I think there’s plenty of reason to believe that the elevated foreclosures (putting it mildly) on a national level are no longer representing some form of short lived, but severe, crisis. I think the foreclosure filings, which appear to have peaked already, are going to remain at an elevated level for the rest of my life. I say that as someone who isn’t planning on dying any time soon. As I look at the Lake Geneva foreclosure scene, it see a stable market, but one that at any given time has foreclosure motions being filed, being granted, or properties being sold at sheriff’s sale to the highest bidder (the bank). I don’t see an ebbing of the situation, nor do I see an escalation. I see a steady, annoying drip, that will probably be dripping at this newly increased level for years to come. I think that because foreclosures have lost any stigma attached to them, and they are now a tool for Jo and Mary Homeowner to effectively, and acceptably, shed their debt burden and finally, I mean, finally, go to that Sandals resort in Jamaica that they’ve been dreaming about.
The Lake Geneva vacation home market is still experiencing the aforementioned steady drip, and this report today contains some very big news. We had a lakefront foreclosure last year, and I wrote at the time that I didn’t think it was a good deal given other available inventory on the lakefront. There has been a property, also in the city of Lake Geneva, that has been drifting in and out of foreclosure over the past year, and it appears this time that it’s finally going to be auctioned off. This property is old and bad, and it’s in a spot that I don’t like one bit. That said, the note is relatively low ($800k’s), which should allow a bank to sell this thing for a million or less. If this lakefront goes for $1MM or less, it’ll be a deal. If it lists for that sort of number, I’ll put my red “it’s a deal” light on the top of my car and drive from Lake Geneva to Michigan Avenue and back, like a modern day Paul Revere. Stay tuned for this one, because it’ll sell in like three minutes if it hits the market for around $1MM. If it lists for less than that, I’ll be the first to tell you (best email me to get on my list of people who will know before anyone else).
Keep in mind, if you’re looking for ideal lakefront, with a perfect location and perfect house, this is not it. On to Geneva National now. GN has been a regular at the sheriff’s sale, but it’s really not as bad there as you may think. A development that large (1100+ units) is bound to have an ongoing foreclosure situation. GN’s isn’t that bad, with perhaps five or six currently on the books from what I can tell. Abbey Springs has fared remarkably well, and I can’t find a single foreclosure ongoing in that foreclosure-bucking association at the moment.
There are foreclosures picking up steam at the Abbey Villas, as a lack of liquidity has really hurt the market there. Sellers can hold out for a while, but when it’s close to impossible to sell your property, it’s very hard to get out from a debt obligation that might be too much to handle. I see two or three active foreclosures in the villas at the moment. There are also a couple at the Abbey Hotel, those being the condo-tel units. Similarly there are some foreclosures at the Grand Geneva time shares, which goes without saying. Lake Lawn also has some trouble, but let’s not beat a dead horse.
In what I think is really bad news for the Bella Vista A/K/A The Meridien, there appear to be two or three foreclosures in there at the moment. A simple rule of thumb for foreclosures is that the smaller the association, the large the impact of a foreclosure on the pricing of the other units. With only 39 units, the Bella Vista is in trouble if they see a spate of foreclosures in a relatively short period of time. There’s another foreclosure in the works at Abbey Hill, which has also been damaged by just a small handful of foreclosures over the past couple years.
Cedar Point Park has a foreclosure or two brewing, which has been the case off and on for most of the year. The South Shore Club lot that has been meandering in and out of trouble had a Lis Pendens Release recorded this month, meaning the owner has pulled the property back from the brink of foreclosure. We’ll see if this sticks, but either way it’s good news for the SSC and for this owner.
I feel like I just rattled off quite a bit of foreclosure activity, but the reality is that the activity has been sparse compared with lesser vacation home markets. There are values out there, but these REO properties in lake access associations tend to sell very quickly, and they tend to not be the most prime real estate. The lakefront foreclosure is the big news of the day, and I’ll be sure to watch it over the next couple weeks. I expect that it will generate a ton of activity, and it will sell for too much money. A house in the shadow of a large condominium is not a house that I really want to buy- unless it’s dirt cheap. Which means we’ll just have the figure out the going price of dirt.
(As with all of my market and foreclosure updates, this represents a mere opinion of the market based on what I’m able to see by searching public records. This information is not guaranteed, nor is it inclusive of every foreclosure filing or proceeding in this market.)