I remember well the first time I ever walked through the Harbor Watch condominiums in Lake Geneva. It was a summer day, and I had just recently hurt my back for what would be the first of many, many times. I wore a suit that day, which may be the last time I wore that, or any suit. I limped through the building, attempting to stand as straight as possible, and I listened to the builder tell me why they did this and why they didn’t do that. I ended up listing the four units for the developer, proof that even a breaking back and a suit couldn’t keep me from success.
Listing success, that is. Because over a year or so I wasn’t able to sell a single unit there. The prices were high- sky high- and the lakefront condo market wasn’t ready for those sorts of prices, not then, and certainly not now. The building struggled, but in time it sold. For certain shame, I didn’t sell a single unit there. On Monday, the penthouse unit at Harbor Watch sold for $824,500. Now I’m going to tell you why it was both a good deal and a bad deal.
That same unit sold in 2004 for $865k, and I do believe that the sale at that time was of a fully finished unit, though there may have been a few final tweaks left for the new owner to complete, but even so. If we all believe, as I do, that prices for lakefront and lake access property here are hovering somewhere around the 2003 levels, just as the rest of the country is, then we’re also going to need to believe, or accept that this sale price was an accurate reflection of the market both then and today. The sale was right, the price acceptable, the lakefront condo market pleased. But that said, is this somehow a liquid investment or is it just an investment in liquid?
The Harbor Watch struggles with a location problem, which is important to remember, always. The same thing that makes it desirable- the downtown Lake Geneva location on the lake- is the same thing that makes it a difficult building to sell. While some people think of vacationing lakeside amidst the touristic buzz of a downtown, most people do not. This is why a unit at Eastbank or a unit at Somerset will have greater appeal down the road, and thus, greater possible appreciation. It’s like being next to a fire: Being close to a fire warms your cheeks and your soul, but being in that same fire just causes all sorts of burning and death. Being close to downtown Lake Geneva is a benefit, being in it can consume you.
That sale included, let’s see what the lakefront condo market did during 2012. The great news is that it did quite well, the bad news is that the baseline is so low it would be a greater feat to under perform. Technically, 8 lakefront condo units on Geneva Lake sold during 2012. Of those 8, I sold two- one at Eastbank for $750k and one at Bay Shore for $330k. Both of those sales represented value to the point of if you asked me whether I’d rather be at Eastbank for $750k or Harbor Watch for $824k I’d just laugh maniacally until it became uncomfortable for anyone within earshot.
The 8 units are fine, but really everything sans the three units mentioned above and one Fontana Shores sale at $475k was in Geneva Towers. I don’t care much for Geneva Towers, so I’m not going to go into it now. I have no real reason for not liking Geneva Towers. It just feels like a city condo placed on Geneva Lake. Even so, the sales are nice and prove that people do like Geneva Towers, even if I don’t. So this past year will be remembered because of these sales but I’ll remember it more because of what didn’t sell.
Bay Colony had inventory all year, and nothing sold. Vista Del Lago had gobs and gobs of inventory, and nothing sold. I had one deal in Vista put together, but it fell apart shortly after it came together, so it matters little now. Speaking of Vista, are you aware there’s a two bedroom available there for $299k? This might not sound like a big deal, but consider that the last sale in Vista sub-$300k was in 2000. Now you can appreciate that for what it really is.
I don’t know if 2013 holds much better for the lakefront condo market on Geneva. I see reason to believe that some of the market will loosen up, and can envision a sale or two at Fontana Shores, and another at Bay Colony, and I’ll assume that the Somerset short sale will sell as will the large (now off market) unit at Eastbank. If we can sell those four units, then mix in a couple of unexpected sales perhaps at Vista Del Lago, and finally expect Geneva Towers to close a few more units as it always tends to, then we can repeat this 2012 sales volume into 2013. I think the fiscal cliff deal, no matter how ugly and embarrassing, will set the threshold for tax increases at a level that will bode well enough for the lakefront condo market. Expect deals to abound in the lakefront condo market this year, as strong volume still won’t mean increased prices in this segment, not for quite some time.