Lake Geneva Foreclosure Update

When it comes to gauging a foreclosure scene in any particular market, I suppose the best we can hope for is to ascertain at the very least if those foreclosures are rising or falling. To check whether more owners are falling into default or whether fewer of them are. This foreclosure issue is the main reason that I see proclamations of widespread real estate recovery as heresy. There’s no real way a market can mend and then begin the slow movement towards normalcy if delinquency rates are steady or rising. They must fall, defaults must fall, foreclosures must fall. Without all that falling, a real estate market cannot be labeled as recovered. Yes, foreclosures can and will exist in recovered markets, but to have the number of buyers exceed the number of foreclosures isn’t enough because that fails to take into account the existing inventory and the normal palpitations of a functioning market.

Anyway, Lake Geneva. The foreclosure scene here appears to me to be largely the same, with modest improvement. In checking the Lis Pendens filings this morning, I see a few trouble spots, but I’d guess that on an average I see fewer notices of serious delinquency now than I would have over a similar period last year, so that’s a positive. I’m not trying to measure the entire market with my brief bits of research. Instead, when I view scheduled sheriff’s sales and then view perhaps 30 days of LP filings, I think I can get the mood of the distressed sale scene and relay it to you with some level of accuracy. Combine those two searches and weigh those against the current REO inventory and you’ve captured about as much information as anyone can expect to. It’s with that information and with that disclosure that I tell you this: I think things are getting better, slowly.

And it isn’t that things were all that bad. They weren’t. We were lucky here. There was no widespread foreclosure issue afflicting the lakefront, due in large part to the cash positions of a shocking number of owners here. It’s a healthy market in times good, and it remains healthy in times bad with mere pockets of weakness that have mostly been exposed. I see a pending foreclosure on the lakefront today, I see one trouble spot in the South Shore Club, and I see a couple (two) lake access homes fighting to stay afloat. I see fewer pending foreclosure actions in Geneva National than I think I’ve seen in a while, and Abbey Springs remains vehemently opposed to the foreclosure process.

There are a few short sales of note around the lake right now, most famously my listing on Conference Point Road. That’s a tremendous property, and should be considered by anyone looking for a home that punches far above its price tag. There’s a short sale on the lakefront in Somerset, and the three bedroom condo should find a buyer very quickly at the newly discounted price of $699k. That will be a painful comp for the lakefront condo market, but the game is late for this property, and there’s just no way to avoid it. There is another private sale in the works of a foreclosed on property on Fontana’s northern shore. Expect that entry level lakefront home to hit the open market only as a sold comparable.

As a theme, I’d expect Geneva to continue to mend this year. I think the weakest of the ownership has already relinquished their properties and the market has greedily absorbed them. That’s the underlying benefit of a foreclosure situation, the ability of a market to lick its own wounds and return distressed properties to proper, stronger hands. Some of these pending foreclosure actions will progress all the way to sheriff’s sale, others are only at this stage because their owners are playing a high stakes game of chicken with their lenders. As with most games of chicken, there are no real winners no matter the outcome. For now let’s watch for foreclosures and the opportunities they can present, but let’s rejoice in the fact that there appear to be fewer and fewer of them.