Geneva Lakefront Condo Update

Geneva Lakefront Condo Update

Vista Del Lago

If I didn’t know better, I would aggressively call the lakefront condo market on Geneva dead. This individual vacation home market at Lake Geneva hasn’t had a pulse for nearly two years, and even though I’m not a doctor, I’m pretty sure one heart beat every two years isn’t normal. The market hasn’t adjusted to find new ways to survive in this market downturn, and prices haven’t fallen enough to attract buyers in any significant numbers. The lakefront market is the benchmark for our broad vacation home market, and actions in that market should reverberate over the rest of the market. Price reductions of lakefront homes should lead to price reductions of lakefront condominiums, which should in turn lead to reductions in lake access homes and condominiums. This simple concept has been working, if slowly, in the broader market, but the lakefront condo market isn’t having any of it.

There are 14 Geneva lakefront units currently available (per MLS) as of this morning. Of those 14, most have been for sale for quite some time. While many have received price reductions in hopes of attracting buyers, those price reductions have not been severe enough to make any impact in the minds of lakefront condo buyers. Those buyers are few and far between, particularly when compared with the lakefront condo peak during the early and mid 2000’s. The lakefront condo has lost some favor, and while I’ve personally sold two of the four lakefront condominiums to have sold on Geneva in the past year, I used to sell these things with both enthusiasm and regularity.

I don’t know why the lakefront condo doesn’t attract more interest these days. Perhaps it’s the condominium dues, which tend to escalate faster than taxes under a progressive regime as condominium boards lack understanding that the condo fees severely impact buyer interest. If a three bedroom unit at Vista Del Lago has a condo fee of $1027 (I’m not making that up), it’s a unique buyer that thinks an annual outlay of $12,324 for association fees is reasonable. And then there’s the idea that the mere concept of condominium ownership as we once knew it is dead. Condominiums were originally set up as associations wherein an owner would pay a fixed monthly fee to the association under the pretense that the association would be maintaining all exterior elements of the condominium. The owner paid $250 a month, and the lawn was mowed, his windows were washed, his driveway was plowed, and when the roof needed to be replaced, there was money to cover that expense as well. Sounds dreamy.

Fast forward to 2010 and the scenario has changed. Now the owner still pays monthly fees with the purpose of covering these items, but when the roof actually needs to be repaired the association levies a special assessment against the owner to cover that repair. The owner, thinking they were paying monthly for such a future repair, ends up forking over several thousand dollars to pay for this maintenance item. The concept, in this regard, is broken. Now, that’s not the way every condo association is run. It’s just the way that the vast majority of them are run. So for buyers, is this a reason to shy away from the condominium concept all together? Not really.

If I were a budget conscious buyer and I had interest in a specific association, I’d be sure to research (or ask me) the condominium maintenance history. Find out when the last time the roofs were replaced. Look to see if the driveways are cracking and will ultimately need a repair that is currently not being discussed. Do some homework. Several of our buildings on the lakefront are older buildings, but they have undergone extensive renovation and repair over recent years. Vista Del Lago has spent the GDP of several Baltic nations over the past decade, and while the association fees remain too high, the property is generally is good repair. The same thing does for Fontana Shores. Again, an older building, but one that has a newer roof, boiler and windows. It’s an old building that has been kept in excellent shape. Bay Colony in Williams Bay has also stayed on top of their maintenance issues without making the monthly fees oppressive.

The monthly fee increases might not be why lakefront condominiums on Geneva have failed to gain any traction in our market, but they’re probably one of the reasons. I think the concept still works, and I think the lakefront condo still fits a buyer that exists. If you want to pay $500k and have a boatslip, and a view, and possible a tennis court and/or pool, the only option for you at Lake Geneva would indeed be a lakefront condominium. Sure, most of the buildings are relatively ugly and lack the architectural romance of newer buildings in other markets, but there are still plenty of reasons to consider a lakefront condominium. The inventory is quite diverse at the moment, with offerings available at Stone Manor ($2.495MM), Vista Del Lago, Bay Colony ($599k), Fontana Club, Fontana Shores, Geneva Towers (not really lakefront, but I’m feeling benevolent this morning), Somerset and Harbor Watch. There are some nice options out there, and if we can get some blood flowing to make these prices drop to reflect the drop in entry level lakefront prices, we’ll be on our way to slapping some new life into the comatose lakefront condo market. And once we do, we’re going to ring that bell like we’ve always wanted to.

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