2009 Lake Access Market Review

I have a special place in my large heart for the entry level lake access market at Lake Geneva. I define this market as every single family home with private lake access priced under $400k. Generally, homes with lakerights can be had in the upper $100k’s, but the bulk of these entry level properties are priced between $250k and $400k. These properties will typically not have a transferable boatslip (though there is one property priced at $350k with a slip), and they will generally not have a lakeview (although my Cedar Point Park, Summer Haven, and Loch Vista Club listings are in this price range and all have fantastic views). So what is it that you’re buying in this market? You’re buying the ability to wake up on any given Saturday or Sunday morning, slip on your sandals, and stroll down to a private association pier and park. What you do there is limited only by your aquatic imagination, but a nice morning to me involves a cup of coffee, a newspaper, and if I get my way, a fishing pole. You get afternoons full of fun and sun, and memories of your children and friends splashing and lazing the day away. While the associations differ fairly significantly, the piers will always be white, and the water always clear and inviting.

My fondness for this entry level lake access market is based on my knowledge that such a property can provide the owner with a full fledged lake experience at a fraction of the price of private frontage. Within the entry level market, a buyer seeking to purchase a lake access home has plenty of options, and associations that typically offer inventory in this price range include Cedar Point Park, Country Club Estates, Indian Hills, Knollwood, Loch Vista Club, Summer Haven, and Oakwood Estates, to name a few of my favorites. Which association you prefer is entirely up to you, but for those looking for a large lakefront park with sand beach, Knollwood would top my list. If you’re looking for a classic lake association on a smaller scale and require convenient proximity to the water, then the Loch Vista Club would be to my liking.

This market is generally fairly liquid, and the 2009 sales total of 18 outpaced the 2008 total of 16. Even with 18 entry level lake access sales last year, we’re still a long way off from our 2006 figure of 28. Regardless of the volume decline, the market has been fairly active, and we can expect it to continue in that manner throughout 2010. Properties in this price range have probably only declined an average of 15% from their market highs, though there are some properties on the market today that will be sold for as much as 35% off those previous valuation highs. A vacation home priced around $300k is attainable for many vacation loving Illinoisans, and the softening of prices has given a buyer in this market many more opportunities to find ideal locations than were available to them in the past. As of today, there are 27 such entry level properties available, ranging from a very basic cottage in a basic location for around $199k, to a lakeview cottage in the Loch Vista Club for right around $400k. If you’re looking for a property that doesn’t need much work and still affords access to a relaxing lakefront association, there’s a property in Oakwood Estates that might be just perfect for you.

I see the entry level market increasing in volume as we move through 2010, primarily due to an increase in confidence of buyers looking in that $300k price range. A purchase in this price range usually involves a mortgage of some kind, so low interest rates throughout at least the first half of the year will provide buyers with affordable financing options. Likewise, appraisal issues that have, at times, (thanks HVCC!) plagued the $500k to $900k price range are not much of an issue in the $300k range. Foreclosure activity in this price range will rise, if ever so slightly, in 2010. While 2009 saw foreclosures primarily in Country Club Estates, we should see some REO inventory in Country Club, Cedar Point Park, and the one prized pending foreclosure in Buena Vista. These foreclosures will occur randomly throughout the coming year, and we can expect every REO property to sell fairly quickly at bank discounted prices. If you’re holding out for a REO purchase here, you need to email me to tell me what you’re looking for, so that when the property is listed, you can pounce. With REO’s here, if you snooze, you almost certainly lose. Buyers of REO properties also need to either be cash buyers, or come in with prequalification letter in hand. There are annoying intricacies that are commensurate with an REO purchase, so be sure to ask me about those ahead of time.

I’m looking forward to a good year for the entry level lake access market, and see some real value on the market right now. Properties that have sat for several months during 2009 should be primed to sell for less in 2010, and some of these lake access properties will be selling for as much as 35% off their previous market highs. Buyers who are contemplating a lake access purchase would be wise to be active in January, as the deals that are available now tend to dry up as we move closer to summer and sellers optimism builds. Cliche as it may sound, summer is going to be here sooner than you think, and lord knows sweating in the suburbs on sunny Saturday afternoons isn’t anyone’s idea of fun.