I think it’s a shame that foreclosures are viewed so negatively. They are negative for those directly involved, and the impact on a housing market over mostly the short term can be identified as being only a negative, but longer term there is a very bright silver lining to this stormy cloud. Foreclosures nationwide are serving the long term health of our housing markets by performing one very necessary task: removing properties from weak, disinterested hands and placing them in strong, motivated ones. Foreclosures represent renewals of sorts, of taking a property that has likely been neglected and offering it to someone, to anyone, who might be a better steward. That isn’t to say that foreclosures aren’t unfortunate, but it is to say that no one could argue that the glut of them over recent years isn’t paving a way for a stronger long term housing market.
The Lake Geneva market was, at first, mostly unaffected by the foreclosure boom that was spreading across the nation. In time, however, we caught a little foreclosure fever too and foreclosures have been a presence here ever since 2009. They have weighed on the market and they have done damage, but they have also provided opportunity. Opportunity for those out over their skis to pull back and attempt the softest possible crash landing, and opportunity for buyers to secure lasting value at momentarily distressed prices. The folks at Realtytrac tell us that foreclosures are ebbing. That the massive glut of these distressed properties is being absorbed by the market and that everything will soon be sunshine and roses and the teeniest little whiskers on cuddly little kittens.
But of course this can’t be true, because while foreclosures and defaults and delinquencies are ticking down on a nationwide level, they are actually ticking up in certain states (ahem, Illinois). So foreclosures are not only going to be here for this year, they will be here next year and the year following. Lake Geneva will not be immune to continued foreclosure trouble, though our definition of trouble would likely be another market’s definition of utopia. See, even our problems here aren’t even that bad.
During 2012, there were foreclosures in our vacation home market. There were at least 4 REO sales in Geneva National last year, perhaps more that weren’t labeled as such in the MLS. There was just a single REO sale in Abbey Springs, and shockingly just one lakefront condominium sold as REO this year. The lakefront condo market continues to surprise me. The volume is slight, the combination of dues and taxes not insignificant, but still the market holds its own and rarely succumbs to the foreclosure process. It’s a sign of strength, and anyone considering the purchase of a lakefront condo here should be impressed by the stability of the current condo ownership.
The lake access market had a few foreclosures, two in Cedar Point Park, one in Indian Hills, and four in Country Club Estates. There was a short sale in Somerset and a short sale in Geneva Bay Estates, and two lakefront REO sales- the infamous sale on Maple Lane and of course my large sale at Clear Sky Lodge which was the most dramatic REO sale of this last year. Interestingly enough, four of the sales in Country Club Estates were all priced around $200k and under, meaning it wasn’t the higher price range affected by the economic downturn as much as it was the entry level lake access market.
So what to expect for 2013? I’m betting on fewer overall foreclosures, but by the skinniest of margins. Defaults will continue, and foreclosures will continue the cleansing that any housing crisis demands. New owners will seize new opportunities and pick up where prior owners left off, but perhaps without quite so much crushing debt. I always watch the lis pendens filings and sheriff’s sale schedule, so if you’re intrigued by this small but meaningful segment of our market you’d do well to contact me so that I can keep you near the very top of my VIP list.