Lake Geneva 2021

Everyone is saying that this past year taught them a lot. It taught them about being alone and being still and being strong. I taught them this and it taught them that, and here they are, improved. Weary, battle tested, and better. I’m going to skip that sentiment, maybe because it’s already been beaten to death even though the year is barely four days old. But also because I feel sheepish about pretending the year now ended was difficult for me. Yes, it was difficult because I couldn’t take a fall vacation. It was difficult because I hated wearing masks. Is that a difficulty? No one close to me died of the virus, and no one close to me was financially decimated by the shutdown. Because of this I feel blessed, but I also feel it would be disingenuous of me to pretend that the year was somehow difficult, or that I learned more than I might have otherwise learned.

Over the next few weeks I’m going to do what I always do in January: review the individual market segments that comprise our Lake Geneva vacation home market. I’ll tell you what sold and what that means, I’ll tell you what didn’t sell and what that might mean. I’ll give you the insider’s view of the market and I’ll explain where I see inconsistencies and similarities. But today isn’t about looking back, it’s about looking forward. It’s about this new year and what it might look like. It’s about the trends that shaped last year and whether or not those trends will follow us through this year. It’s about the market and what I expect for the coming year. My credentials that suggest I might know what’s happening in the market? I was extremely fortunate to close $66,808,000 worth of real estate in 2020 (that’s an all-time record for Walworth County, as in, ever), more if you count single-sided transactions and referrals. That total keeps me as the top producing agent in Walworth County for the sixth time in the last seven years, and for the fifth year in a row. I left last year behind with more than $36,000,000 in pending transactions coming in 2021. I had more than $15,000,000 in referral contracts close, and in total wrote or fielded more than $120,000,000 worth of offers in 2020. I feel a bit embarrassed about those totals, but I suppose when one of my competitors ultimately renders me irrelevant they won’t be embarrassed about it. So I’ll enjoy it while it lasts. Onto the new year.

At the start of 2020 I had but one worry for our market. It’s the same worry I carry with me each and every year, my market based cross that I must bear. I worried about having enough inventory to keep the market functioning properly. I vacationed in Maui at the end of January last year, and at that time Coronavirus was something that China had to deal with. That vacation turned out to be the last vacation anyone ever had. The market shrugged off any January concern of the virus and February did mostly the same, but by March the world had shut down and the market followed quickly behind. Contracts froze, showings stopped, the stock market crashed and I figured that 2020 was a lost year. After all, if there’s one thing we know now it’s that buyers buy out of confidence and sellers sell out of fear. I had a few buyers still poking around, and a few contracts here and there, but nothing too exciting. During one April closing, my buyer wondered aloud if buying was a mistake on account of the world melting around us. I heard the comment as rhetorical, but I knew it wasn’t.

What happened next was unexpected, to say the least. While the virus spread and the news turned increasingly, constantly, suffocatingly negative, the market caught fire. Buyers realized that they didn’t want to spend their summer in the city and while many looked to the suburbs, the affluent looked to the lakes. Which lakes? Any lakes. Mud puddles. Big lakes. Channels that connect to mud puddles. It was a modern day gold rush, but instead of seeking precious metal the motivated were just looking for a few ounces of water to splash in. The narrative that began then and continued to today was that the affluent were no longer going to be tied to their city desks. That work can be done anywhere and at any time. Poolside. Lakeside. In the screened porch. And if that’s true, then why shouldn’t rural properties be in high demand? The market had shifted, with the cities playing the role of loser and the winners? Everywhere else.

At least that was the narrative. That is the narrative. But what was forgotten in all of that city exodus was the fact that the stock market was roaring back and 30 year money was priced at or under 3%. Let’s imagine a similar virus-wrecked year, but instead of combining devastating lockdowns with 700% returns on your TSLA holdings, we had a 35% cut off of your SPY that never recovered. What really fueled that exodus to the elite vacation home spots? Was it simply a desire to separate and find some rural peace? Or was it a base-level desire to do that, combined with euphoria over a V shaped recovery in our portfolios? If it were a true lifestyle move, the exodus would have occurred regardless of the stock market and the free long term rates, but I’m not so convinced.

And that leads us to today. We know what happened last year, but I think the key to understanding this coming year is to truly understand why the market moved as it did last year, and hopefully, now we do. What happens next? Interest rates are still free, and in spite of considerable political unrest and a virus that seems content to never leave us alone, the stock market finds itself at all time highs. While I didn’t pose that as an answer to my question, it should be read as one. The stock market fuels vacation home markets more than any virus ever could. The stock market is what makes wealthy people feel wealthy, and low interest rates encourage their indulgence. This is why I believe Lake Geneva will continue to thrive in 2021. I don’t expect the market to cool this year, as much as I wish it would. How could it? City dwellers live in cities because of the things the cities offer them, in spite of the less desirable aspects of city living (crime, taxes, grit, etc). If these residents are facing the prospects of another summer without those city amenities (restaurants, theatre, sports, music, etc), then it makes sense that they’ll continue to look outward to the lakes and the beaches and the mountains. The wise realize the market trends aren’t yet permanent, and they look to a vacation destination that they can reach quickly by car. And if they’re looking for a destination that offers that important criteria, what an incredible thing it would be if the destination was also world class.

2021? If the stock market doesn’t melt, you can expect a repeat of 2020. As with 2020, I’ll be here to guide you through it all, because unlike what you might have heard not all rural real estate is worth buying. Just because the market is hot doesn’t mean we should abandon the principles that guide sound real estate behavior. If you were overwhelmed by the 2020 frantic push, let’s work together to buy or sell your piece of Lake Geneva. No matter what the market condition, you still need the sort of advice that I pride myself in offering my clients and customers. Here’s to the new year.

About the Author

I'm David Curry. I write this blog to educate and entertain those who subscribe to the theory that Lake Geneva, Wisconsin is indeed the center of the real estate universe. When I started selling real estate 27 years ago I did so of a desire to one day dominate the activity in the Lake Geneva vacation home market. With over $800,000,000 in sales since January of 2010, that goal is within reach. If I can help you with your Lake Geneva real estate needs, please consider me at your service. Thanks for reading.

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