Geneva Lakefront Market Update

Geneva Lakefront Market Update

The lakefront market on Geneva has been one of starts and stops this year. There have been eleven year to date sales, with sales occurring in what can’t really be called “bunches”, but perhaps they’ve been occurring in small, fieldstone sized clumps. Of the eleven lakefront sales, two closed in January, which means that the properties closed in January, but the heavy lifting on the sales end was probably accomplished in December. The next spate of sales largely occurred during a seven week period from mid-April through the first week of June. Five lakefront homes closed during that period, which makes a bunch of sense as buyers pushed to be in prior to the commencement of summer. The summer months, as is typical, were anything but robust. There was a single sale in July, and another sale in August. Last week, there was another sale. All this further proves my point that the only two months without lakefront sales on Geneva this year, February and March, are indeed the two worst months on our calendar.

The lakefront that closed last week was an interesting one. Located in Geneva Manor, it was a bit suburban on the exterior, but the interior was quite fancy, and more than tolerable. The lakefront wasn’t ideal, with a couple of neighboring piers working to increase pier density in an area that is already quite clogged. And being in the city of Lake Geneva, the property came with an indigestion inducing tax bill of roughly $28k. Originally listed in 2008 for $2.445MM, this renovated lakefront home sold for $1.475MM last week. In that price, it appears to be a deal. When combined with a tax bill that is probably 30% higher than it would have been had the home not been located in the city of Lake Geneva, the deal isn’t quite as sweet as the dramatically discounted price makes it appear. Even so, the house is quite nice- in fact, nicer than anything else in the entry level lakefront range on Geneva, and so the deal is one that I like. Even if I don’t like that tax bill.

The rest of the lakefront inventory appears to be softening quite nicely, and should be primed for a nice selling run later this fall. While the Congress Club isn’t exactly lakefront, it smells and feels like lakefront, and since one home in there was just reduced to $1.1MM, I like the Congress Club quite a bit at that price level. That’s one to call me on if you’re in the market for an entry level lakefront home, and you have the ability to pay cash (leasehold interest, so no financing is allowed). The entry level lakefront market continues to soften as I figured it would, and that lakefront entry point is getting ever closer to the $1.1MM-$1.2MM mark that I predicted over a year ago we would ultimately get to. There are some nice entry level lakefront deals out there, but there are also some nice properties in the low $2MM’s that look primed to sell in the mid to high $1MM’s later this fall. I count 40 true lakefront homes available on the MLS as of this morning, and there are at least five of those homes that look like screaming good deals to me.

Price reductions are quite prevalent now, as sellers make moves to attract buyer interest before the season is up. I just reduced my lakefront listing on Upper Loch Vista from $2.5MM to $1.9MM, and that lakefront is a rare bird in that price range. Normally those mid $1MM’s homes will be old, small, and generally sort of bad. This home is large, newer (1989 or so) and has 80+ feet of frontage with some of the best wide-water views available on the entire lake. Homes like this will be sold this fall, and I’m going to make a prediction that I’ll be sure to revisit at the end of the year. We’ll probably sell three more lakefront homes by the end of 2010, which would bring the lakefront market to a year end total of 14 sales. If we can get to 14 sales, we’ll best the 2009 totals by nearly 30%, which will further prove by theory that Chicagoans love Lake Geneva real estate almost as much as Germans love David Hasselhoff.

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