In the midst of every economic recovery there is an omnipresent danger. Sometimes the danger lurks in the shadows, huddled under bridges burning tires, other times they exist in the open, brazen and bold, painted on the faces of the individuals who would administer momentum killing moves with glee. Just as confidence, or lack thereof, is the driving force behind any economic boom or bust, misplaced confidence during times of fledgling recovery can be levied with even more dire consequences. A confident seller is a stubborn seller, and a stubborn seller is the bane of my very existence. If you’re a home buyer, or a fan of liquid markets, they should score just under the pastie and right above metal piers on your all time Things I Hate List.
The Lake Geneva vacation home market is going to slowly churn to life over the next 30 days, even if many Realtors breathlessly proclaim the market engulfed in flames. Smoke, as it happens, is not fire. A smoldering recovery is not a fiery one, even if certain agents have been blessed more than others with an abundance of sales and can be found, at any given time, crouched near the smokey market, fanning and blowing furiously. The market remains soft, and it will remain soft throughout 2011, even if volume may continue to increase. An increase in volume is wonderful- it can even mean a property you’re watching sells to someone else (how dare it!), but it doesn’t mean the market is a brown paper package, and it most definitely isn’t tied up in strings. Which reminds me that it’s a full moon one of these nights, which means that somewhere, alone, with a perplexed face and vacant stare and a cold glass of unicorn tears in hand; Madison is either sad and/or happy, and/or confused.
As our Lake Geneva market finds its winter footing and begins the slow ascent towards another ethereal summer, inventory will steadily build, and many properties that were available last summer and fall will be made available once again. This annual inventory build is typical, and by the end of February there should be ample inventory to fulfill any buyers Lake Geneva wish list. While a February market increase might seem strange, you must remember that in a vacation home market like Lake Geneva, there will be many closings in April, May, and June, as buyers wheel and deal with the hope of being settled in time to drink up every soul quenching drop of Lake Geneva summer. Vacation home buyers who close in August are still cool, but closing on Memorial Day weekend just in time to host your friends for a grill party lakeside is unrivaled. This summer lust dictates an active early spring market, as a typical lead time (perhaps called escrow as TV agents are want to do) from contract to close is usually somewhere between 30 and 60 days. A contract written on February 15th, negotiated until February 22nd, might close on April 15th, allowing six solid weeks for the new buyer to meet the Pottery Barn delivery trucks and scream at their painter that white does not mean linen white, and it sure as heck doesn’t mean antique white. Sheesh.
So while our Lake Geneva inventory builds, the recovery killing danger that is an excited, confident seller, lurks behind MLS numbers and slick brochures. I’ve been watching the slow inventory build this month, and I haven’t been pleased with some of what I’ve been seeing. There are several properties hitting the market with asking prices that reflect 2006, which is a problem. These absurd asking prices and the glib sellers behind the numbers can present an insurmountable road block in our quest to engineer a full volume recovery, as we did last year, and sustain it through 2011. If sellers view an increase in volume and consider it a mandate to list higher and negotiate less, then our little recovery that I’ve been spoon feeding warmed milk to for nearly two years will die a cruel and premature death. And I, for one, will be bitterly disappointing.
So buyers, relish the coming inventory boom, and let’s get together to try to find the vacation home of your dreams. Hopefully we won’t run into a stubborn seller like one that I’m currently up against, and hopefully we’ll be able to negotiate like it’s 2011. If you’re reading this and you’re not sure if you’re in the market, just email me anyway and we’ll start a conversation. I got in trouble with a buyer last year for not being pushy enough, so don’t fear my sales pitch, no matter how intoxicating and/or dizzying it may be. Sellers, please don’t let the volume increase of 2010 and the breathless pitch of other agents influence your list price to the high end. Buyers are buying because they view this a good time to get a deal, and if you’re not that deal, chances are the seller down the road will be. Keep your head up, but don’t let it get anywhere near the size of mine. Literally, not figuratively.