If I were to line up the three most similar associations on Geneva’s south shore, I would gather up the Lake Geneva Club, then Shore Haven, and finally Sybil Lane. I would stack them in a single file line, with each home represented and I would then most likely give a flag or some other display to the president of each association, and have their membership stand behind them as if leaving a third grade classroom to head towards gym class. If I did this, I would put the Lake Geneva Club and its members in the front of the line, and I would then arrange Sybil Lane and force them to the back. I would do this because of these three similar one lane associations the Lake Geneva Club is the obvious king in my eyes, and more obviously in the eyes of the market. And if we were all lined up in that classroom and the teacher turned off the lights because Shore Haven was being a touch unruly, I would be standing at the front of the line, and not just because I cleaned off my desk first.
Over the past several years, years that we’ll call the modern years of the Lake Geneva Club, there have been several sales. The first sale that catapulted the club into the modern pricing era was one that I closed for $790k in 2006. That sale was closed at what was probably the absolute height of the market here, a point that is not lost on the client that I sold that home to (oops). Thankfully, the market has proven time after time since then that homes with lake views and boat slips and proximity to the water that borders on ridiculous will always be desirable, and they’ll hold their value much better than other homes lacking the magical Lake Geneva trifecta. After that sale in 2006 there was at least one private sale, and then a bit of silence. Other homes on the road tried to capitalize on that high sale price from 2006, but those who were doing so failed to realize the value of proximity. The market slowed and softened, and in time, so did the market at the Lake Geneva Club.
Things were slow for a while. The market struggled to find its footing, and buyers struggled to understand where the bottom was, or would be. Remember, market bottoms are not established and enforced by sellers who dictate what price levels they are willing to succumb to, bottoms are formed by buyers who form opinions of individual markets and then wait for sales prices to line up with their opinion of value. That market bottom for the Lake Geneva Club solidified during 2010, when two sales occurred that reinforced what buyers already knew. The traditional, older homes in the Lake Geneva Club, measuring at least four or five homes off the lake (those closer than that will have a premium placed on them for proximity and the slight views that they possess) needed to sell in the $500k range. That’s what buyers wanted, and ultimately, during the past year, that’s what sellers conceded as well. I sold a cottage last June for $505k. A good sale, a solid buy. The seller of that home purchased the home next door for $517k (or so) and promptly tore it down. Up the road, another sale closed for $530k. Three months yielded three sales in the club, all within $30k of each other.
Then 2011 showed up, and one of the listings that had been present in the club during 2010 took a distressing turn. The seller wanted out, and as is my good fortune, I found a buyer who wanted in. Yesterday I closed on another Lake Geneva Club property, making it the third LGC sale for me in the past five years. The home was large, on two full lots, but it had some issues that affected the marketability of it. What issues? Hmmmm… How do I relay this in the most delicate fashion that shows my sensitivity and yet tells the full story of this home? The home was ugly. There. That’s what it was. It was ugly and everyone knew it. It wasn’t that it wasn’t a fine home- it was- it’s just that aesthetically it didn’t fit well on a block filled with both sparkling new construction and classic 1930s cottages. It was an albatross, and as such, it sold for $400k to a value minded buyer who will either repair what ails this vacation home or haul it away in pieces in the back of so many pick up trucks and begin anew.
If the market had, in 2010, established a solid bottom for cottages here, one that was proven not once or twice but three times over, how does a cottage slip to a buyer pleasing number of $400k? Did you read what I just wrote in the paragraph above? The home wasn’t a cottage. It didn’t have cottage charm and it wasn’t appealing to anyone’s nostalgic sensibilities. The strange truth is that had this old cottage never been added onto over the years, and had it never been updated with new carpet and fixtures and new faux wood floors, it would have sold for more money, and of that I have no doubt. The sale was solid at $400k, and will do little to drag on the rest of the Lake Geneva Club market moving forward because it simply was not like the other homes on this quaint drive.
As of today, there is just one other listing in the Lake Geneva Club on the open market (I’m not counting the store, as I don’t comment on commercial property). If the club is to weather the slight storm of this low sale, it would be well served to avoid any new listings for a while. Let the active home sell, and let the market settle for a spell. This would be best for the pricing of the market inside this desirable little club. There has been much new construction on this lane. Buyers have been buying and improving, and owners have been tearing down and rebuilding. It is a quality association, and my absolute favorite of the three single lane clubs on the south shore of Geneva. To my client who purchased this property, a big thank you for allowing me to help. To the club itself, a job well done on improving the club to the extent that was necessary without going overboard. To buyers who like the idea of their very own Lake Geneva Club cottage, see me about the active listing there (not my listing). With three sales in the low $500ks and a new one at $400k, you probably don’t need to ask where I feel the value of the remaining inventory is. If you do need to ask, I’m begging you to please start paying attention.