I’m a touch tardy in delivering this morning’s post. I was digging through lis pendens filings and sheriff’s sale notices. I was doing all of this for you. You’re welcome. The Lake Geneva foreclosure scene remains mostly unchanged by my account. This is a market affected by foreclosures but not overwhelmed by them, a market that has acknowledged they exist but has been reticent to allow these unruly instruments of destruction to take the wheel. This is a market that exists in the form and fashion that it does largely because of strong ownership in this segment, and the lack of highly leveraged, speculative situations. Even so, foreclosures will exist in every market, and Lake Geneva has proved to be no exception.
There are foreclosures brewing in most segments of our Lake Geneva market, but the single family and condominium portions remains the least affected. Geneva National is looking a bit weak right now, and I’ve seen several recent lis pendens filings hitting the books during the month of April. The problem with GN Is that it is such a large development, with all sorts of inventory priced from $100k to $2MM, and there have been lots of speculative plays in there that have turned sour over recent years. As a result, GN should and will experience more foreclosures than the broader vacation home market here, and even though I see perhaps 6-10 pending at the moment, this is a number that shouldn’t be viewed as anything other than normal. The heavy dues burden of some condominiums can force foreclosure simply because of the increased mandatory monthly outlay.
I see a lis pendens on a condominium in Vista Del Lago this month, which I believe to be the first lis pendens I’ve personally seen in that association over the past year or so. It’s important to remember that lis pendens filings do not, in and of themselves, signal eminent foreclosure. Some owners will purposefully default in hopes of securing a loan modification, while others with cyclical incomes may simply fall behind from time to time and then play catch up. Lis pendens is just the first step in a slippery path to foreclosure, and I would be foolish not to disclaim the truth that many of these lis pendens filings will not turn into foreclosures, and the resulting REO inventory that the market craves.
There are lis pendens filings attached to at least one property in Country Club Estates, as well as a sheriff’s sale or two scheduled for properties in that lake access association. Country Club is a unique example in our market, or really in any market, as it has withstood a slight trickle of foreclosures without having the marketability or pricing of the existing non-REO inventory negatively impacted. It has, in other words, found a way to absorb REO inventory without letting the price drops escalate. Indian Hills has at least one pending foreclosure, as does Cedar Point Park. Remember, just like with Country Club, a slow leak of foreclosure does not flood the broader association-wide market.
Abbey Ridge as at least one foreclosure, as it has for quite some time. Along with another foreclosure that starts and stops in another part of Fontana, this Abbey Ridge unit has been on and off again with the sheriff’s sale and lis pendens notices for quite some time. It’s important to note that I didn’t see anything brewing in Abbey Springs, which is a nice sign for that market. Now, onto the grizzly business at hand involving a potential foreclosure of a full fledged estate on Geneva Lake. The owners of most of the estates on Geneva are supremely well-heeled businessmen or women who have pockets as deep as the water off of Conference Point. These are typically not the sort of owners who experience financial trouble to the extent of foreclosure warnings from banks. Notice I said “typically”.
The large estate that I see teetering in and out of trouble right now is one that I believe is primed to sell. I believed that prior to seeing the lis pendens filing, and now that I see it I believe in that possibility even more. This estate appears to have no business being involved in a foreclosure discussion, and the default might simply be a means to a loan modification. But if the lis pendens filing is legit, and the note is in trouble, watch for this property to sell sooner rather than later as a buyer swoops in to scoop it up from a seller that might be more motivated than most originally thought. Stay tuned on this one. If you’re interested to learn more about this lakefront property and some of the others mentioned in this post, I’m hoping by now that you know who to email.