Geneva Lakefront Condo Market Update

Cars. They get us where we’re going. They haul things where those things need to go. They can wrap the driver in luxury, cradling them in the softest of leather that was culled from the most friendly, tender cows. They can also be utilitarian, big brutes of four wheel non-efficiency that propels the driver over whatever rubble dare rests in its way. They can burn diesel or gas, and some can run on batteries that may or may not burst into flames should you drive over anything but the smoothest of southern roadways. These are cars, and they come in all shapes and sizes, and they are available at all price points, from barely anything at all to many millions of dollars. Some of our most expensive fast cars hurl the driver through time and possibly space, and while wrapped in that ever-soft leather, the occupants are anything but comfortable. Fast cars are terrible riding cars, which proves how we all feel about cars: All that really matters is how cool we look when driving them.

This is why we drive shiny cars, in varying colors. We buy cars because we need to get from A to B and hopefully back again, but we pick the car we pick because we like the way it looks. We like the way other people might think it looks. This applies to all cars except mini-vans, the only vehicle ever bought out of necessity and not some shade of vanity. This is why we are lucky that lakefront condominiums are not cars, instead, they are the exact opposite. If the view towards your car is all that matters, then the view from your lakefront condo is all that matters.

This is because lakefront condominiums on Geneva Lake are mostly hideously ugly. They are. The Fontana Club is attractive, so is Harbor Watch, but the rest? Geneva Towers is considered a shoreline blemish, as are the other two towers on the lake, Bay Colony and Bay Colony South. Fontana Shores is mostly difficult on the eyes, as is Somerset and the entirety of Vista Del Lago. If we had to buy a lakefront condo based on the view from the water, we might never buy one again. Thankfully, we buy these condos not for what they look like on the outside, but from what we get to look at from the inside. The magic of an abhorrently ugly condo building is that the aesthetic means nothing when we’re sitting on a balcony looking at the lake. It means nothing when we wake on a Saturday morning and look out of our bedroom window and see a big blue lake spanning our view, our boat resting near the pier below. Lakefront condominiums will not win any architectural awards, but they can take your weekend and turn it from zero to perfect in the time it takes to walk from the parking lot to your lakeside patio.

To utter words that should not have been uttered even once over the past six years, the lakefront condo market is hot. It isn’t quite residential lakefront hot, but it is a compelling market that should be given some credit for recovering during 2013. Year to date we’ve seen eight lakefront condo sales on Geneva. Nine if you count the harbor front unit that I sold in the Abbey Villas in August. There is another harbor front Villa pending sale now, so ten if we get really aggressive and count that one too. There have been two sales at Fontana Shores (one was mine), two sales at Bay Shore (one was mine), one sale at Bay Colony (mine), another at Bay Colony South, and two at Vista Del Lago. The sales all make sense, with all prices paid being somewhat reasonable and in line with my expectation of the market. Two sales, in particular, stand out.

Vista Del Lago has had two sales this year, both printed under $300k. There are currently five condominiums available there, ranging in asking price from $270k to $599k. The units all have canopied boat slips, access to the indoor swimming pool, the clubhouse, the tennis courts. There are lots of things to do at Vista Del Lago, and I admit to liking the development for certain buyers. In fact, I think the two lakeside units there, listed at $499k and $599k represent some of the best value on Geneva Lake. They also possess striking views, views that I dare label as stunning. The economical unit at Vista Del Lago will explain, in one snapshot, why these units are struggling mightily to attract buyers. The two bedroom unit listed at $270k is nice enough. It has a slip, a fireplace, a pleasant disposition. It also has a tax bill of $8,251 and a monthly assessment of $602. That’s an annual carry, before paying a mortgage or a utility bill, in excess of $15,000.

The sort of buyer seeking a $270k condo at Lake Geneva isn’t the sort of buyer that is planning on $15k for dues and taxes. That’s the issue, and it doesn’t just affect the small two bedroom unit. The very cool unit (floor plan is cool, views are cool, current finishes are rather painful) listed at $599k has a $15k tax bill and annual dues exceeding $10k. For a condo. That doesn’t mean this unit doesn’t represent value, because I think it does, it just means that if we have 100 buyers I’d bet 96 of them would pass on the unit, and perhaps on Vista Del Lago in general, as a result of that mighty dues structure and tax exposure. Vista offers many amenities not commonly found in a lakefront condominium, but buyers are going to really, really want that indoor pool experience if they’re going to pay such a handsome ransom for it.

The two Bay Colony sales this year are welcome transactions, as they give some pricing direction to two condominiums that haven’t had much activity over the last several years. My two bedroom in the north building sold for $445k, the three bedroom in the south building traded for $525k. Both prices will look low to other owners in the building, but both prices looked about right to me. Now the other sellers in those buildings will have the unenviable task of matching new comp prices, which never works out well. As a strategic selling note, it’s always better to set the market, even if the price seems low at the time, rather than be forced to compete with a low printed comp. Case in point is a sale at Eastbank that I’ve been working on. I sold a unit there during the summer of 2012 for $750k. I now have an identical unit in an identical location listed for $775k. The owner who took what they perceived to be a low-ball offer has since moved on, while my seller remains in the market and we remain in search of the next buyer.

With those negative things aside, the condo market is having a tremendous year. There is value out there right now, and offerings at Eastbank, Bay Colony, Fontana Shores, Fontana Club, and Geneva Towers. The attempt by a local developer to turn Geneva Towers into a million dollar sort of building hasn’t worked, and I’m betting even if it does work it won’t work well, or soon. Expect continued activity in the lakefront condo market this winter, as buyers realize that there are deals to be had over these next cold months.