Geneva National is back, and it really is better than ever. Sure, there are still homeowners residing inside these brick and cedar behemoths that were built prior to 2006, those with dated finishes that the owners don’t think are dated. Sure, there are still lots that can be bought for the price of a high mileage used Corolla. But the market has mended, and the volume from 2018 is a sure sign that things are back to stable…Only time will tell, but if I was a betting man, I wouldn’t bet against Geneva National in 2019…
I wrote that a year ago, in my Geneva National Market Review for 2018. There was no reason to think anything different at the time. 2018 was a terrific year, with a couple of top end sales, 81 total built sales, and a general feeling that the market had normalized. In the context of Geneva National, a normalized market is a good thing, albeit a rare thing. The market there tends to sway aggressively with the tides, pushing prices high and inventory low during periods of boom, and pulling prices down and inventory high during periods of bust. The reason, in case you’re new here, is that Geneva National is such a large development (1100+ built units) that it requires a significant amount of volume to keep the market performing at its best. In good times, that volume is present and so prices and inventory normalize. In bad times, when the overall market tends to see diminished volume, Geneva National suffers. It’s that easy.
On the heels of that wonderful 2018, the year just ended found a way to be even better. High stock market valuations, low interest rates, and increased prices in the lake access market all combined to produce 101 sold (built) properties in 2019. That’s a remarkable tally. Heading into 2019, Geneva National had 36 active properties with another 10 under contract. As we sit in 2020, Geneva National has pared inventory even further, with just 22 properties available today, and four more under contract. Geneva National, take a bow.
But it’s not all sunshine and daffodils, as there are some bits inside of that 2019 volume that aren’t perfectly ideal. For all of 2018, GN closed two properties over $1MM. During 2019, there were no sales over $700k. The top end needs to prove liquidity in order for GN to move forward, and 2019 can only be considered a failure at that very top end. In spite of this absence of top end activity, there were nine sales over $600k, which proves there is top end interest, just that it dies out around $700k. Or does it prove that there is top end interest, but the market hasn’t provided the sort of homes that would tempt buyers to that upper range? There are five homes for sale now listed in excess of $700k, and they appear to be worthy of interest, which means the absence of sales at that range is more a function of buyer behavior than it is a result of inventory failure. If GN is going to keep up this bull run, it’s going to need to find some volume this year over $700k.
2020 should be an interesting year for GN. There is no reason, aside from a massive stock market sell-off, that the market shouldn’t continue on its pace. If I’m a GN owner, I’m looking at 2020 and hoping for lower sales volume. I’d like to see more limited inventory and fewer sales, which should, in theory, drive prices higher. I’d be rooting for the vacant lot sales to continue, and I’d look the other way when the lots sell for fractions of their 1990s sale prices. I’d also want to see those sales over $700k. A stable stock market, increased prices and limited inventory in the lake access markets, and limited inventory should propel GN to yet another strong year. In this case, I’d view that strength as an increase in prices, not an increase in volume.
GN Photograph courtesy Ideal Impressions Photography.