Aside from one lakefront priced in the mid $2MM’s on the south shore of Geneva, I think the best values available in the Geneva lakefront market exist in the entry level price range. This entry level market has softened, as has the rest of the market, but the softening here creates a bigger impact than in other parts of the market. How so? It goes like this. If a house was worth $3.8MM at the height of the market and it’s not worth “only” $3.2MM, it’s still a $3MM purchase. Along those same lines, if a house in Country Club Estates was worth $380k, and it now sells for $315k, the impact of the reduction isn’t profoundly significant. These reductions where properties remain in the same relative price range and still appeal only to the same basic buyer are different than what has happened to some extent in the entry level lakefront market.
There was a time when the most economical (read: cheapest) lakefront home on Geneva was priced right around $2MM. This was a difficult time to be an entry level buyer, which is not news to someone who was indeed an entry level buyer during that time. That brief, but agonizing span of time, gave birth to the rise of off-water sales in the $1MM+ range. If lakefront was going to cost $1.9MM, and the home that was one off the lake with slip and view was available for $1.1MM, it seemed like a reasonable idea at the time to buy that off-water home and realize $800k in “savings”. Fast forward to today and entry level lakefront has fallen to a range where I fully expect to see more lakefront sales in the $1.1MM to $1.3MM range, which is a wailing, drum-piercing cry from the previous required outlay of nearly $2MM. Buyers who want to spend $1.2MM are rarely the sort who feel like spending $2MM.
The MLS tells me that there are currently 8 lakefront homes priced under $1.8MM on Geneva as of this morning. The cheapest (read: most economical) is priced at $1.395MM though the property, located in the city of Lake Geneva, only has a small amount of frontage, albeit level frontage. Next up is a lakefront for $1.485MM, then the prices rice incrementally to just under $1.8MM. One entry level lakefront is under contract as of this morning- a home that I always liked and tried my best to sell over the past year. The lakefront is on the Cedar Point bluff, so the frontage is elevated, but the views are forever and the home has been significantly remodeled. This home, priced at $1.694MM was previously offered for around $2.2MM. That’s the sort of change we’re seeing in the entry level market, and I for one am happy for the improved motivation of these sellers.
While the market continues to slowly improve, I think the buying opportunities in the entry level lakefront market are going to persist throughout this year and well into the next. Buyers are present, but they’re still looking for deals, and the truth of the market is that even if these properties start selling more frequently in the $1.1MM to $1.3MM range, the sellers are still, for the most part, realizing a significant amount of appreciation. These entry level lakefronts were selling in the $550k to $750k range as recently as 1996, so the profit is still substantial, and for now we’re able to put off holding bake sales on behalf of these current owners. For buyers of entry level lakefront properties the ball remains in your court. Bouncing hypnotically slow. Up and down, lazily even. It’s right there, patient as ever, just waiting for you to do something with it.
