As 2010 rapidly pushes us into 2011, the lakefront market on Geneva Lake isn’t quite finished yet. Earlier this week, a stellar offering on Basswood Drive closed for $3,112,500, and with that sale became the 17th Geneva lakefront sale of 2010. Or the 18th if you count the sheriff’s sale that sold outside of the MLS, which I do. Or the 19th if you count the sale in the South Shore Club for $1.75MM, which I don’t. Either way, a spectacular year for the lakefront market here continues to sparkle, and with at least three other lakefront properties pending sale as of this morning, there is no doubt that 2010 was a rebound year of epic proportions for our lakefront market here.
The Basswood sale closed at a solid price, regardless of which party you were rooting for. The buyer secured 195′ of prime frontage with an interesting, and very serviceable home on it, while the seller closed above $3MM, making the sale in line with previous sales on Basswood. It’s a good sale all around, and both buyer and seller should be pleased with themselves. Basswood is aggressively desirable, and no further evidence is needed to back up that statement once you take a drive down that storied lane. The tear down craze that has affected Geneva for years has been particularly concentrated on Basswood, with the vast majority of the lakefront homes on that street having been constructed in the past decade or so. It’s a terrific street, and those who live there or want to buy there would cite the Linn Township location and the resulting lower taxes, deep, wooded lots combined with protection from the southerly winds and easy access to Fontana all as justifiable reasons for the appeal.
While I have a strange feeling that several of the sales this year were a bit haphazard, and by that I mean they were completed by buyers who didn’t fall in love with a property as much as they found that property to be the most appealing of the available lot, this Basswood sale makes complete and utter sense. The property is marvelous, the location divine, the price befitting, and the timing impeccable. On the surface, this was an easy sale. With market time of 184 days, the sale took a few months to achieve, but I believe most anyone, anywhere, would gladly allow a 6 month window to sell their $3MM residence. The original list price of $3.95MM proved to be too high, as most knew it would, but with a significant reduction to $3.4MM the seller found his buyer- a buyer who paid a small premium over the last sale on Basswood, a $3.050MM transaction that closed during 2009. That property from 2009 had less frontage (117′), but more land (2.87 acres), and a smaller home. Even so, the sale proves to sellers that buyers know the market better than you think they do, and very few of them will pay more than recent comps suggest they should just because you had a really glossy photo on your brochure.
The sale is nice (not my buyer or seller, unfortunately and shamefully), but the real test to see if this was a good buy or a great buy unfolds over the next couple of years. If the buyer keeps the existing home as is or chooses to do a significant, but measured, renovation, then the buy is a great one. If the buyer decides to knock this home down in favor of a constructing new, as has been the overt trend in recent years here, then the sale gets a bit iffy. Why? Well, for starters, because even though there are prodigious numbers of homes valued in excess of $6MM on this ethereal lake, very few of those expensive homes ever sell. If the buyer has a land basis of $3.1MM and constructs an 8000 square foot house for around $350 per square foot and has an additional $3MM+ into the project, is that a good idea from a market perspective? Probably not, although the location does protect against overbuilding, as Basswood, along with Snake Road, North Shore Drive in Fontana, South Lakeshore Drive in Fontana and Lake Geneva, are essentially impervious to overbuilding. Even so, whether this buyer keeps the existing home or tears down and builds new, there is no doubting this location or the pedigree of the water the home will be built near.
Stay tuned next week to see if we register one more lakefront sale (I think we will). Starting January second and extending for the ten days after that, I’ll provide Realtors county wide with their talking points for the next 12 months, and you with the best year end market reviews and 2011 market predictions imaginable. I’ll look back at the 2010 predictions and reconcile those thoughts with what actually took place in 2010, and we’ll see just how good I’m getting at directing you in this little game of Lake Geneva real estate.
Nice work on the blogging David! 🙂