Many years ago, there was a time when selling a Bay Shore condominium should have been easy. At that time of apparent ease, it was, in fact, difficult to sell a unit at Williams Bay’s Bay Shore due to a very expensive special assessment of sorts that was for a while in the works, and then soon on the books. Bay Shore the condominium association was constructed in the early 1990s around a restaurant. That restaurant was a bit loud, and it was a bit annoying, and when the restaurant was put up for sale along with the piers that went with it, the condominium owners coughed up roughly $50k each to purchase this in-betwixt annoyance. Then the owners tore down the restaurant and put in a newer, bigger pool, and completed the transformation with an outdoor kitchen and lush, mature landscaping. The result of this $50k horse pill was pleasing, the process of swallowing said pill was not.
At the time of the $50k expenditure, several owners weren’t pleased. This is an understatement. And as they were displeased, I sold a few units in that development around that time to new buyers who liked the idea of the improvements, even if they too disliked the $50k expense. When units were sold, they were essentially sold for the purchase price, which was still reasonable, but also with the understanding that when that $50k assessment came due, it would be the responsibility of the new buyer. When units sold around that time, the market saw the sales price, but the market didn’t necessarily see that the sales price was in effect that price plus $50k. It was a bit complicated.
In 2003 I sold a unit there to a nice buyer who paid $250k for a one bedroom unit directly on the lakefront. If you’re not familiar with Bay Shore, the development has eight truly prime units that are immediately adjacent to the lakefront. These units consist of four two bedroom units and four one bedroom units. In a development where every unit has a view, these fortunate eight are prime. This one bedroom that I sold was one of the prime units, and it sold for that $250k but ended up being $250k + $50k. That owner enjoyed the property for the past 8 years, and yesterday closed on it for $275k.
The loan on that property was in trouble, as a sheriff’s sale was scheduled to take place this fall. That sale obviously won’t be necessary now, as the seller got out just in time. The sale was neither a win for the buyer nor the seller, though it could be successfully argued that the seller was the one who indeed won. Avoiding foreclosure should be considered a win in any and all circumstances. The price paid was in line with the market, and leaves the only other active unit at Bay Shore today my two bedroom that I just listed for $445k. The two bedroom units here come with an available slip, lake view, and private townhouse style entrance. It’s a great unit in a lively association, and if you’re looking for economical lakefront ownership, this is about as economical as both the purchase and the ownership get. (taxes and dues are super low here).
That wasn’t the only sale yesterday that was important to our vacation home market. A vacant lot closed in Geneva National yesterday for $10,000. I didn’t forget to add a zero. A buyer just paid ten grand for a vacant lot in Geneva National. This is significant because it isn’t 2001 anymore. The owner of that parcel purchased it in 1991 from the developing partners at GN. At the time, buyers were whipped into a frenzy and paid prices that made little sense from a broad market perspective, but pay they did. The buyer turned seller purchased that lot for $110,000 in 1991. He then sold that lot 20 years later for $10k. If you figure he probably had roughly $44k in fixed costs over that tenure between dues and taxes, he didn’t just lose $100k, he lost $144k. And then consider on the sale end he paid some closing costs that probably totaled $1500 or more, and he really lost around $145k. To purchase a property for $110k and end up losing $144k on that property is nearly an impossible feat. Thanks Geneva National! (FYI- these numbers are speculative, as I have no idea the exact structure of this deal and the ownership expenses over the last 20 years.)
While the Bay Shore sale doesn’t have much bearing on the market, as it was normal and expected, the Geneva National lot sale is worrisome. Will other sellers take note and further drive prices down? If a seller wants out, how else to attract a buyer but with a rock bottom price? If Geneva National vacant lots slide to 2002 levels, consider me a buyer. If they continue to stall, let’s watch it over the winter to see who else succumbs to a vacant land market suffering from a severe lack of liquidity.
