Earlier this year, my older brother landed a job working in a tall building in Chicago. And as with his previous job in the same city, I asked that he spread around my Lake Geneva paraphernalia in hopes of hooking one of the big fish that work with him in that very tall building. And being a good brother, he did a little fishing for me. The reactions he garnered were the same as they had been at his previous place of work, which displayed a general mood, or perhaps impression, that Lake Geneva was a place for rich folk. I’m fully aware that my post from yesterday could have enforced that impression, that Lake Geneva is a place for only the Chicago elite; for those who chew on fat cigars while discussing mergers and acquisitions from the helm of their wooden boat that unapologetically costs more than the average persons home. But the reality is that Lake Geneva is not only accommodating for those who seek a simple, affordable place by the lake, it’s downright enthusiastic about it.
Enter the new market at Country Club Estates. Country Club has long been a fixture in the Lake Geneva vacation home market, a place where discerning, vacation loving Chicagoans and their suburban neighbors could vacation under a sun splashed canopy of oak and maple trees. Prices here have always run the gambit from quite affordable to borderline ridiculously expensive, and during the height of our selling boom here prices escalated to a point where even the very cheap homes were selling for $300k and above. The broad market has shifted, perhaps to a point where the average lake access home is off as much as 20% from the market highs, and Country Club has shifted in lockstep with that broader market. While some associations buck the pricing trend and in turn embrace a complete and irreversible lack of liquidity, Country Club has been more than happy to adjust downward in order to attract buyers that have proven elusive at best, absent at worst.
Country Club has always been a tale of two, or perhaps three associations. With boundaries that run from County B on the south and South Lakeshore Drive to the north, this is a large association with a huge variation in housing stock. A darling cottage on Arrowhead with an inspiring view of Geneva Lake and the Abbey Harbor may be $1.1MM, but a simple cottage further south in the association might have been $300k. The area on south Tarrant is home to large, new homes, with prices that have always been elevated due to the combination of location, size, and age. The shift in the market has not affected the list prices of high end properties in the association much, but the cheaper homes, well, they’ve become even cheaper. Sorry, more economical.
The entry level Country Club homes that had been selling in the upper $200k’s and low $300k’s have been falling over the past three years, and now there are two homes for sale in Country Club Estates priced less than $180k. Granted, these are the only two homes priced under $280k in the association, but it proves that the cost of admission for a home near the lake with lake rights has indeed dropped to a level where the idea of a Lake Geneva vacation home has come into play for those that had previously been unable to entertain the idea. This development, I believe, is good.
Pricing adjustments in the lower reaches of the market aside, Country Club is scuffling a bit this year. The upper end of the market features a couple of homes that I believe to be a touch too high for this market, and I base that opinion off of the drop in prices for entry level lakefront. Remember, if entry level lakefront drops, the rest of the market stacked up behind it must drop commensurate. At least that’s what I think, but I’m just a kid with a computer. The rest of the market at Country Club is bottled in a fairly narrow price range that runs from around $300k to $500k. Of the 22 homes currently on the market in Country Club Estates, not a single one appears to have a pending contract in place.
A home on Arrowhead just closed for a touch over $300k, bringing the YTD total for the association to a meager six sales. Even more telling, of those six sales, the most expensive closed at $377,500. That sales range doesn’t exactly bode well for owners trying to sell homes in the $400k+ range, but you already knew that. The same period during 2009 saw nine closed transactions, and during a year where most individual markets are keeping pace with the 2009 sales totals, Country Club is obviously lagging behind. From my chair this morning, it’s easy to see that price is the only thing holding this market back.
The sluggish activity and softening prices in Country Club is a boon for buyers, particularly for those seeking entry level properties in the association. For those who have long written off Lake Geneva as being too expensive, it’s time to take another look. Lake Geneva has a friendly, softer side, free of fat cats and fat cigars and even fatter boats, and that tender underbelly is on display this summer in Fontana’s Country Club Estates.