Lake Geneva Club Sells

I don’t really remember real estate “school” all that much. I went at night, me and a bunch of other people from various walks of life, most of whom thought that a career in real estate wasn’t the worst thing imaginable. Of those I went to “school” with, I think there is one still selling real estate, the one that I sat in the back row with. I really don’t remember paying attention during those classes. Something about not being mean to people and something about closing statements and disclosures. There was a little of that and a whole lot about not steering people to certain places. About not playing favorites. It’s obvious to everyone now that while I vaguely remember those warnings I have no real interest in heeding them. Today, I’m a steerer, all right.

But instead of steering people away from things for nefarious reasons, I steer them towards things for their own good. I may steer someone away from certain associations, but only because I’ve sold real estate for 17 years and I know, for one reason or many others, that certain places aren’t the best. They aren’t dangerous in terms of criminal activity, but if you could buy in a great association and you instead choose to buy in just a good one, that may be arguable as a criminal offense punishable by a lifetime of regret. And who wants to live under such a condition? Not me, and not my clients, and that’s why I push and pull and prod and yes, jeer, in hopes of sending my prized clients down the proper path to their own vacation home bliss. That’s why I push people to the Lake Geneva Club.

There are several streets over there, by this club. There is Oak Shores, which I like. Then there is Shore Haven, which I like. And Sybil Lane, which I like, but it’s more of an affection that borders on toleration than on celebration. And finally, there is the Lake Geneva Club. Though these four associations are geographically in the same location, there is something different about the Lake Geneva Club. You can feel it when you walk the lane. You can feel it again when you reach the lakefront. And you can feel it when you walk onto the pier. If these four associations can be lumped together in one pot for comparison’s sake, there is only one that rises to the top.

This week, a sale at the Lake Geneva Club. Not my sale, which leaves me sad and confused, but a sale nonetheless. The list price of this home, a home with some distance between it and the water, was $699k. The home was nice, but while it did posses a transferable boatslip that slip was in a very difficult position on the pier. Some buyers don’t notice such things, and this one didn’t seem to mind, so the property sold this week for $595k. That price, relative to the ask, looks like a bargain, but I’d argue that it was a fine market price where neither buyer nor seller won. However, the new buyer now gets to experience one of my favorite lanes that leads to Geneva Lake, so I suppose the buyer in this case should be declared the winner.

This sale is important for the club for many different reasons. First, any sale is good as it eliminates inventory, and inventory mitigation is the key to price increases. Second, the sale moves the club beyond the comp bomb that I dropped on it two years ago when I sold a badly botched home on a double lot for $400k. That home has since undergone a major facelift and is now in perfection condition, and this has been the trend on this street. There is little left in need of a major overhaul. There is another cottage on the street for sale in the $500ks, and as of recently that cottage is also under contract pending sale. There are reasons to believe that the Lake Geneva Club will, in possibly short order, return to the days when inventory was at zero.

To note, the property that sold for $595k this week had sold in 2003 in the high $300k range. If we are to believe, as I do, that pricing has returned to 2003 levels, then the Lake Geneva Club has certainly bucked that broader trend. As another metric, could it be argued that this property was worth, at the peak, 30-40% more than this $595k? That would put the value on the sunniest day of mid 2007 hovering around $800k. Is that a reasonable thought? You’re right. It isn’t. The value was never that high for that sort of older home. In fact, it might be difficult to argue that this home was worth $700k+ back at that peak time. All of those fragments to say this: The Lake Geneva Club has found a way to avoid the pricing meltdown that has afflicted most everything else around the lake.

Is there a reason for this masterful dodge? Does it have to do with the fact that the LGC didn’t have transferable slips for each home back in 2003? Or does it have to do with the simple fact that a walk down the single lane at the Lake Geneva Club is just a bit better than the walk down nearly every other lane around the lake?