You might think there is an insatiable appetite for vacant land on Geneva Lake. The lake has been nearly filled for many generations now, but as with any nearly full development there will always be room for new construction. Buyers can buy and tear down, which creates an opportunity to build new, or they can look for available vacant land, no matter how rare it might be. A nice aspect of Geneva is that there is almost always a vacant piece of land or two on the open market, in the event that a particular buyer would rather build fresh and avoid the part of the usual procedure that involves a wrecking ball. Today, there is raw land available, though there is considerably less available today than was available a month ago.
Buyers have gone under contract to purchase no fewer than three vacant parcels on Geneva in recent weeks. Two of those parcels are truly vacant, and the other hosts a home that will likely be torn down so for our purposes today, we shall consider it to be a vacant pending sale. These three parcels are all on the North Shore of Fontana. There are other parcels available on the lake today, most importantly a large lot in Loramoor that would befit a high end new lake home. In an obvious display of favoritism, the buyers overlooked that lot on the south shore of Geneva in favor of three in Fontana. What gives?
Well, for starters, Fontana is still pretty darn hot. It’s not where everyone wants to be, but if you’re a buyer with an affinity for Fontana, it’s likely that you’ll continue your search only in that municipality. When I sold the large estate at 1014 S. Lakeshore last summer, that buyer wasn’t content to look at lakefront homes just anywhere on Geneva. He specifically wanted to be in Fontana. And so it goes, a familiarity with a stretch of water that breeds love, and a love that narrowly defines just where that buyers future lakefront home will ultimately be. There is no mystery to the search for most buyers. If you like Fontana, you like Fontana. If you like paying egregious taxes, you like lakefronts in downtown Lake Geneva. But now I’m being unfair.
The lakefront vacant inventory isn’t limited solely to those three now pending lots in Fontana or the large available lot in Loramoor. There is another vacant parcel listed in the city of Lake Geneva in the low $1MMS. That property was purchased at sheriff’s sale last year, and after the home was torn down the property is now being marketed as both vacant land or a spec home package. The problem with that lot is in its neighboring proximity to a large condominium complex that hovers over the northern edge of that available property like an over zealous librarian. Doesn’t she know it’s not appropriate to hover over ones shoulder when one is simply trying to write a letter to one’s girlfriend? Has she no decency?
That property, by the way, is a prime example of why chasing foreclosures can backfire. If buyers on Geneva buy solely because of price and ignore other factors that determine value- namely location- then they fail to see the forest through all those trees. Buyers of distressed property everywhere make this mistake as they seek out low sales prices first and consider neighborhood and location a very distant second. Take note. Don’t buy foreclosures in bad locations just because they’re cheap. That cheap price might not seem so cheap if you still can’t flip the home two years and two tax payments later.
Lake access lots are available today, with some prices downright cheap (starting at around $50k to get into Sunset Hills, but you know how I feel about Sunset Hills), and others anything but. I have a nice corner lot in Cedar Point Park on the market for $79k. It likely needs a variance to be built on, but this is a minor concern given the ultimate sales price. Moving up, there are vacant lots available in Country Club Estates, and a lot in the upper $200ks in Abbey Springs. There was a time when vacant lots in Abbey Springs would sell immediately upon hitting the open market. Today is not such a time.
Perhaps the most overlooked option in the vacant land market here is the cheap lot in the South Shore Club. You know how I feel about pricing in the SSC. I don’t like it all that much. But I do like buying cheap and building reasonably and being all in with a beautiful home there for around a million bucks. I like the idea of sitting in a home for that price when the neighbors home is for sale for twice that amount. That seems to be good math to me, and while I’m leery of the South Shore Club in the upper reaches, I certainly love a little bottom feeding. I vote for buying that lot, and I offer that to you assuming that you’re considering asking me my opinion.
The reality of vacant land purchases on Geneva is that they can, at times, make good financial sense. Other times, like most of the time, they do not. I’d always consider buying existing and remodeling or otherwise improving an existing home before I would default to a vacant land search, unless said vacant land is ridiculously cheap. Buyers tend to underestimate the transformative power of a large scale remodel, and in doing so fail to realize the impact of a $300k cosmetic remodel. If faced with the delightful option of having $3MM into a remodeled home or having $5MM into a new one, I’m going to let you decide which one I’d choose.