Lake Geneva Lakefront Market Update

March it says. March. It doesn’t mean stroll. It doesn’t mean you should saunter or dawdle or wander. It says March. It’s a command, dammit. March! Such an aggressive month, with its sunshine and its rain and its snow and its wind. The worst month? Maybe. Militant and angry, March. I can’t wait for April so I can get out of this dictatorship of March. The Waters Of March? The Ides Of March? More like The Petulance Of March.

Anyway, the lakefront market. It’s behaving in a rather fascinating manner today and I’m happy to share my findings with you. The market evolved quite a bit this month and revealed things to us that we were wondering about in February. Or, I should say, things that I was wondering about. The market has been firm in its handling of the upper bracket lakefront homes for the past two years. Give it an upper bracket listing, price it in line with the last comp, and it’ll sell. Each listing that hit the market in the last year listed in excess of $10M has sold. Of course, I’ve been the one to list all of those properties so perhaps it’s just that the fashion in which I sell those homes is currently in vogue? Ah, but I’ve misspoken, because one such upper bracket listing didn’t sell, but that’s the one that I didn’t list. Correlated? No one can be sure.

The segment that’s been struggling is our mid-range lakefront priced between $4M and $6.5M. That segment tested its boundaries last spring and summer and the market firmly pushed back against any hopes of pricing that went up and to the right forever and ever. I was able to sell several lakefront homes in this segment during 2023, and have one pending now (off market, sorry) at the upper end of that range, but those homes sold because my pricing style recognized the stall in this segment. If there are four lakefronts dragging on the market in that segment, does that mean the pricing is accurate? Of course not, but that understanding is not quite as common as you might think.

That stagnant inventory from 2023 has almost entirely cleared from the market as of this morning. A listing on the south shore’s Maple Lane was originally listed for more than $5.8M in 2023 and just sold for $4M this month. A listing next to a hotel was originally priced at just under $6M last summer and has found a buyer after a series of price reductions that have positioned the last ask at just under $3.9M. A lakefront on the north shore that originally listed for just under $7M has finally attracted a buyer at the latest asking price just under $5M. Three listings all found buyers but only after adjusting their prices to where the market is now, not where they once thought it was heading.

In this, the market has proven itself yet again as being the ultimate arbiter of market direction. Is the market in this segment accelerating at the moment? Absolutely not. The market has just three available offerings today, and what happens next is going to be potentially confusing. With the new contracts on the lakefront, and inventory once again constricted to 2022 levels, I think the market has set itself up for another round of inventory at prices that are, indeed, elevated compared to the recent activity in this segment. Note I keep saying “in this segment”. That’s important to note because the entry level homes are still nearly instantly liquid in the $3.2-3.7M range, and the upper bracket is liquid so long as pricing reflects some variety of reality. It’s this lower-mid segment that has been struggling through 2023, and that’s the market that I think will actually rebound this summer.

Why shouldn’t it? If we’ve learned anything over the past four years it’s that inventory drives pricing more than any other contributing factor. And in this case, we have equity indices at all time highs, crypto resurgent, and rates moderating. Those factors should bring a few more buyers to market, and when you only have a few bits of inventory, a few new buyers is all it takes. That’s not to say I think the current inventory gets absorbed quickly and at elevated pricing, because that’s not what I think at all. I think that pricing in this segment will firm up once the last few bits of inventory are sold and new inventory is introduced at the typical Lake Geneva pace.

If you note optimism in my tone this morning, that’s because I think it’s terrific that the market has both pushed back against absurd pricing AND decided to absorb inventory once the pricing lines up with the market’s expectations. That’s a sign of a healthy market, and at Lake Geneva, all things are pointing to a positive market cycle this summer. If you’re a would-be seller, this is good news, but in the story there is also an important lesson. Unjustified pricing is still being punished, and if you need proof all you need to do is look to the sales journey of these recent closed and pending properties.

About the Author

I'm David Curry. I write this blog to educate and entertain those who subscribe to the theory that Lake Geneva, Wisconsin is indeed the center of the real estate universe. When I started selling real estate 27 years ago I did so of a desire to one day dominate the activity in the Lake Geneva vacation home market. With over $800,000,000 in sales since January of 2010, that goal is within reach. If I can help you with your Lake Geneva real estate needs, please consider me at your service. Thanks for reading.

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