Last year at this time, it was not 70 something every day. There were no piers in on Geneva, no Sunday boat rides taking place, and no grass of any significant shade of green north of Princeton, Illinois. This spring is not that spring. This spring is different, which is to state the obvious. But it is also different in the way the lakefront market is behaving. The market last year was impressive, with a full volume recovery evident by year’s end. Yet this year, this spring, this glorious, warm year, Geneva Lake is on track to absolutely obliterate recent sales results. This year, it won’t just be the weather that is different.
By April 1st, 2011, there were 4 lakefront sales on Geneva. One on Basswood for $1.8MM (not a normal Basswood lakefront), one on North Lakeshore in Fontana for a similar amount, another in Geneva Manor for a similar amount, and one on Bonnie Brae for $2.65MM. These were the four sales. This year there have been three lakefront closings so far: The 700 Club for $2.4MM, and two in Fontana, both on South Lakeshore for $2.5MM and $2.75MM respectively. For a pure land play, I think the listing on South Lakeshore that closed at $2.75MM might end up being the single best land grab on Geneva in at least the past two years.
But where 2012 is different from 2011 is in the current pending activity. There are no fewer than three lakefront sales pending right now, including the great entry level property in Glenwood Springs ($1.695MM) and a land buy in the 700 Club around $3MM. The newest member of the pending club is the fine estate on Basswood priced at $3.4MM. This is an impeccable piece of property and if the sales price gets under $3MM I’ll be happy for the buyer. We’ll just have to wait to see what the ultimate sales price is, and then we’ll weigh in as to whether or not we approve of those terms or simply approve of the property.
So with those three additional lakefronts pending, there will shortly be seven lakefront sales on Geneva. There were not seven closed lakefront sales on Geneva last year until late June, which means we’re likely to be at least two months ahead of the 2011 pace- a pace that was still torrid. There are buyers out there right now, lots and lots of buyers, looking for lakefront vacation homes. The appetite for this real estate is similar to my appetite for jelly beans that I find stashed in a cupboard late on some night when my family has gone to sleep and I am alone, with a soon to be empty bag of jelly beans. There is plenty of inventory, but the market definitely seems to be divided. There are more buyers seeking land plays in the $2MM-$2.8MM price range than I remember seeing for quite some time, even while the entry level lakefront market has some fine opportunities that continue to be overlooked (Oak Birch $1.599MM, $1.499MM).
When I am writing to you sometime around Memorial Day, which approaches so rapidly you likely have a piece of tape on your screen where the countdown is (so as not to remind you of your procrastination), I fully expect there to be 10 lakefront properties on Geneva between closed and pending transactions. There are many buyers, there are many properties, and there are stock indexes hovering near multi-year highs. There are also interest rates that make borrowing big money cheap, and there is a general consensus among many that while price fluctuations still exist, they likely exist only in single percentage point moves to the plus or negative. The volume that we’re seeing is also driving some list prices lower, as sellers react to sold comps and make moves to sell while the spring market is still hot. (Folly Lane just reduced from $3.25MM to $2.99MM this weekend.)
Some buyers will see the mood of the market and rush to make bad decisions. The increase in volume does not mean there aren’t still tremendous values on the open market, but many buyers will find a way to miss those values and slide into some lakefront- any lakefront- just so they don’t miss the boat. To do so would be a huge mistake, and I’d be more than pleased to help you avoid such an unnecessary fate.