Normally, lakefront sales only bother me when some buyer who decided not to work with me pays too much. This has been the case a few times this year, but gladly this unfortunate scenario has played out fewer times this year than in years past. Today the issue isn’t a buyer who paid too much, but a seller who sold for too little. Mr. Free Market here wouldn’t normally complain about such a phenomenon. After all, the buyer sets the price, not the seller. Right? That might be how it works, but there are times when a seller sells for too little by possibly going about the sale in the wrong way. It’s my humble opinion that the most recent “lakefront” sale was unnecessarily sacrificed. Great for a buyer, probably bad for the seller.
The vintage cottage at 614 Sauk Trail in Fontana closed this week for $980k. While I don’t know the circumstances around the sale, and whether or not perhaps personal property concessions were made or property was traded, the sale to me looks really low. Like really, really low. It should be noted that though the home appeared to be lakefront, it wasn’t really. All homes in Glenwood Springs border not the water, but the common parkway owned by the collective association, not the individual lakefront owner. So this wasn’t a true lakefront property, but that doesn’t mean it wasn’t a tremendous deal at this price. The most recent list price of the property was $1.549MM. An earlier asking price was $1.9MM and change. The problem I think I have with this sale- if it is in reality what it appears to be on paper- is that the seller may have missed the market by not reducing their price yet again, this time into the magical strike zone of $1.3MM. Heck, undercut that magical lakefront price point and list at $1.25MM and watch the buyers mouths go all foamy.
I’m not thinking there was much money left on the table with this deal, but even $100k is a considerable amount of money when there’s a $100k sized hole in your bank account. It’s easy to second guess this transaction, but it looks to me as an outsider on this deal that the seller needed to reduce the price further in hopes of actually selling for more money. That’s a strange phenomenon, but it makes complete sense to me. Regardless, the property is a gem, and with a significant renovation it could be one of the more charming lakefront cottages in existence along the shores of Geneva Lake. I’m a fan, and to the buyer who purchased this unique property for a mere $980k, it was a job well done.
The sale crossed off another entry level lakefront (in practice, not theory) from our dwindling list of entry level lakefront homes. Something that is overlooked by most entry level buyers is that we do have a finite supply of entry level lakefronts available. Sure there are handfuls in the Lake Geneva Highlands and on Walworth Avenue in Williams Bay, but I discount those severely for their locations. It’s not just me doing the discounting, it’s the market- a market that has shown a measurable preference for lakefront homes outside of these two lesser locations. At some point, as the last of these entry level lakefronts are sold and renovated or torn down, buyers will have to reconcile themselves to the fact that entry level lakefront might, as a rule, have to start getting more expensive. We’re not at that point yet, but the day is coming, and with each and every lakefront sale of an entry level property priced sub $1.5MM, the day is getting closer.