The lakefront home market has oficially begun it’s summer sleep. The dog days of summer have a different meaning when it comes to lakefront real estate on Geneva, and this summer is no exception. The market has slowed since the middle of June, with only two new contracts accepted (by my count) since early June. One of those contracts was written on a home that hadn’t even yet hit the market, which is further proof that our market moves when properties are unique and priced well, regardless of the national economic situation. We currently have 34 true lakefront homes for sale on Geneva, not including the South Shore Club or other condominium style ownership situations. I think of the 34 homes there are are as many as 15 that are grossly overpriced, which doesn’t necessarily mean that those homes won’t sell. It just means that they’re overpriced, and that’s perhaps why they haven’t sold as of yet.
There are particular values in the entry level market priced up to $2.3MM, with several homes in that price range reflecting as much as 20% price reductions. There are deals to be had, if only buyers would be a little more active in this price range. What’s particularly remarkable about the lakefront market is the penchant for buyers to overpay for new or over improved construction. If I have a small, dumpy house on a beautiful lot for $2MM, no one will want to buy it. If I bought that lot for $1.8MM, put a new beautiful home on it at a cost of $850k, and relisted the property for $3.4MM, it’d be a winner in the market. Buyers love buying after someone else has done the work, which is wonderful except that buyers end up paying a substantial premium when they reward the previous owner for their improvement efforts.
I see the market remaining slow until mid-September, which is when our Fall market historically heats up. September is the single greatest month to spend at the lake, and once kids go back to school, it’s much easier for parents to come up and spend a day touring homes. If they’d tour with me, they could tour the lake via boat and really get a great feel for the lakefront. There’s also the very curious thought that buyers entertain during the Spring and Summer. They think that it’s best to wait until Fall to purchase a summer home, so they sit out the Spring and Summer markets. What happens in the Fall? All these buyers enter the market at the same time, which completely destroys the idea that there are fewer buyers active in the Fall. If anything, there are more buyers active in the Fall, making that season perhaps our strongest selling season. So much for waiting, eh?
If you’re a buyer in the market, there are deals to be had, particularly entry level deals priced up to $2.3MM. Several of those deals are currently priced in the $1.5MM to $2MM range, and many of those boast significant amounts of lake frontage. It’s a great time to be active in the market, and an even better time to negotiate a deal. Remember, contrary to popular thinking, the middle of Summer is historically a much better time to negotiate a deal than the middle of Fall. Something about all those beautiful colors surrounding crystal clear water that makes people a little buy happy, makes sellers a little more confident, and usurps some of your negotiating potential.