Let’s pretend we’re a small town clothing retailer. We name our shop something clever, perhaps something ironic, and we grow beards and wear skinny ties and do whatever we can to make sure we don’t gain any upper body strength. We have this shop, and we sell this and that, but mostly jeans. Skinny ones. We have these slim jeans priced from $88 to $238, because anyone who buys jeans with some regularity knows that putting an 8 in the price is pure retailing magic. On our first day, we open the shop with our jeans priced between those two benchmarks, each price range getting the same attention. A handful of jeans at the low end, a similarly sized handful in the middle range, and another bunch at the top end. We open our doors and we wait. On day one, six people stop and two people buy the $238 jeans. We are absolutely thrilled.
And so we go about this business, day in and day out, selling skinny jeans, wearing skinny ties, growing thick beards. Six months into this venture, we look at our books. We have sold quite a few jeans. Of those, 70% were priced under $100, wile just 10% of those were priced over $200. As we are nothing if not Selfredge-esque retailers, we adjust our inventory to match the needs of our customers. We buy more jeans to price under $100, and fewer to price over that mark, because we are smart, and bearded. This is the way retail works, and we know it.
Since we are not in the jean business, and since I can never make it past day five of a beard, and since I do not own a single skinny tie, we must apply this to our topic. The lakefront condo market has struggled over the last five years, this is no secret. If your agent thinks otherwise, please consider my candid services. Our condo market is our jean shop, and currently we have three lakefront condominiums pending sale. We have two sales pending at Bay Shore priced at $369k and $387k, respectively. We have another unit pending sale at Fontana Shores, priced at $348k. We have units available in our shop priced from the high $200s to nearly $1.5MM. As we are businessmen and women, we sit back and consider our market. We’d stroke our beards, if we had them, and we’d squirm in our skinny jeans if we wore them.
There are three buyers in the process of buying lakefront vacation condominiums on Geneva. All three of these buyers are in the $350k range. We should be learning from this. While this comparison to a retail store isn’t entirely accurate, as all of these lakefront condominiums are not similar garments of clothing, we can still learn from what the market is telling us. There is activity in the higher price ranges of the lakefront condo market, and there is rock solid inventory available. There is a cheap unit at Bay Colony that I’m offering at $489k. The lowest priced unit in either Bay Colony or Bay Colony South. There is a four bedroom lakefront at Eastbank that I have priced all the way down at $775k, and there are other units in between that are worthy of a look and are indeed garnering some attention. But when the market is active and there are only three pending sales and all three are in the $300s, well, then there’s a lesson here somewhere.
The condo market, it should be mentioned, has actually fared better than some of our other individual market segments. Consider Bay Colony. At the peak, these two bedroom units were selling for $600k with ease. Prices in the building now range from $489k to $699k, which hardly represents a massive price shift. Bay Shore has two pending sales in the mid $300k range, and these units were likely valued in the low $400k range during the market peak. On the opposite side of that same page, consider Eastbank being available now for $775k when the peak value was likely around $1.2MM. The price drops have not been uniform, and some units, like the low priced unit at Bay Colony, offer considerable bargains, relative to other inventory in the building. Whereas the unit at Eastbank (the only offering in the development) offers value both in light of current lakefront competition and in light of a previous value that was at least 35% higher than the current ask.
While those units are nice, it’s obvious to us now that the buyers that possess motivation are clustered in the mid $300k range, leaving other condo owners actively hoping/wishing/begging/praying for a buyer. This market is now absolutely primed to give up a deal or three this fall. While other segments of the market have thoroughly mended, this condo market is still struggling. As a result, there are units that have slipped through the cracks and look to me like they’ll sell for terrific values this fall. If you like the idea of finding value here even as the broader market surges, the lakefront condo might be just the ticket.