Geneva National. It just sounds fancy, doesn’t it? But then again, everything with National in it sounds lofty. Geneva Lakefront Realty is okay, I guess. But Geneva National Realty? Must be some sort of serious business. First Bank of Lake Geneva sounds like I might bank there. But First National Bank of Lake Geneva is pretty much the best sounding bank ever. But Geneva National isn’t just a fancy name. Nor is it just 54 holes of pretty impressive golf. And it isn’t just a development that used to be hot in the early 1990s and then again in the early 2000s, it’s a development that is finding its groove yet again.
I have written about Geneva National more in the last two months than the previous eight, and there’s good reason for that. I won’t write about a particularly dead segment of the market, unless just to let you know that it is indeed still dead. But when something is hot, and moving, and liquid, it is worthy of inclusion here as often as is necessary. Unless of course it’s Lauderdale Lake, one of them or the cumulative whole, then no matter how hot it got it still wouldn’t get a mention here. Such is life as a market outside of the Lake Geneva vacation home market, and to live such a life would be difficult- knowing no matter what you did it wouldn’t be enough to make me write about you. Sorry, Lauderdale.
Anyway, so Geneva National is hot. It’s not hot in terms of price appreciation, it’s just hot in terms of volume. Sellers that couldn’t attract buyers with even rock bottom pricing are now finding success. Those low asking prices are garnering offers, and even though those offers are low relative even to the low asking prices, any volume here is good volume. Remember that. If an individual segment is to recover there must be a substantial transfer of properties out of disinterested or weaker hands and into strong, motivated, new ones. This is how markets heal, not through stubborn resistance to market conditions, but through acquiescence to buyer’s pricing expectations. Volume fixes many ills, even if that volume is at a low price point.
There are currently at least six properties pending sale in GN. The most expensive of which is listed under $400k, proving that the entire market is not well- yet. But the inventory has shrunk, to below 95 available units, and this moderate inventory is a positive for the development. At the height of despair here, there were 130 or more units (homes and condominiums) listed on the MLS. This was bad. The lower number is still elevated, but represents less than 10% of built inventory, so not all is lost. The recovery process is underway, and if buyers continue to take notice of low pricing and aggressive sellers, then 2012 should end up as the highest volume year here since 2008.
While interest rates do not do much to affect the lakefront market on Geneva Lake, they do play a major role in a development like Geneva National. Cheap money doesn’t matter much when money isn’t an object, but for the people buying a $200k condo at Geneva National, the ability to finance a portion of that purchase at a ridiculously low rate is a motivating factor. These rates cannot stay low forever, but for now, for 2012, they appear to be readily available. To bust a popular myth- financing is indeed available. Sure it’s not as easy to obtain as it once was, but for qualified buyers with a substantial down payment, terms are available.
For the foreseeable future I expect Geneva National to continue this upward trajectory. Remember, prices will stay soft and even soften some more as we move through this year. But the long term outlook for GN remains strong, especially if volume can increase and help to weed out the uninterested and incapable segment of the ownership. The best thing about a volume recovery is that these prices will stay low. How low? I just sold a condo in GN to a buyer for $165k- down from the seller’s original 2010 list price of $289k and a possible peak valuation in the $320k range back in 2006. Half off sale at Geneva National? Half off sale at Geneva National.