Geneva Lakefront Condominium Update

Some time ago, a seller of an unusually large and exquisitely appointed lakefront condominium asked me what I felt that particular unit was actually worth. I told him. He was silent for a while, and then asked me, in certain terms, how so much could be worth so little. Had I not noticed the refrigerator, he wondered. Or the wood floors with those marble accents? Did I not appreciate the finest of plaster on the thickest of walls? I replied that I noticed those things, and appreciated them, but that the market is indeed the market, and so much can, unfortunately, be worth so little. Never mind that in this context “so little” was actually a ridiculously high sum of money, to that seller on that day, I had effectively just called his only daughter a dog.

I didn’t get that listing that day, and in the same way, I can talk myself out of lots of listings. Value is subjective, yes, but a range for value generally is not. If a property is worth somewhere between $450k and $600k, that would be a reasonable expectation. In that range, there is much interpretation that is subjective, and while I cannot argue the rough range of value, I can certainly argue towards one end of that spectrum. In the case of 2011, if you’re a lakefront condominium, it’s imperative to take that range of suggested value and steer directly and swiftly to the low end. The lakefront condominium on Geneva is not doing well.

There are 18 Geneva lakefront condominiums available this morning if you search the MLS properly, and another two units available if you search improperly. It seems that this whole “Geneva Lake” or “Lake Geneva” thing isn’t quite catching on among some agents who wish to guide you through one of the largest purchases of your life. These condominiums range in price from the $300ks to over $3MM, though it’s safe to say that the vast majority of our lakefront condo inventory can be had in the $450k to $950k price range. There are several units priced to sell, including one unit at Fontana Shores listed in the low $400ks that appears primed to be stolen, if you’re the thieving type.

There is a one bedroom lakefront unit at Bay Shore in Williams Bay pending sale, and I shall reserve judgement on that sale until after it closes and I can see the number. I have a feeling it may be a short sale, but that’s just speculation. There have been just two other lakefront condo sales during all of 2011, those occurring at Fontana Shores ($440k) and Geneva Towers ($329k). You probably know I’m not a huge fan of Geneva Towers by now, but I am a huge fan of cheap lakefront condominiums, and at $329k, I could be made to like Geneva Towers.

The trouble as I see it, is that several lakefront condos that have undergone relatively significant price reductions are still not capturing the attention of the market. I dropped my listing at Fontana Shores roughly 15% and no one really noticed. Same goes for my listing at Bay Colony, a fine lakefront unit with a large boatslip and indoor pool that was originally listed at $649k and is now $539k. These reductions in previous years would have generated activity. Today they generate yawns.

I’m not convinced that the lakefront condo market is dead, but it surely is hibernating. While the rest of the market had a nice run over the summer months, the lakefront condominium languished. There are buyers, but even those who appear motivated are not buying, even when presented with opportunities that scream value. While some condominiums have conceded value and reduced their price, I do not see this as a larger trend. Sure, units will reduce from $519k to $499k, but this hardly represents any sort of motivation on behalf of a seller that will in turn motivate a lethargic buyer. If the broader condo market cut some more fat off the list prices, that might help, but as evidenced with my two examples above, even price cuts are not having the desired effect.

We’ll continue to watch this lakefront market, wearily. If you know anyone looking for a lakefront condo, now might be a great time to consider throwing some numbers around to see what might stick. The lakefront at Fontana Shores is probably going to sell cheap, as might a few others currently on the market. The lakefront condominium will find some footing once again, but unfortunately it likely won’t be in 2011.