I think it’s great when someone comes up to tour some vacation homes on a Friday and buys one on a Sunday. But I admit to you that in 20 years of selling real estate that’s only happened like once. And maybe that one time I’m remembering is something I’m imagining, like a dream I dreamt so many times that I now believe it to be true. The sorts of buyers that I work with tend to be far more methodical. They tend to be discerning. They tend to be slow moving, sometimes to the point where their deliberations become the reason they miss out on opportunities. Often, being thoughtful can cause buyers to overlook incredible value because they’ve convinced themselves that to be eternally patient is somehow better than being opportunistic.
Last week, I closed on the sale of an old house on Linden in Glenwood Springs. This house is in pretty rough shape, which might be giving it too much credit. It’s a tough old house, but it’s on a double lot with a lake view and a private pier so what difference does it make if a marble dropped in the living room somehow ends up making a visit to each main floor room before it settles? Like most sales, this one tells a story, and it’s not a story of finding a buyer by placing an ad in the New York Times, or by pulling a full page ad in Mansion for $18,000. This is a story like most Lake Geneva stories.
In February of 2009, this old house came to market for $949,000. For those who weren’t paying attention to the market then, the winter of 2009 was an interesting time. The stock market melted in the fall of 2008, but it wouldn’t stop melting until spring of 2009, and the housing market from late 2008 through late 2009 wasn’t quiet sure what was happening. There were well known local Realtors here telling us, and I quote, “Lake Geneva is Different”. The supposition was that we wouldn’t crash like other markets because we’re better than other markets. We’re stronger, less dependent on leverage, more stable. I admit to finding myself in that camp on some days during that confusing winter. In February of 2009, the seller in Glenwood Springs was buying that narrative, and so $949k it was.
The market worsened from late 2008 all the way through 2011, and so this house sat. The price was reduced and reduced some more, and then in the fall of 2011 the home sold for $499k. A far cry from the $949k initial list in 2009. Fall of 2011 was likely our market bottom here, but it wasn’t a uniform bottom. Entry level lakefront wouldn’t bottom until mid 2012, and it wouldn’t be a stretch to say that entry level lakefront still hasn’t recovered from that bottom. The higher reaches of our lakefront market have fared very well since that 2011 bottom, but how has Glenwood Springs done?
The Linden house was sold, but the new owner was mostly buying it because it was there, and at $499k it was cheap. In November 0f 2014, with the markets vastly improved, the old house on Linden came to market for $675k. The owner would make a nice return for the risk they took at the bottom of the market. They would make money, and they would celebrate over drinks. A toast, to the investor!
But last week I sold that home for $465k. The 2011 risk on owner lost a sizable sum of money. Perhaps $100k when all fees and carrying costs are factored. Now a new buyer, a new opportunity, a $465k price for a double lot with a lakeview and a private pier. Since the 2011 low, two neighboring homes on Linden have sold, both in the $700s, both older homes. I sold one of those homes. The market proved fickle yet again, and the new buyer is the beneficiary of seizing the moment.
But the moment was almost lost, because this buyer had actually looked at the home with serious intent last summer. At that time, the list price was in the mid $500s and we were guessing that a $500k price might get the job done. The buyer decided the timing wasn’t right and we never engaged the seller in a negotiation. Then, in late January, I thought the time might be right, and the buyer bid. The timing wasn’t convenient for the buyer, as a family vacation was already planned and underway, but he found the time and made the bid. When the dust settled, we had paid $465k- a price well below the 2011 market “bottom” price. The buyer won, and I’m pleased to have represented him.
It would have been easy to watch this property over the years and assume something was wrong with it. It would have been easy to take a pass. Every buyer but one did just that. But the new buyer found the motivation at the right time, and his family now gets to spend summer lakeside, swimming from their private pier, enjoying the Glenwood Springs scene, while the other more methodical buyers remain methodical in their city and suburban homes, wondering when the time will be right.