exactly the way you’d like them. Unless you’re selling something into a hot segment and buying something in a slow segment, you’re likely selling high and buying high. When the markets were bad, sellers were selling low and then buying low. As I was advising then, this felt terrible but was, in fact, really quite smart. The trick then was simply to sell low and buy lower, just as the trick today is to sell high and buy less high. I admit the clunky phrasing will never catch on.

Today the market is active in all segments. Unlike the initial improvement we saw from 2012 through 2015, where certain segments were left out in the cold even as others advanced, today the entire market is humming.  There are 19 lake access homes priced under $400k at the moment. Of those, 8 are under contract. There are homes with slips priced between $400k and $900k pending sale,  and even our off-lake $1MM-$1.5MM range is churning out volume. There are two pending sales in that category, one in Lake Geneva priced in the $1.3MM range and one in Fontana priced near $1.5MM.  This is the range, in case you forgot, that has been struggling over the past 18 months.  Today it is fluid and potentially as liquid as any other individual market surrounding the lake.

The entry level market on Geneva is still giving up some inventory, with two lakefronts priced under $1.5MM.  Beyond that there is a pending lakefront in Lake Geneva priced at $2.195MM (my listing), and a recent sale in that same category of a house in Williams Bay on the north shore of Fontana Bay. That property closed for $2.125MM. I had that home for sale a couple of years ago and failed to sell it.  The house didn’t bow to the market, the market came up to that house.  Around the other side of Fontana, a house that had been for sale off and on for years has gone under contract with an asking price of $4.65MM.  That’s a nice property in a nice location. It makes sense that it sold quickly this time around.

In our upper bracket ranges, I have a new deal on a lakefront priced at $7.95MM.  That’s the biggest story of the last 24 months- the improved liquidity at our market’s very top end.  We used to sell a lakefront over $5MM every other year. Now we can sell five or more per year. When this sale closes that will make six sales over $5MM between June 2016 and June 2017. Of those six, I’ll have closed five of them, leaving little doubt as to which agent best understands the highly nuanced upper bracket here.  This increased liquidity is good for the lake, but it will have a cap.  Over $8MM the numbers get a bit more sticky, and we still haven’t ever printed a transfer at $10MM or over. Expect this to be tested this year, both with some of the current inventory and with new inventory that’ll likely leak to market over the coming months.

So is this a buyer’s market or a seller’s market? Is the market healthy? Well yes, it’s healthy. It’s active and it’s dynamic.  But as for who’s in control of this whole thing, that depends on specific properties. You can sell into a hot segment right now and buy into a cooler segment. That is still possible, and that’s the best possible outcome for those seeking to upgrade or downgrade without leaving these shores.  The trick now is for buyers to remain patient (and seek out the proper guidance, from me), and for sellers to resist the urge to indulge in overconfidence.  Either way, if inventory remains low we might have a slower summer than any of us want.

Lakeview Lakefront Sells

Lakeview Lakefront Sells

Buyers are not generally pleased with the way this market is performing. Buyers want to know when the market will shift in their favor. When the inventory will increase. When the skies will clear and the sun will shine on them, not on the seller. To be a buyer today is to assume the seller has the upper hand.

Last November a small house in the Highlands came to market for $1.2MM. The house was about what the market expected for this price. 45 feet of frontage, some basic things like a sort-of kitchen and some bedroom-ish spaces. It was fine, this house. And the market was hot, especially on the heels of my closing of the lakefront down the road on Lakeview right around that same time.

But the house didn’t sell, because it didn’t have any sort of sizzle. Buyers looked at it, often, because it was, at the end of every day from then until now, cheap. But was it cheap enough? After all, the house down the road closed at $1.26MM and had a bit more frontage, a boathouse, better finishes and it was clean and easy. This house wasn’t clean nor was it easy, and so, in spite of this dynamic seller’s market, the house sat.

I was working with a young couple last summer and fall, a couple who, in spite of their newness to our market, felt compelled to pull something off. They didn’t want to spend a lot, though in Lake Geneva even our little is a lot, so we targeted the entry level lakefront market, looking for value even as sales printed all around us. Patience, even in an escalating market, would prove to be the right practice.

