Foreclosures. They’re interesting, and awful. Awful to be a party to a foreclosure, awful to be a neighbor of a foreclosure, awful to be the bank foreclosing. There are no real winners in the foreclosure game, at least immediately. Long term there are many winners, in the same way that a forest fire cooks some rabbits while it chars a vacant mountainside but after the smoke clears and the damage is surveilled, new growth can begin. The easy thing now is to forget about foreclosures. To pretend they don’t exist, to wish they hadn’t. But that’s not the smart way to go about our lives, and so we’ll take a look at the Lake Geneva foreclosure scene to determine if there’s anything afoot.
First things first, let’s check the MLS. As the local MLS scratches and claws to try to remain relevant, much like Blockbuster tried to remain relevant and MySpace, too, they’re implementing different search fields to prove they’re at the cutting edge of technology. They aren’t, but they’ve given agents an opportunity to mark listings as “REO/In Foreclosure, and Shore Sale”. That’s something, so let’s search. Walworth County, Singe Family, both distressed selected: Seven total listings. Two under contract. Nothing priced over $250k. Year to Date there have been 72 such sales in Walworth County, all but five priced under $300k (the most expensive was a mid $400s Delavan Lake property). Looking back to 2014, when the MLS function either didn’t exist or wasn’t readily used, there were 170 such sales in the MLS.
There are two other methods to check for brewing foreclosures, both involving public records searches. Looking at scheduled Sheriff’s Sales, there are just 19 scheduled at the moment. None of those involve any Lake Geneva vacation home real estate, and most are in the lower price ranges of our primary home market (sub-$200k). For a reminder, the Sheriff’s Sale is a step in the foreclosure process. An owner/borrower still has a redemption period that typically extends past the Sheriff’s Sale, but this is usually a last, fatal step in the foreclosure process.
Taking it one degree deeper, let’s look at the Lis Pendens filings over the past 30 days. Remember, a Lis Pendens filing is essentially a notice of default. The bank is telling the borrower: YO. You owe us money. We aren’t messing around. Pay up or we’re going to foreclosure. There are a handful of filings, but from what I can see there’s only one recent LP filing that affects the vacation home segment. That is a filing on a home in a lake access association that lacks a boatslip, or a view. Nothing looks to be in trouble on the lakefront, excepting the property that with IRS entanglements on the North Shore.
Beyond the lake access markets, one item of surprise. Geneva National looks clean. GN, for those who didn’t know, had some significant foreclosure trouble during the last downtown, as volume dried up and foreclosures pressured valuations. My assistant Vicki closed on a GN foreclosure this fall, but these properties have been few and far between this year. Overall inventory has dropped considerably in GN, and without any foreclosures brewing (there may be one or two that I don’t see), GN is poised to continue its very healthy recovery.
Foreclosures will be part of any market, no matter how healthy. A foreclosure here and there can be a positive for a market, as it provides a bit of liquidity when inventory is low and removes property from weaker hands. Today, the ownership base at Lake Geneva looks to be as strong as ever, and a decided absence of foreclosures appears to be the new normal.