Lake Geneva Lakefront Condo Sale

A lakefront condo sale on Geneva Lake is cause for celebration. I don’t mean a celebration with a few balloons and a cake, I mean a dancing in the streets, firing pistols into the air type of celebration. And if the sale is at Vista Del Lago, there should probably be people jumping out of cakes too. Last week, a Vista Del Lago condo that had originally listed for $518,900 (January 09) closed for $360k. The price will hopefully send some reverberations through the Vista Del Lago market, and perhaps help most sellers understand that their prices are out of touch with the market. I said “hopefully”, but in this context that word means “probably not”.

This Vista sale (not my listing or buyer) was the fourth lakefront sale this year, edging our meager year to date total just past the torrid pace set by 2009 (3), and just short of the similarly heated 2008 totals (5). The lakefront condo market is not healthy, but every sale inches us closer to a recovery that I fear may take years to fully present itself. As of this morning, there are just 18 lakefront condo units available on Geneva Lake. Starting with my Bay Shore lakefront at $419k and skyrocketing to the lofty (too lofty) Stone Manor unit priced at $2.495MM. Prices of lakefront condominium still need to drop, and I’m hoping that this Vista sale at $360k, will help bring that change about. Note I said hoping, again.

The lakefront condo inventory is still slight, which is what is allowing sellers to artificially hold up their values on paper. If the condo market was overflowing with inventory, ultimately a price war of sorts would begin- a step that would start the downward pricing pressure that we so desperately need. The single family lakefront market is adjusting nicely, with price reductions and a huge increase in activity as a result. The lakefront condo market appears content to wait out the storm, which means they should probably go to Costco and buy a few years worth of those $500 food packages that are supposed to be enough sustenance for one year.

There is a bank owned property at the Harbor Watch condominiums in Lake Geneva, which would normally look like an exciting opportunity for a buyer. Something interesting to note here. The bank that owns the property appears to have taken ownership of it via a deed in lieu of foreclosure. I don’t know that for sure, but that’s what it looks like. This means that the previous owner essentially told the bank that he couldn’t pay the note, and the bank took the property before dragging out the process via a lengthy and expensive foreclosure process. Again, from what I can tell, the bank looks to be a smaller, regional style bank. My experience dictates that these smaller banks will not be nearly as aggressive in liquidating properties as the larger national banks, like Bank of America, or Wells Fargo might. So for a buyer thinking they’ll pick up this $1.1MM+ condo for $550k, there’s reason to think such a selling arrangement would be impossible when a smaller bank is holding the deed. Stay tuned on this one, as we’ll watch to see if this bank does indeed drop the price systematically in hopes of finding a buyer, in much the same way that a national bank would do.

For now, we’ll watch the lakefront condo market. There are a few values present, but the value here is a bit more subtle than in the residential lakefront market. There is nothing screaming “BUY ME, YOU IDIOT!” at the moment. Personally, I would never call you an idiot. But you know how condominiums can be, particularly when they’re stuck in a rut where sales come nearly as infrequently as lakefront sales in Michigan.