I reviewed the past 30 days of lis pendens for Walworth County, and while there are some new possible foreclosures in the works, the scene looks very much like it has looked over the past twelve months. There may be some let up in the foreclosure filings, but given the confusing way that lis pendens are recorded by the county, it’s hard to say with certainty if that is the case. I continue to be surprised by the lack of foreclosures in Geneva National and Abbey Springs. According to my non-scientific review, Abbey Springs looks to have two new lis pendens (basically an official notice of default that warns the homeowner to make good on the terms of the loan or face foreclosure), and Geneva National doesn’t appear to have more than three new filings. In developments of this size (Abbey Springs 500+ units, GN 1100+) the low foreclosure numbers are impressive no matter how you look at it. Many developments in the Midwest have foreclosure rates as high as 10%, and both GN and Abbey Springs have rates that are probably shy of 1%. Overall, it’s a nice sign of strength by these two markets as they buck the foreclosure-happy national trends.
I found a lis pendens filing in the Abbey Villas, but only found the one- again, a solid display by that large condominium association. Abbey Ridge has a new lis pendens, but it’s a re-file of a previous filing, which leads me to believe that the owner is trying their best to avoid the foreclosure. Remember, our fearful leader and his loan modification program work to encourage default, as many of the loan modification programs are not available to homeowners who are not yet in default. In other words, if you want help, you fist have to prove that you’re in trouble. By proving your in trouble, you have guys like me that write about it and make a market possibly look weaker than it really is. Genius.
There is a possible foreclosure at Pine Court in Williams Bay, a small, affordable condominium association on the Eastern edge of Williams Bay. This isn’t normally the sort of thing I’d write about, but these units are used as weekend retreats by many, so they indeed fit into our vacation home market here. More interesting is a possible foreclosure brewing in the South Shore Club. It’s a vacant lot, but it’s not up front on the lakeside of the development. Either way, I’ll be interested to see what happens with this unit. It might sell via short sale (email me if interested), or it might sell at sheriff’s sale (the note is too high to make this an attractive option). Another theory is that the developing partners may step in and buy the unit back to avoid a foreclosure sale on the record, but now I may be getting ahead of myself.
A development that looks to be in serious trouble is Lake Lawn Lodge. More correctly, The Lodges at Lake Lawn. These condominiums don’t seem to fit into the market right now, and I see at least a couple lis pendens filings there over the past month. I would expect to see many more foreclosures here throughout 2010, and it’s probably a good one to sit out. There are also foreclosures involving Walworth County based timeshare units, which furthers my theory that time shares are of the devil.
Some of the foreclosure activity at Geneva National looks to be focused in the unfinished enclaves within the development. I wrote a year ago about these trouble spots, and recommend avoiding unfinished enclaves as a whole, be it something in Lake Geneva, or anywhere else. Geneva National as a whole is solid, but some of the individual markets within that association are iffy at best. Unfinished developments leave too much room for error, as developers could slash prices, lower standards, or worse yet, succumb to foreclosure. If you’re looking to make a solid investment in this market, I wouldn’t touch anything that is more than 20% unfinished, as the risk is too great.
I didn’t see a single lakefront lis pendens on Geneva, so that’s a positive sign for the lakefront market. All in all, expect foreclosure activity to remain steady throughout 2010, and probably through 2011 as well. If employment comes back sometime in the next two years, that still doesn’t mean that property values will increase enough to keep buyers in their homes. As long as negative equity exists and Obama’s only plan to stop foreclosure is through loan modification, foreclosures will not only exist, they’ll be commonplace.