We bid low in March, or maybe it was April. Pretty low. Quite low. The seller responded. We negotiated some more. A bit more. Just a tiny bit more. We closed that purchase on Monday for $925k. The new buyers are into a lakefront home for the lowest amount that anyone has paid for 45 or more front feet on Geneva since January of 2013, and that, no matter how terrible the kitchen, is a value.

There’s something especially rewarding about placing a new Lake Geneva owner into a lake house. This sale was not the largest, nor was the house the fanciest. But the house allows a young couple an opportunity to experience the lake for the first time, in a way that will be completely and utterly new to them. To this new buyer, a big congratulations and many thanks for letting me help with this lakefront purchase.
To the buyers who claim this is a seller’s market, what of the sale here on Lakeview? If you liked your down market in 2010-2013, that’s fine. I liked it quite a bit, too. But the market today is robust and healthy and yet still discerning buyers with enough vision can still secure lasting and permanent value. Don’t let the headlines get you down. Every seller has their own circumstance, and every home its own unique set of challenges. Our job is to discover those homes and those sellers and do our best to print value.

700 South Lakeshore Sells

700 South Lakeshore Sells

When I listed this property last August, I knew exactly what it was. It wasn’t the most perfect house on the lake. The kitchen wasn’t exactly the current style. But it was 4 acres and 162 of frontage with so much square footage and so many resort-style amenities. The house had been listed off and on for what felt like ages, as if anyone really knows exactly what an “age” feels like. Still, the property was repositioned with the help of a fresh perspective and some fresh marketing efforts and I was pleased to work for that seller to get that property sold.

Last Friday, I sold 700 South Lakeshore in the city of Lake Geneva for $5,900,000. The sale is the fifth over $5,000,000 since the start of last year. Of those five sales, I’ve represented the seller in four of them. I’m not really sure now what else I can do to help convince the upper bracket market that I’m the man to handle these luxury listings. Perhaps the secret will be unlocked after I sell five out of the last six…

While I’m happy for the seller who now gets to move on to the next chapter of her life, I’m exceptionally pleased for the buyer. This is a new lake owner, with a new reason to look forward to the weekend. There’s something extra rewarding about selling a lake house to a first time Lake Geneva owner.  They don’t yet know what they’re in for, but I do. We do.  A very special thank you to this seller and buyer who allowed me to help bring this sale together.

Shore Haven Sells

Shore Haven Sells

The single lane associations on the south shore of Geneva are some of my favorite lake access associations. These are not large associations like Cedar Point Park or Country Club Estates, rather they’re intimate skinny lanes with a handful of homes, perhaps 30, perhaps 50, rarely more and rarely less. These associations generally offer one thing that the larger associations cannot- transferable boat slips. Excepting Sybil Lane, the other three in this stretch- Shore Haven, The Lake Geneva Club, and Oak Shores, all offer each home a fully transferable slip. Some slips are larger and others small, some shallow and others deep, but if you’re a buyer on these streets then you’re going to be buying a boat slip, and that is always a good thing.

Some buyers don’t want boat slips. I’m not a boater, they say. I don’t even own a boat, why would I want a slip? Considering I’m a sage old Realtor at this point, I can tell pretty early on if the buyer is the sort who claims to not want a slip but who will, at a later date, wish for one. If a buyer wishes to spend $300k on a lake access home, that’s terrific news. But that buyer won’t be buying a boat slip for that sort of money. The home they can buy will be nice enough, with lake access through an association park and pier system, but a transferable slip will not be possible at that price range. However, if a buyer is looking at $500-600k lake access homes and doesn’t think they need a slip, I’ll always encourage that buyer to consider homes with a slip first. To vacation at Lake Geneva and not have access to a boat is like sitting down for a dinner at your favorite restaurant and not being allowed to order.

