I played what I assume was my last partial round of golf at Geneva National last week. I supposed I should be pleased that my last golfing opportunity of 2010 occurred on November 17th, but I was more dissatisfied with my level of play. I used to be a pretty good golfer. I swear. I shot an 81 and beat my brother during a heated round on one sultry July evening in 2007. I routinely found a way to score in the 80s back then, but one shredded back later and I can’t quite find the same groove that my golf game once inhabited. Even so, I golfed some this summer after missing all of last year, so the 2010 golfing year was a marginal success- at least as far as comebacks go.
Like most years, much of my golf took place at Geneva National. It’s not that I dislike other area courses, as Abbey Springs is supremely beautiful and the Grand Geneva’s Brute is a challenge that haunts my most green dreams, it’s just that the three courses at Geneva National fit my eye. You know what doesn’t seem to fit anyone’s eye anymore? The actual real estate at Geneva National. I’ve proclaimed my long term love for GN often on this site, and I’ve even let known my own personal desire to perchance move back to the gated community, but those two personal opinions cannot mask the fact that Geneva National is stumbling to the end of a horrendous year.
First, the only few positives that I can find. There are only 117 units available as of today in GN. A couple of those are proposed specs, a couple more are miserable time shares in the even more miserable Private Quarters Club. These low inventory numbers are good for a market suffering a severe lack of liquidity. A quick detour into fractional ownership- I hate it. I don’t think it’s a model that appeals to the good senses of Midwestern clientele. Perhaps expensive timeshares work out west. Perhaps they work in Hawaii, but they just don’t work well here. The Grand Geneva has had success selling their timeshares, but largely on the strength of the Marcus network of resorts, and mostly because they’ve been in the timeshare business for quite a while and know how to run such an endeavor. But even the experience of the Marcus folks hasn’t stemmed a rapid tide of foreclosures on customer owned timeshares there, as timeshares are roughly as liquid as a bag of gravel. The Private Quarters Club, positioned at the extreme north end of GN, is bound to flail its way through the next several years, as buyers are now too skeptical of this failing project to give it a second chance. Only my opinion of course.
Of the 117 available units, 44 are priced under $250k. This includes a few of the pesky timeshare units (priced at $25k, $45k, and $55k, dis-respectively), but mostly consists of Fairway units, Club Cottages, Lakeland and Woodland condominiums, and some of the never-should-have-been-built Cobblestone Court units. The inventory here is getting cheap, but GN has found a way to avoid any run away foreclosure trouble. In a development with more than 1000 units, there will always be a few ongoing foreclosures and listed REO properties, this much is unavoidable. But GN hasn’t experienced the sort of foreclosure rash that has plagued other large developments (See nearly every large high rise in the City of Chicago at the moment). In spite of ongoing foreclosures, that will likely continue for the next several years and beyond, GN has held up fairly well in terms of paper value. It’s the liquidity, or lack thereof, that most concerns me.
Only 25 sales have occurred in GN YTD, and that number should be enough to make anyone with a vested interest in GN sick to their stomach. The market probably peaked in 2005, when the same YTD period saw 101 GN sales. These numbers require little explanation- they simply reflect a market in the midst of an absolutely putrid year. While many of the other individual market segments at the lake have improved over 2009, GN is actually 5 sales behind the anemic pace set last year. It’s troubling to see the market lag behind the broader vacation home market here, and I can’t really say why GN hasn’t improved with the rest of the market. Inventory is ample, though not overflowing. Prices have dropped considerably, and there have been scattered REO’s available that should at the very least increase volume statistics. The market also depends on a buying demographic that should be lured by Japanese-style interest rates, yet all of those factors haven’t meant much to the buyers who should be interested in GN.
Perhaps 2011 will be better for my beloved Geneva National. While I don’t like seeing GN being repeatedly kicked while it’s down, I do think GN should be attracting more interest as it is the most visually appealing development in all of Southeastern Wisconsin, and the housing stock is far superior to what exists at Abbey Springs and other local condominium developments. I have little hope for a turn around here anytime soon, though there is no doubt that the liquidity issues plaguing this beautiful development post a tremendous buying opportunity for buyers in search of huge square footage, a plethora of amenities, and quite possibly the best golf the Midwest has to offer.