Geneva Lakefront Market Update

Sam Zell, facilitator of many great real estate deals and at least one very, very bad newspaper deal, recently spoke of the real estate market. He told the interviewer that the current market is one for savvy investors, not one suited for novices. It’s a market on the mend, and the mend is what makes the climate that much more difficult to find value. This is a market made for the intelligent, but one that is being overrun by the eager. This is a market that isn’t as easy to navigate as the world seems to think.

There are deals at Lake Geneva pending sale today, and there is one deal that closed yesterday. Yesterday’s news is of the boathouse in Lake Geneva Manor that was listed for $3.495MM and sold for $3.345MM after barely a week on the market. The good news for the market is that the sale was cash, and the price per foot metric was high, at nearly $32,000 per front foot. With that, I suppose there is no bad news, unless you’re a careful buyer intent on learning the market before plunging into these watery depths. If you’re the sort that likes to saver the newspaper with a cup of bold coffee, this is not your market. This is the Twitter market, with the hunt, the negotiation, and the closing all taking place in no more than 140 characters.

There are other deals pending too, plenty of them. A basic house on the hill in Cedar Point is under contract with a $1.4MM list. There’s a property in Glenwood Springs pending around $2.2MM, and another one pending in the Birches for $2.15MM. I spoke of that sale before, so I won’t speak of it again. The nearly $3MM home on just 80ish feet of frontage in Fontana is pending with an ask of $2.995MM. There is a deal pending on a lakefront in Geneva Bay Estates, the same home that I had a contract on earlier this summer for a buyer that chose to back out at a very late stage. These are just the pending properties that I’m aware of, and there very well may be others.

There are more buyers in the market today than I believe were active at any time even at the peak. This activity is fantastic, but I can say without any equivocation that many of these deals do not make a whole ton of sense. I find it difficult to separate the deal from the lifestyle purchase, at least at certain times. If a property is everything that a buyer wished a vacation home could be, and that property seems to me to be overpriced of poorly located, perhaps that isn’t any of my business. Just like the buyer building a new home on the substandard parcel immediately adjacent the Linn Pier boat launch. If that isn’t something I’d ever recommend from a value play, that doesn’t make it a bad play for everyone.

When I see buyers who have little knowledge of the market buy the only lakefront home they tour, I cannot help but cringe. Sam Zell cringes with me, as this market that feels warm and fuzzy is still fraught with poorly priced inventory. I have many buyers in the lakefront market today, most of whom are waiting patiently for the right property to present at the right valuation. These are the buyers that study a market and wait for as long as they need wait. These are the buyers that appreciate a thoughtful pursuit, a patient approach, and intelligent guidance. These are the buyers that are currently being beat to the punch by the cheerleaders who see one thing and jump, for fear of missing a rapidly rising tide. Or so they’re told.

I’ve said it a hundred times, but it remains more true today than it has at any time since 2006: If a property presents and that property is a match on so many of your buying criteria, it’s best to pursue that property with some haste, as someone else is likely en route to the same door. There are deals in this market, and those deals continue to be overlooked by the frothed up masses.