In what appears tantamount to cruel and unusual punishment, the entire lake is yet to be devoid of ice. The video I posted last week declaring the lake ice free may have been a bit premature, as my own Dewey-Defeats-Truman moment ignored the fact that the very western edge of Fontana is still sheathed in a very slippery, very ugly layer of ice. Geneva Bay conceded its ice last weekend, and the rest of the lake is wide open, but Fontana remains a stronghold of winter that receives reinforcements each night when the temperature dips, or dives, below 32 degrees. Consider this your invitation to join me this Saturday morning at that icy edge. Bring a sledge hammer and/or a blowtorch. And don’t forget winter hate. Bring that too.
The open water provides soothing balm for my frayed nerves, and this morning, with the lake lying still as glass, there is a touch of spring in the 24 degree air. I can feel summer coming, and apparently so can the lakefront market on Geneva. Lakefront activity is on the rise once again, both in terms of a couple new listings, and a couple new buyers. From my vantage point, I see at least two lakefront properties pending sale at the moment, not including the bank owned debacle on the south shore that we’ve discussed at nauseating length, and not including the two pending properties on Wrigley in Lake Geneva since I don’t consider those to be true lakefronts. There are buyers and there are sellers, and there is dark blue open water, and with that, the trifecta of a Lake Geneva spring market is complete.
Sort of complete, anyway. The activity, both now, and moving forward, makes practical sense to me. I see properties on the market today that were on the market last year, and this should, by default, signal a slow market. Stagnating inventory is a killer of every high end market, but there’s a little secret about our Lake Geneva inventory that might be missed by the casual, disengaged onlooker. For all the permanently smiling faces of some agents in this market, touting a market segment immune to difficulty and thereby somehow making it different, there are market forces at work in the minds of long time sellers and those forces are winning. Prices are dropping. There are several lakefront properties on the market right now (maybe three) that I see that leave me perplexed. These properties should not still be for sale. They are too rare, too magnificent, and too valuable to be priced so low. While sellers rarely put their hands out and beg, I believe I see some panhandler owners right now and their hands are indeed outstretched. I just saw one, leaning against the cut granite pillar of their driveway entrance holding a sign that appeared to be fashioned out of a Cole Haan shoe box that read, in the finest cursive- possibly from a Mont Blanc calligraphy pen, “I will not work for food, but I will sell you my lovely lakefront house for several million dollars”. They’re classy like that.
All that is to say this. There are values in this market that are on par with some of the values that were had in the 2010 market. There are two or three select properties that I see as having deal potential that trumps anything that sold last year. Yes, I said anything. Seller fatigue is one reason these deals are available now. Consider this: A seller listed a property two years ago for $4MM. This was not reasonable then, but they knew it had been reasonable two short years prior. So they went with the high number, partly because their name-tagged agent said it was a good idea. They listed, albeit high. Then they sat on the market. Then they reduced. Then they questioned their agent. Then they reduced again. Then they went to Florida. Then they reduced. Then they didn’t pay to have the garden mulched. Then, before they know what happened, it’s two years later. Price, $2.99MM (this is hypothetical, so don’t go searching MLS records to figure out what I’m talking about).
The seller now realizes that this whole sale thing hasn’t been as easy as they hoped. Then the seller comes to a decision that every buyer of any property hopes their seller arrives at. The seller paid $1MM for this lakefront home 15 years ago (eat that Mr. Altucher). The seller is now asking $2.9MM- a price that is significantly reduced from previous list prices and previous values. The seller, beset by market fatigue and a nagging touch of ambivalence, cuts his price to $2.3MM and readily accepts the first bid of $2MM that comes along. This seller, for all the previous hype and delay, will walk away from closing with a check bearing his name and the sum of $1,850,000.00 (roughly). The seller still made out, and he moved on. The buyer has just bought a property at a tremendous price, and is setting herself up for her own walkaway check some day far into the future.
The market is moving again because sellers, like the one I described above, are getting tired. This is not the case with most sellers, as most have enough pride in their reserve tank that they will not succumb to market conditions no matter the cost. These are not the sellers I’m talking about. I’m talking about the lakefront owners that have money and no longer, through health or age or circumstance, desire to spend their weekends on the shore. These are the sellers that we need to look for. The sellers that we need to hunt. These are the sellers that we need to strike a deal with and help them move on by helping ourselves. These are the deals, and they are available today. There is opportunity in this market, but the pure gold is surrounded by fools gold that looks curiously similar. Best let me help show you the difference.