Lake Geneva Lakefront Market Update

Lake Geneva Lakefront Market Update

Lake Geneva Lakefront Market Update

I used to liken writing this blog to providing color commentary during a baseball game. A sharp line drive to the shortstop. The Cubs in their home uniforms with white shirts, white pants, blue pinstripes and blue ball caps. That sort of thing. The thing about color commentary is that you can weave the commentary around the events of the game, and the game, as games tend to be, would have plenty of action and opportunity for commentating. Imagine now, if you will, what it would be like to provide color commentary on a ballgame that featured seven pitches and one hit. The game would still take two hours and fifty-one minutes to play, but the action would only take up four minutes of that time. This is what it’s like to be the color man in the Lake Geneva market right now. It’s not that much fun, and if I forced it, you very well might find it to be painfully boring.

In spite of this opinion, the market does have some movement that bears noting. The piers are going in this morning, the daffodils are blooming and I’ve started thinking about where I put my Oriole feeder. Spring is nearly here, and once we throw a few 70s on the board this weekend I think the anxious anticipation of another lakeside summer will become impossible to ignore. The market knows it’s spring, but it’s not super keen on providing any inventory for the summer revelers to consider. So far this year the broad Lake Geneva lakefront market has introduced exactly three new listings to the market. One in Glenwood Springs that was quickly gobbled up (mid $3’s), one in Dartmouth Woods on the north shore of Fontana (low $3), and my legacy estate offering on Snake Road listed at $20.75M. There have been no fewer than three other off market lakefront deals put together, two of which were on the North Shore, with one offered in the low $4s and one in the upper $5s, and the third in the South Shore Club that closed at an eye popping (or gauging, if you’re a would-be buyer) $5M. If we’re looking for trends, we can expect the off-market deal making to continue, as the MLS only serves a real purpose in a market where sellers cannot otherwise find their buyers. If I’m your broker and you want to sell your house, wouldn’t you like it very much if I just delivered your buyer and we did a deal off-market for lower fees?

The market has other contract movement worth noting as well. The $12.9M house in Lake Geneva that has been on the market for a considerable period of time, and that has endured at least two contracts that failed to close, has a new buyer. There is rumor as to who this buyer is, and this move will likely introduce another piece of lakefront inventory to the market. My Birches listing ($3.99M) is pending sale, as is the house at the end of Knollwood on Oriole Lane ($5.625M). Combine those two with the aforementioned Glenwood Springs home ($3.495M) and the 590 South Lakeshore Home ($12.9M) and you have the makings of the most robust market I’ve ever laid eyes on. I don’t care how hot Austin is. I don’t care how hot Nashville is. I only care about this market, and with just three lakefront homes listed for sale today and many more pending, this market couldn’t be hotter if it tried.

It wasn’t so long ago that I’d write these reviews and we’d have thirty lakefront homes to consider. Inventory typically hovered between twenty and forty active lakefronts, and the market functioned quite nicely in that range. At any point in time you’d have some sellers more motivated than others, and so deals would print that represented some variety of individual urgency, even while others held out and remained on market. This mix was the mix we were accustomed to. Today, there is no mix. If a buyer would like to buy a house, the buyer has to do his or her best to buy the house, and if the seller isn’t willing to play ball, then the buyer has a decision to make. What’s the value of a summer spent lakeside? If a property fits your aim but you want to pay $4M and the seller wants $4.25M, is this goal worth $250k? The answer has been a resounding yes.

That brings us to the concept of picturing this market in a non-covid world. First things first, there seems to be plenty of reason to believe we will not be in a “normal” post-covid world for quite some time. Regardless, what’s important for market followers is to understand what covid did to our lakefront and lake access markets. Did it, as some suggest, cause throngs of buyers to leave cities in search of lake houses? Sure it did, sort of. But I contend the current market phenomenon is based more on a restriction of supply than a dramatic increase in demand. If you restrict supply you don’t really need that many more buyers in order to drive prices up. You just need approximately the same number of buyers clamoring over scarce bits of inventory. This current market cycle features an added buyer component, but the real factor at play is an absolute absence of inventory. Why the absence? Because anyone and everyone with a house at Lake Geneva has been getting tremendous and likely increased use out of their homes for the past twelve months. Want to understand the Lake Geneva lakefront market? Look to the supply.

I don’t anticipate anything changing in the market anytime soon. Will inventory loosen up at some point in the next year? I believe it will, yes. But will there be a dramatic increase that might have some negative impact on pricing? I can’t see that happening. What I think actually happens next is that buyers who did come to our market as relatively impatient purchasers will recognize what has made this place so desirable for so long. Covid or not, weekends here are better.

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