Last week, I closed on my listing in Shore Haven for $675k. This was a nice house with terrific proximity to the lake, but that’s not why it sold. It sold because of its wonderfully large and deep transferable boat slip. Today, the home next door to that one is closing to a customer working with me, and that home will be selling because it’s cute, sure, but mostly because of that slip.  Today, buyers searching for sub-$800k homes with boat slips are not going to be overwhelmed with the multitude of options available to them, but they are going to have options. As of this morning there are 6 homes with transferable slips (or pier) for sale priced under $800k, including my rare offering in Ara Glen listed at $775k.

The next home to sell on this list will likely be my painfully cute cottage in the Lake Geneva Club listed at $609k, pictured below. That home has a nice slip, a double lot, and all sorts of cottage charm. If you want to pull up to your lake house and feel a deep sense of contentment, then email me and let’s make a deal.  It’s May 1st, which means summer isn’t some far off thing we’re quietly dreaming about. It’s right here, right now, and before you know it you’ll be sitting in your Saturday suburban back yard wondering where all your cool neighbors went.  The time is short, but there’s still plenty of it. Buy this house, be in for Memorial Day Weekend, then wonder how you ever spent Memorial Day Weekend anywhere else.

$609k, with slip.

 

Black Point Sells

Black Point Sells

The whole lake is special, we all know that. Every nook and cranny, whether our particular nook or our own favorite cranny, is unique and valuable. Some North Shore dwellers couldn’t fathom the horrors of living on the South Shore, and those South Shore owners would rather be dead than find their pier numbering 1-411. But there are universal bright spots, rare locations where the stretch is just right. The trees greener. The water bluer. One cascading landscape falling into the next, on and on, until the unique nature of it all turns to a different flavor, a different style, favored by someone else but not by everyone. These particular sections of the lake are sometimes obvious. Basswood. Snake. Creek. The lanes that offer up our best.

But the other areas, those are more nuanced. I once had a client who could have owned anything he wanted on this lake, and it was a difficult push to get him to move from his lakefront house in Glenwood Springs. He loved that house. That area. Those streets. The way the lawn runs uninterrupted for 1800 feet, give or take. He learned to love what he knew, and when the chance to move on presented itself, bold and immediate, he paused. Because Glenwood Springs was where he felt most at home.

This week, I closed on a hilltop house on Black Point. Black Point is just to the East of  Majestic Ski Hill. It’s dark and it’s intimidating and it’s high. The Black Point Mansion once anchored the entire point, but is now relegated to the land on the West side of the point, and everything else has been developed into large lakefront and lake access parcels. The homes there are varied, but mostly vastly improved and manicured. Two years ago, a 1980s cedar house came to market for $1.395MM. It was a nice enough house positioned in a most incredible way on the top of the bluff that runs from deep under the water and up to this very tippity top. The house is surrounded by towering pines, the sort that create a most audible white noise whenever the wind rustles. Under the summer sun, the sweet aroma of pine sap is unavoidable and welcomed.

The problem here was that the house just wasn’t nice enough to command that price. It was a nice house, sure, and the location was incredibly desirable, but the house lacked the sizzle that the market responds to. There’s a house in Lake Geneva that just came to market around $1.3MM, and that house looks as though it’ll sell quickly. The location is okay, not super unique, but quality. The house, however, has the interior sizzle that buyers clumsily rush towards.  Fancy finished in this market always attract buyers, whether that’s a lakefront home, an off water home, or a primary home without any lake access at all.

And so the house on Black Point sat. It caught the attention of a dear client of mine, but our lower priced interest was rebuffed by the seller. We watched it some more, enamored with those pine trees and that deep water slip. It should be noted that “deep water” is a way we describe slips, often. But in the context of Black Point the deep water is different. It’s really deep. Like immediately deep. Dropped your sunglasses off the end of the pier? A fish with large teeth, irridescent skin and a light dangling off its head in front of its eyes just ate your RayBans.  The house, no matter that location and that slip and those two acres of pine trees, didn’t sell.

Over time, the price was adjusted. Lower a bit here and lower a bit there.  This spring, after the property was growing a bit weary, we bid again. That deal was negotiated to an end, and the cedar house on the top of Black Point sold this week for $950k. My client is pleased and excited, as am I.  This is a special location, a prized location. There are others on the lake, some more special and more unique than the others, but this location, man. This location. Congratulations to the new owners.

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.