At times I feel as though the Lake Geneva real estate market is little more than a puzzle. Not a puzzle like a riddle, or a puzzle in the way that Jenga is probably technically a puzzle, but a simple puzzle with a box and several hundred, or thousand, pieces. The game is simple, this puzzle. Set the box on end on the edge of the table, spread the pieces out action side up, find the ones with straight edges, and assemble from the outside in. The picture on the box is a clue, but it isn’t important. The pieces fitting together is the important thing, each one playing a role in the completed image. A hot air balloon perhaps. Maybe some kittens. Puzzles are not subjective. They are not open to interpretation. They are what they are, and a box with kittens and yarn on it will have no choice but to turn into a completed puzzle with kittens and yarn on it.
This week there was a sale that caused me to look at the front of my box and wonder what on earth I’ve been doing all this time. The box shows kittens and yarn. The puzzle shows mostly bits of kittens and pieces of yarn, but the piece that I found this week quite obviously doesn’t belong in this puzzle. In this way, markets are not at all like puzzles, unless you routinely put together puzzles of kittens that have pieces of hot air balloons mixed in. If you have puzzles like that, you should really stop buying puzzles from garage sales. Now back to my puzzle and the piece that has no business being in mine.
Indian Hills is a nice association. It really is. The lakefront park is nice, with green grass and white piers. There was a sale this week in Indian Hills that makes as much sense as Russell Crowe cutting out an ice cream cone and putting it on his wall along with all of those cut out letters. The property was fine, but it was not special. There was no huge lot, no inspiring view, no alluring boat slip, no incredible landscaping, no pool, no tennis court, no fabulous finishes. There was proximity, but nothing memorable. I found the property unremarkable. Yet a buyer just paid $755k for a house with no real view, no slip, no special proximity, and a list price of $775k. With this sale, I look at my sensible puzzle, and wonder just what it is I’m supposed to do now.
I understand that buyers find properties they love. And when they fall in love with houses, they do irrational things. I fall in love with objects too. I get it. I do. But real estate in my eyes is a value game first, and a love thing second. It’s like with spouses how you more than likely fall in love with them at first because of their looks or car or smile or pony tail, but you don’t go marry them based on those superficial judgments. Falling in love with real estate is fine, but only when the numbers make sense. This is how I view real estate, and this is obviously what sets me apart from the broader market. Not everything is fabulous, not everything is worth your hard earned money.
In a stroke of irony, the MLS today shows two lake access sales. The buyer that I represented at the Lake Geneva Club paid 75% of the asking price. The buyer in Indian Hills paid 97% of the asking price. That’s not a fair way to judge all sales, but it is an indicator that should be considered. If there were other buyers, and multiple bids drove the price up, I understand that. If the price is so magical and the market timing so right that a high price must be paid in order to secure a value opportunity, this I also understand. The home had a previous list price that was far higher, but that higher list price didn’t make a lot of sense to me either. To purchase a home that had been on the market for more than a month that lacked a reasonable view or slip or superior finishes makes little sense to me, but I’m not the buyer, and in a marvelously free country, we’re all obviously free to do as we please.
And that’s what I took out of this week in Lake Geneva real estate. There is value in this market. There are exceptional properties and there are exceptional values. Just ask me, and I’ll tell you which ones excite me, and why they do and how they fit into the market. There are also homes that make little sense at anywhere near their asking prices, and at times, even during a rainy and cold Midwestern spring, buyers will buy properties for prices that turn my typically sharp mind to a confused collection of misfiring synapses. For now, I will go back to my puzzle. I will throw out this odd piece with the bit of rainbow colored hot air balloon on it, and I will proceed to match up the stripes on these little kittens. If you’re reading this, and you’re a buyer in Lake Geneva, and we’re not working together yet, I’m really hoping I don’t have to write about your some-day purchase in this same incredulous tone.
Have a terrific Memorial Day weekend. Hopefully it’s spent at the lake. A respectful thank you to those who have served and sacrificed in order to provide me with the freedom to write about kittens and yarn on glib days like today. My appreciation is profound and increasing.