Activity is on the rise for lakefront real estate on Geneva Lake. There are numerous buyers active in the market right now, even as you sit on the sidelines, content to feverishly click your online accounts to make sure all that “fun” money you have isn’t going anywhere. News in the Wall Street Journal last week of a rise in sales activity in the Hamptons, with much of the credit due to the resurgence of the investment bankers, the same bankers who were largely absent from the market over the previous 24 months. The market is on the rise, and I’ll take that as a harbinger of things to come for our own vacation market here. We are called the Hamptons of the Midwest, even though we replace Hamptons elitism with some good old fashioned Midwestern awe shucks.
The foreclosure that I tried to kick you into last week has gone under contract, which is exactly what I told you would happen in a very short period of time. A lakefront on the North Shore of Geneva with an asking price near $3MM has gone under contract in the past week. Coincidentally, I had a buyer who wanted to see that home earlier this week, only to find it had just been sold. Many times, waiting does not have its advantages. Unless you call getting aced out of a beautiful property an advantage… The lakefront on Fontana’s north shore priced in the mid $3MM’s is going to close next week, and the lucky person who is buying that home has sold his own lakefront on Cedar Point for around $2.5MM. Much of the movement is lateral in this market, with owners either trading up or down, but remaining on the lakefront. Most trade up, and that’s because we’re Americans and trading down only entices those who vote for Barney Frank, those living in the White House and members of the EU.
The biggest development over the past year has been the lowering of the entry level price for lakefront homes on Geneva. What had hovered around $1.5MM for as many as seven years, obviously with a few exceptions, it has now come down to around $1.2MM. The lakefront foreclosure was listed at $1.2MM, and there’s a lakefront in Williams Bay priced in the mid $1.3MM’s. Entry level has been redefined, while the meat of the market, the homes in the $2MM to $3.5MM range, have remained fairly stable. The market is curiously top heavy, with 8 lakefront homes priced in excess of $5MM. As I’ve written before, the $5MM mark is a tough obstacle for all but the most impressive of estates, and it was an obstacle even when the market was humming and there was no bottom, or fear of a bottom, in sight.
There are several properties that represent tremendous values in any market, primarily properties with outstanding lots hosting humble homes. I don’t like using per front foot pricing like many do, as in, lakefront on Geneva sells for $30,000 per front foot. It’s not an accurate way of judging value since a wildly over improved home with 50′ of frontage might sell for $2MM, and a 110′ lakefront lot with a crappy house might sell for the same. That per front foot isn’t reliable, so please hold me accountable to that statement in the event that I ever try to use it on this blog from here on out. Anyway, there are deals to be had for those people that don’t mind doing work to a home, or even building new. If you’re looking for turn key, you’ll also find deals, but not to the extent that you might find if you were looking sheerly for location and land size.
All in all, it’s going to be a solid fall market at the lake. I expect to see at least two more contracts written before the end of the year, but we may see as many as four. There are quite a few properties circling them like the vultures that soar overhead when I’m on my evening walks, watching me. Waiting for me to stumble. I’ll never give in to them, never allow them to tear into my deliciousness with their gross hooked beaks, but for the housing vultures out there, your prospects are looking up.