There is a nice lakefront trend presenting itself this summer, if only we’ll take notice. The lakefront market is moving fluidly, and there have been rational sales this year carried out by rational buyers with the aid of realistic sellers. There have been 9 lakefront sales on Geneva during 2011, a number that isn’t robust even if it is a fair sign of stability. Of those 9 true sales, all of them have made sense to me for one reason or another. The two sales on Wrigley, which I hesitate to include in the “true” lakefront sale category, occurred because of a lack of other entry level inventory on the lakefront. Had there been inventory to choose from, there’s a good chance that those two properties now sold would have still been resting idle, waiting for a buyer to pick through the other inventory before falling in their collective, figurative, laps.
Other sales have made sense out of sheer value. The lakefront estate on the North shore with 200′ of frontage that sold for $3.5MM, this was obvious value. The lakefront on Bonnie Brae, again, value even if less captivating than the $3.5MM sale. The entry level lakefront in Beuna Vista that sold for full price last month, this sale made sense because of the price point and the market need that it fulfilled. The market, after years of acting irrational is now as predictable as it is potent. There are no sales on the books that cause confusion, either because they are so remarkably low or because the buyer was so ridiculously naive, there is only reason, even if a few of the sales should have probably sold for a whisper less.
The 9 sales this year are nice, but the five pending sales are even better. That’s right, it’s the middle of July and the lakefront market has at least five lakefront properties pending sale this morning. Those asking prices range from $1.595MM to $2.995MM, and every pending sale in that gang of five has the opportunity to sell at a price that I feel represents considerable value. The entry level lakefront at $1.595MM will tell many tales when it closes, but most of all it will show us where the entry level market is heading, and how strong it is. A sale at $1.35MM or less is a strong indicator to buyers that the entry level market remains soft, while a sale at $1.45MM or better might be a harbinger for more strict seller negotiating to come. If the entry level window that was left open last fall after several sales in the $1MM to $1.35MM range remains open, buyer’s should rejoice. If it has closed, at least by some, then buyer’s are undoubtedly in a worse negotiating position during the latter half of 2011 than they were during the latter half of 2010.
One of the five properties under contract right now is that marvelous lakefront on the southern tip of Cedar Point that I’ve been telling you about. Listed at $2.499MM, if this thing sells for $2.1MM or less it’ll be one of my very favorite deals of the year. Including that listing, there are two others pending on Circle Parkway in Williams Bay, one to my buyer at $1.795MM and another to a buyer who doesn’t mind the hike of a hilltop location at $1.995MM. The other pending sale at $2.995MM on South Lakeshore in Fontana is a quality buy, but my enthusiasm for this sale will turn far more visible if it sells at $2.5MM or less.
There are other offers circulating now, and hopefully the buyers will find increased motivation and the seller’s will find the same. Of all the sales this year it is obvious that the seller’s who are selling are those who have been willing to negotiate to the buyer’s level, even if some buyers refuse to come to a reasonable level negotiated to by a reasonable seller. I’d expect these five properties to close by the middle of September, and if they do, we’ll have 14 lakefront sales with more than a full quarter of the year remaining. There are 30 true lakefront properties available this morning, and the odds are quite good that another five of those will close by year’s end. 2010 was a great year for the lakefront market on Geneva, but even that year saw only 11 lakefront sales by September 15th, though the year ended with a flurry and recorded 18 true lakefront sales by December 31st. If we can close the five pending sales, and add another five- a figure that I feel is attainable and realistic- then we’ll end 2011 with volume that mirrors 2010. In a world of high end real estate, maintaining sales volume is as important as improving upon it, and Geneva is well on its way to doing just that.