The lakefront market has had itself a nice little week. Inside of the last seven days we’ve had two lakefront sales and another fresh lakefront contract. Spring is springing and summer is coming and the buyers know it. The inventory on the lakefront has, after these spate of sales, shrunk to only two true lakefront homes. On March 26th I wrote that it was likely the old inventory would be cleared to make way for the potential of new inventory, albeit inventory that will come on at more aggressive pricing, and it appears to me now that’s exactly what is on the verge of happening.
But first, some lessons in the sold inventory. One sale adjacent to a large hotel closed for $3.5M this week after originally coming to market in the spring of 2023 for $5.995M. Price cuts on top of price cuts finally allowed this property to sell, but we can’t ignore that spread from initial list to closed price and wonder… The other sale, on the North Shore, closed for $4.5M after originally coming to market in the spring of 2023 for $6.995M. You can imagine what I’d say in private about these two, but here’s the public commentary. When pricing is reckless and in no way associated with accurate value, the outward appearance is that the market is somehow weakening. The headline writers in Chicago would say “Massive Discounts Abound In Lake Geneva.” But are these massive discounts? I would argue they are not. They’re just homes selling for what they’re likely worth in spite of their initial asking prices. For everyone who wishes all sales to be open market, consider the lesson here. Lengthy market exposure always leads to pricing deterioration. Always.
I was happy to help a buyer contract on another lakefront this week, which brings that current market total inventory to just two. There’s some advertising occurring on the North Shore of Chicago that would suggest a certain large listing is about to return to market, so we’ll get to watch how the market reacts to more regurgitated inventory. I suspect new inventory of the original variety will find its way to market, but as of now it looks like slim pickings for buyers. There are some off market deals being considered, and some of those will ultimately come to the open market, but there is no great rush of 2024 summer inventory on its way. That’s why I decided early this year that 2024 was going to look a lot like 2023, though in this case we likely will not see that bump of spring inventory that we had last year. Then again, maybe that’s good, since pricing last spring was mostly wrong, as evidenced by the extreme discounts to final closing price from those misplaced spring 2023 ambitions.
If you’d like some help at the lake and would enjoy visibility into the on and off market opportunities, I’ll be here to help. Unfortunately, it’s looking like it’s going to be a rough summer for house hunters. If you’re a seller, I can’t imagine you could ask for a better circumstance to list into than the one we have right now.