I struggle a bit with understanding how the news pundits explain housing. If, for instance, sales are up, then housing is doing well. Yay! If sales are down, housing is doing poorly. New home starts up? Yay! New home starts down? Batten the hatches. It’s a simplistic thing to view real estate through a national lens, so I suppose we shouldn’t fault these know-nothings for their knee-jerk reactions to the positive or the negative, but I still do.
If housing starts are down, as they are right now compared to the prior month, or quarter, or maybe from last year, who cares? Sure that’s not great for home builders, but remember, what’s best for the market isn’t always what’s best for home builders. Diminishing inventory is good for markets, if you’re an owner already, even though it might be bad for buyers. Diminishing inventory, even in a climate of slightly lowered home starts is also a good thing for builders, because if there are fewer homes to consider, well, then, it might make sense for the builders to build a few more of them. News is always good and bad, and until we get reports that sales prices are down, sales volume is down, home starts are down, and interest rates are up, I’m going to proceed with my normal caution while still saying that housing is doing just fine.
Geneva National knows the gyrations of housing trends better than any association up here. While other large associations, like Abbey Springs, operate on a much lower volume expectation than does Geneva National, it’s also proven to be far more immune to the tumult that has roiled GN over recent years. I could have said decades and the statement would have still been true. Geneva National typically has a bit of a difficult set of circumstances to overcome: High existing inventory and continually built and added new inventory, both forced to co-exist inside what is a broad market that thrives on relatively low volume. The combination for GN can be somewhat toxic, which is why slight downturns in the market result in very difficult times for GN. As I once heard about Michigan’s Upper Peninsula, “If the US economy is thriving, the UP is in a recession, but if the US economy is in a recession, the UP is in a depression”. I suppose the same could be set about Geneva National.
It isn’t that I don’t love Geneva National, because I do. But I love Geneva National like I love my children. I love them, and all, but I’m still keen to point out when they do something bad. Geneva National is, unfortunately, lagging far behind our broad vacation home market this year. Last spring, sales were up and the sky looked to be the limit. This year, things are different, and while the 2013 YTD sales tallied 41, the 2014 sales YTD number just 26. Inventory is down only slightly, so the reduction in volume isn’t due to a pure lack of available homes and condominiums. The reduction in volume isn’t due to increased pricing, either, as prices there seem to be stable to falling, even now at this late date in 2014.
Today, there are 48 Geneva National homes and condominiums listed under $300k. Only one of those is shown as pending in the MLS. Consider that the lake access market around Geneva has 21 properties available priced under $300k, and three of those are pending sale per the MLS. The broad market at GN, that inventory from the very bottom to the very top, shows 107 available properties, with just four of those pending sale. Contrasted to the Geneva lake access and lakefront market, where 147 total properties are available and 13 of those are pending sale. GN is lagging, which is rather sad given the vast amount of amenities and beauty that are present inside those gated boundaries.
What does this mean for the buyers out there who might be considering GN? It means that if the Lake Geneva market is expected to see many price reductions and yield many terrific deals, imagine what the situation will be at GN. There will be reductions and there will be deals. As always, I’m a buyer in GN if I avoid the newer enclaves that have potential for too much added inventory. While it might be sexier to consider a new condo on a street that will someday be filled with new condos, I’d rather buy an existing unit inside one of the aged enclaves where I can see a steady stream of sales and clearly understand the historical price undulations. There are deals to be had, but only for the intelligent.