Generally speaking, I do not enjoy watching the foreclosure markets. The foreclosure scene in Walworth County today resembles a large stack of hay. As a devoted follower of any real estate deal wherever it might be found, I am in search of a very small needle. To be sure, the haystack that is Walworth County isn’t nearly as big as the haystack that is Florida, but the needle is very slender nonetheless. As I root through the pile, I don’t examine every clump of hay, but I do have my eyes wide open hoping to catch the glint of that needle. Or hoping to have it stick into my finger and thereby find it by default, either way. The foreclosure scene might not be overwhelmingly exciting, but any follower of any market should be aware of the goings on of that segment of the market. If the goal is to add layers and layers of context to any real estate search, then foreclosures are as relevant as any other condition that may affect a market.
The Lake Geneva foreclosure scene is fairly insignificant, though it is having an impact. There is a lakefront home scheduled to face the sheriff’s gavel this spring, but this property will never see the generic white and oak interior of the foyer where that sale should take place, because it appears that it will be sold conventionally first. Remember, the deals on sheriff’s sales are not usually at the sale itself. Nor is the deal usually available via short sale. Instead, the best deals on distressed property tend to present themselves long after the short sale option has passed, and long after the bank stood in the foyer of the jail wishing someone else would have bid on that property so they didn’t have to scratch their name on the deed. The deals occur when the property is bank owned, and in the case of that particular lakefront, a little patience may yield a juicier result.
There is another lakefront short sale listed, and this one is also in Fontana. It should be noted here that I have only seen lakefront foreclosures in Fontana, Lake Geneva, and Linn Township. To my infinite knowledge, Williams Bay has not had a lakefront foreclosure during this most recent cycle. The short sale offering on the Fontana lakefront poses a very interesting opportunity for an entry level lakefront buyer. The home is large, though in need of a bit of lipstick, and boasts level frontage with a spectacular pier. With an asking price in the mid $1MM’s, it’s poised to sell. I’d be a buyer of this home if I could impose the will of my own price on the bank- a bank who almost assuredly doesn’t want to take ownership of this home because they know the scenario that I described in the last paragraph all too well. An interesting truth about this property: even though it’s being offered as a short sale, there has yet to be a lis pendens filed against the owner (that I can find through public records). If the property where anywhere near the point of sheriff’s sale and an ultimate REO listing, there would probably have been a lis pendens filed by now.
The rest of the foreclosure market bores me. There are plenty of foreclosures in Delavan and Elkhorn, and more in Bloomfield. The condotel’s in the area are featuring a steady trickle of foreclosures, as are properties at Lake Lawn. With the perpetual state of limbo at Lake Lawn, I’d expect to see serial strategic defaults here. There is at least one pending foreclosure in Country Club Estates, and a new bank owned property on the market in the city of Lake Geneva. This lakeview home is in need of work (or a wrecker’s ball), and while it is listed as having lake access, I cannot find any reason to believe that it actually has association access. Even so, it has a view, and the neighborhood supports solid value. If you’re looking to build a home with a view and don’t care about water access, this might be an option. The lakefront condo market continues to elude the foreclosure bug, and I remain as shocked as ever at the strength that this individual market has shown. While the liquidity may be all but gone for the moment, the lack of foreclosures affecting lakefront condominiums is a nice sign for the future of this market.
The South Shore Club still has a bank owned vacant lot on the market, though that will hopefully be sold soon enough. The select REO sales at the SSC have presented opportunities for new buyers to capitalize on the lull in that market, and I’d expect a couple more foreclosures in this fabulous development before the dust settles several years from now. The rest of the lake access market looks quite solid at the moment, though the foreclosure trickle will continue to weave and wind it’s way toward the lake, seeking out the path of least resistance, or in this case, seeking out the owner who might have bitten off just a bit more than they could chew. If you’re on the hunt for a Lake Geneva foreclosure, best deal with the guy who knows this giant hay stack better than anyone else (that would be me). (To the other agents reading this, stop your clocks….now. This post just took me 17 minutes to write.)