So what exactly happens now? Well, that depends. The Lake Geneva vacation home market will continue to move, but the steady pace of fall will, or has, given way to a period of mostly rest. This is why I go on vacation in December. This is why I love December. In December, I have little to do. But that isn’t entirely true, as I’m working, each day and every day, but that work isn’t as productive as it might be at a different point in our calendar. December is a month for buying real estate, but the buyers who would be buying tend to be preoccupied with other things, even if this month might yield them the best overall value. You can’t blame them, really. To buy in December is not nearly as fun as to buy in May, but either way June still finds you on a white pier.
Over recent weeks there has been activity at Lake Geneva. The large lakefront estate on Fontana’s southern shore- the one I told you about when it was listed and promised you that it would sell swiftly- has indeed gone under contract. This was a most rare offering. An estate with 150+ feet of mostly level frontage is rare enough, but when you place it in Fontana on the south shore, and nestle it into a stretch of homes where value can easily exceed $6MM, then you’ve found something rare indeed. I wrote an offer on this, and if my offer experience on behalf of a valued client is any indication, we can expect this property to sell for a price that very closely reflects the asking price of $2.995MM.
It is interesting to note that this property was listed at a price that reflects what I believe to be as much as a 30% discount over previous valuations. This is unique in the market because of properties like the one on Basswood listed at $3.4MM. If you were to argue that this property too was once valued at nearly 30% higher, I would argue with you. And after some arguing we would pause and you would agree that I am right and you are wrong. Basswood would probably have been at $3.4MM in 2007 just as it is in a very old 2011. South Lakeshore on the other hand would indeed have been valued in the $4MMs back at our peak, and the discount from then to know even as other like properties have held somewhat firm either reveals a major shift in the market or proves what a great and tremendous value 1028 South Lakeshore really was.
The two lakefront homes that I have long expected to sell remain unsold. I do not like being made to look foolish in the market, but Lake Geneva has a tendency to do that. Properties that have no business selling sell, and properties that are primed to sell sit unnoticed. These are both properties in the entry level range, and I expect them both to sell, on an ideal buyer whim, at sub $1.4MM prices. As with all entry level lakefront properties, each and every one that sells is one fewer that exists in total on the ring of dirt that surrounds our beloved waters. This is true mostly because buyers in this segment do not buy and hold, keeping the property as is. Instead they buy and improve, through renovation or demolition, and when the final cleaning on that renovation is completed and the model schooner is placed above the mantle, then that property becomes something different. It becomes something more valuable and it fills a different role in our broader lakefront market. At that time it is no longer an entry level offering that might sell in the $1.3MM range to an opportunistic buyer, it becomes a valued property that may someday sell, but likely for valuations far out of the reach of the average entry level lakefront seeker.
So what exactly do we do now? Well, if you’re me, you work to make sure business will be flowing in mid to late January. The spring market begins in earnest sometime in early February, understanding that this momentum will be either furthered or stalled by an abundance or lack of wintry weather. Inventory that has shed from the market this month will return at the end of the next, and when it returns buyers should rejoice. What will happen now is simple. The market will sit relatively idle. Buyers will forget of their buying ways for now, and sellers will indulge in extra glasses of fermented beverage in a futile attempt at forgetting the property that they wish to sell but haven’t. And sometime after the Badgers win the Rose Bowl, and later than when the Packers likely win the Super Bowl (I say that as a crestfallen Bears fan, but I have matured to the point where I can and will root on the home state team once my favored team has fallen prey to a broken right thumb), after those things happen we will be in full swing once again. Until then, we wait. We watch. And when we see what it is we’ve been looking for we act. After all, a Lake Geneva summer is many things, but it is not willing to wait on the unprepared.