I have a friend who ordered a fancy new car two years ago. It was the sort that has a roof you can remove, ideally during sunny stretches of weather, so you can drive under the summer sun. The car would be great in the winter, I suppose, but the real tasty bit of this thing is the removable top, which makes it more of a summer car than a winter car. This car that was ordered two years ago was maybe going to show up this May, but then it didn’t. And it didn’t show in June, either. July? Nothing. Mercifully, in mid-August, it arrived, just in time for summer to be nearly over. It was like ten thousand spoons when all you needed was a knife.
This is how it feels to shop for a lake house when it’s not just about to be summer. To buy a lake house in March is to be full of hopeful excitement for the summer to come. You can prepare, plan, scheme, and then, once the weather matches your mood, you can immediately and thoroughly enjoy your new home. When you buy a home in September, the feeling just isn’t the same. Your new toy can’t be used in the way you really wish to use it for many months, and because of this delayed gratification the motivation to secure such a thing can wane. It does wane. It will wane. People, why are we like this? We know the lake house purchase matters to our future, and we know if we don’t find something soon we just won’t be able to enjoy next summer how we’d like, and then we’ll be facing the same issue the following fall. In spite of this, there is little debate that the purchase of a lake house is less exciting a proposition in the fall than it would be in the spring. This is one reason why the market at Lake Geneva calms down in early August every year.
As I expected, the lakefront market has added inventory this year, and as I expected, certain bits of the inventory has been overpriced to an extent that the market has pushed back. Pricing was allowed to run free and loose in 2021 and 2022, and even as we have significant sales underway and large prints incoming this fall, the market has largely agreed that we are no longer looking to the last sale and adding 10% to the valuation as we seek to price the next bit of inventory. The market is now in the support building phase of this run up, as we are adding in comparable sales at and under the high water marks to firm up the market pricing at this new range we’re busy establishing.
Recent sales on the lakefront include an off market transaction on the south shore in the mid $4s. It should be noted that everyone likes to decry off market sales until they have an opportunity to close off market sales, then no one seems to mind them… There are pending lakefront contracts at two second tier lakefronts in the upper $2s and the mid $3s, another recent sale around $4M, and some incoming new inventory in the low $3s that will determine if the market is concerned about the potential redevelopment or abandonment of the George Williams property. That’s something we’ll discuss at a later time, but it is now public knowledge that the GWC property is available for sale (not my listing, for terrible shame), and we’ll see if the adjacent properties are impacted by this uncertainty.
There is existing lakefront inventory that has been dragging over the summer, as sellers overshot their asking prices under the presumed assumption that the market was going to go up and to the right forever, no matter the offering or the pricing. The market has decided that not every home is worthy of a fresh premium, especially homes that lack unique lots, locations, or finishes. If you have a mediocre house on a mediocre lot, no amount of fluff can make that house sell for a significant market premium. I do not view these stagnant bits of inventory as a negative for the market, though I can understand how some might interpret aging inventory that way. I suspect value hunting buyers will have some real pricing flexibility this fall if targeting aged inventory, but that’s only a guess.
I have significant activity on my Folly Lane lakefront listing, and do expect that will be sold soon. I have a pending contract on the north shore of what will undoubtedly become the high print of the year on the lakefront not only for Lake Geneva, but for the entirety of the Midwest. The market remains remarkably active at all price points, but we are certainly in the middle of that August pause. High interest rates aren’t helping our market, but they aren’t hurting it as much as they’re hurting other markets right now. I expect we’ll continue to print transactions through the fall, and would not be surprised one bit if most of these remaining bits of inventory sell to opportunistic buyers before the year is up. After all, the only way to be ready for next summer is to be motivated in the off season. Which, in case you haven’t noticed, is right around the corner. And as always, if you’re curious about what’s going on behind the scenes, where off-market inventory exists and intel on transactions is available, I’m here to help.