To buy a house in Lake Geneva in 2009 was to catch a falling knife. The knife wasn’t super sharp, but it was a knife. It was more like a butter knife, with only those tiny little teeth. Like the teeth of a largemouth bass, not really the teeth of a northern pike. The knife wasn’t very big, and it wasn’t very heavy, but I’m telling you it was still a knife. The knife hurt, a bit, and your hands would have been totally scraped. You’d have some kind of abrasion, maybe like you took one wipe down it with some sandpaper, the fine kind. You would have smarted for only a few moments, and it would have been less a smart and more a mild annoyance, but you’d still have caught a falling knife.
From 2009 into 2011, the market sunk lower still. That’s why the knife part up there. Prices softened another 5-10% from 2009 to the end of 2011 and into 2012. From those low days to now prices are likely up 10-15%, give or take. So a buyer who bought it in 2009 is generally experiencing some form of positive equity, less if they did nothing to the home, more if they did something, and it was the right something. The market now features a few homes that sold in those recent years, and the question that needs to be asked is this: How much will the market be willing to reward those buyers turned sellers?
You know what I think the answer should be, because I just told you. It should be 10-15% more today than it was from those low, dark days of 2010 and 2011, assuming no changes were made to the property that might otherwise lift or lower the price. One such lakefront property that sold during the doldrums has returned to market, and is pending sale. The property sold for $2.6MM and change back in 2011, and it’s now under contract with an asking price of $3.975MM. I’m not really too concerned about what the market thinks the premium should be for this sort of home sale, because I already know. What I am curious to learn is what a particular buyer thinks the market has done since then. I’ll reserve judgement on the sale until such a time that it prints, but it’s safe to say there’s a premium sought and a premium accepted.
The lakefront market is currently a bit of a conundrum. I see some listings that I think should already be sold, and I see others that are pending that I didn’t think would be. There’s a Fontana lakefront pending in the $2s. Also, sharing a pier is like sharing a toothbrush with a stranger you met under a graffiti tagged bridge. There’s the $4MM resale that’s freshly pending, and I have one private lakefront deal that’s under contract to a buyer of mine. That’s a simple thing to note, by the way. If you’re a lakefront buyer and you think you’re paying close attention to the market by signing up for some agent’s automated listing feed, you’re really missing out. The real action happens right here, in this office and on this keyboard, and I’m constantly looking for sellers and buyers to connect in direct deals. If you want that sort of treatment, I think you should probably email me. You can call, too, I suppose (262-745-1993).
I’m bringing a couple of new lakefronts to market next week, as I’m doing as much as I can to fill the inventory void that we’re experiencing on the lakefront. In the very early stages of 2015, I thought this might be a year that we press the valuations forward a bit, and print higher sales prices than we printed, at least on average, in 2014. So far I don’t see that happening, excepting the $4MM place. Instead, I see a bit of a mixed bag, with certain properties still wildly overpriced, and others strangely well priced and still curiously not fending off buyers. I expect things will sort out over the coming 8 weeks as we head into summer. This market has a way of turning quickly, and just as you’re about to write it off for a few months it comes roaring back. I think that’ll happen, which may mean that I just said disparaging things about it with the hope that it rebounds as a result. Like a coach telling a player he’s no good just to motivate him. Anyway, I’m around all weekend and am ready to hunt down some value. Except on Saturday afternoon, that’s my daughter’s birthday party and if you’re looking for a Realtor to skip his daughter’s 9th birthday party you’re best to go back to the gal who sends you those automated listing updates.