There can only be one individual market that I find to be the most curious. While the lakefront market has my heart, there’s always been something about Geneva National. Maybe it’s because the development played a meaningful role in my own personal real estate story. Or maybe it’s because I developed a theory about Geneva National in the early 2000s that didn’t play out the way I thought it would, so I’m left feeling a bit let down by GN. Whatever the reason, I feel an attachment to Geneva National and I find myself rooting for it, even while I can recognize what’s wrong with it. Today, there’s very little wrong with GN, and for that we should all be glad.
For the year just ended, Geneva National printed 100 built homes and condominiums. Of the 100 sales, ten closed over $700k, and three of those exceeded the $1MM mark, including a nice sale I closed in December for $1.195MM. The high sale for the year was an off market sale (then later recorded in the MLS) at $1.55M. For all of the upper bracket strength, GN still closed 17 units under $200k, meaning GN remains a market for all sorts of vacation home budgets. To put 2020 into context, the high sale for GN in 2019 was just under $700k, even though 102 total transactions were closed. 2019 closed 34 units under $200k, proving that the 2020 market featured so much more strength at the upper end.
For new readers who might now know much about the history of GN, the relatively short history here is quite complicated. Geneva National tends to run hot and cold in a remarkably binary way. There seems to be no such thing as normal here, just great markets and terrible markets. My theory as to why this is the case involves the scale of the development. It’s huge. Massive, really. Because of that size, it requires significant buyer traffic each year to absorb the inventory, and because our markets are relatively low volume at all times, GN can sputter out during years, or cycles, when buyers dry up. The large number of existing vacant lots has also put pressure on built inventory, as buyers have long wondered what the sense is in buying a $750k house when there’s a lot available for $20k right down the road. Today, the vacant lot absorption rate has increased and so has the liquidity of the built homes. The result is a dynamic market, the likes of which GN hasn’t really ever experienced.
As of this writing, there are six available homes and condo units in GN. This is remarkable. Times were, GN would have 100+ units available at any given time. While my typical concern for Lake Geneva area markets involves having enough inventory to keep buyers interested and to keep the markets well oiled, the concern for GN has always been one of excess inventory. So while I spend my days worrying about finding more lakefront inventory, I see the 6 available properties in GN and I’m happy for GN. The lack of inventory will cause increased buyer interest, and the increased buyer interest will drive prices up. For Geneva National, the concept of uniformly increasing prices has been relatively foreign, so I’m happy to see appreciation inside these well maintained gates.
It makes good sense that GN would benefit in this current cycle. The market in GN is full of affordable condominiums and homes, and the development is aesthetically attractive. Consider a $1M budget in GN will offer you a choice of large, impressive homes and oversized condominiums. The same $1M budget in the lake access range tends to get you some sort of terrible (but charming!) cottage that may or may not be close to the lake. GN also feels like a nice place to have a primary home, which isn’t always the case for lake access locations. This makes GN an ideal candidate for the buyers who are moving from Illinois to set up residency here (higher taxed residency, but I digress). Covid isn’t the biggest reason GN had such a great 2020, but it sure did help.
For the first time since I started writing this blog more than 13 years ago, I have no concerns for Geneva National as we look to the new year. The market is low on inventory, high on momentum, and should perform well this year. I suppose I have some concern about spec home builders building too many spec homes, but that’s a very mild concern at this point. Low interest rates, low inventory, and Chicagoans facing down the prospects of another locked down summer will all lead GN to another banner year, albeit with much lower sales volume. GN, it’s been a wild ride, and I’m glad to see you finding your share of the limelight.
Photo Courtesy Ryan Bensheimer, Ideal Impressions Photography