Lake Geneva Market Update

I like to make comparisons. For example, I compare our lake to other lakes. This is no comparison, really, but to say it’s no comparison is to utter a figure of speech, which still leaves the no-comparison as a comparison. I also like to compare years, like comparing this one to one in 1997 when I was a young punk Realtor and I didn’t need to think about losing weight. I didn’t complain about $16 for my kids’ rollerskating class at school. Those were the days, but these days are probably better. I like to compare less distant years as well, like last year to this year. Let’s do that, because last year matters to you and what I thought about in 1997 doesn’t.

1014 South Lakeshore, Fontana

Last year, we sold a lot of lakefront and lake access homes. I, personally, sold more here than anyone else. I’m proud of that, but that’s last year and that year doesn’t matter to this year. That’s because this year the market is the same, but it’s very different. The macro drivers of our market remain in place, those being portfolio returns and low interest rates. Those are mostly the same. But today, on this date that’s creeping into late February, things feel quite different. Our market feels slow to me, even though there are plenty of buyers milling about. There seems to be a lack of conviction amongst the buyers, and I can’t say that at any time in the past five years I’ve had so many nonchalant lookers on my radar. Nonchalance is good when you’re browsing for cars, but not so great when you’re looking for rare real estate. If you keep your interest a secret, no one can help you. It’s like cancer- it’s best treated when some smart people know about it. But of course it’s actually nothing like cancer at all.

This blasé market isn’t necessarily the fault of the buyers. It would be easy to blame them, these buyers, but it’s not their fault at all. It’s not my fault either, even though my wife would insist that it is. The pause in the market is the fault of the inventory, or the lack thereof. Last year at this time, I had already sold three lakefront properties. I was riding high, and to ride so high so early in the year is a really good thing, at least I remember it that way. The reason I sold those lakefronts last spring is because there was both some aged inventory that was able to be gobbled up by some of my value-minded buyers, but also because there was a few bits of reasonably priced new inventory that hit the market and sold. This spring, there is no such new inventory. There is little aged inventory that looks appealing, there is, instead, just some inventory and some buyers, and none seem too pleased with the other.

Last winter, it was cold. It’s cold today, but this cold is unlike that cold. Last winter, for those who have forgotten, was either -20 or it was snowing. Many times it did both, which is to defy the very concept of a winter high pressure system. It was miserable in these regards, yet the buyers bought. The S&P spent most of last January hovering hear 1800, and it’s 2100 today. Interest rates were higher last year at this time. Everything- the weather, the returns, the rates- they’re all better this year. Yet for all of that influence, there’s very little motivation present. Prices are being held up in most cases, by sellers who have plenty of staying power, and buyers aren’t impressed. Some properties are falling in price, moving quickly to try to spur on market activity, and there is no better example of that than my listing on Forest Hill in the South Shore Club. It’s now priced at $1.725MM, down in price considerably. It’s now ready to become the lowest priced SSC sale in the history of the SSC, even as the SSC gains momentum and overall pricing buoyancy. Go figure.

Speaking of the SSC, the market movement last spring (real spring, not real estate spring, i.e., April/May) was significant. I was selling lots like hotcakes, assuming you believe that I could sell hotcakes like crazy. This volume was great for the market, and it caught the eye of many would-be lakefront buyers. These buyers were also mostly unimpressed with lakefront inventory, so they went the way of the SSC and snagged what has turned out to be incredible value. With no SSC inventory to speak of, there is nothing that presents as blatant value, and that’s the problem. Buyers, even though everything is seemingly in their favor, aren’t excited by what it is we’re trying to sell them. This is why the market feels soft, because it is.

Consider that today there are three lakefront homes pending sale, but two of those three are involved in a property trade. That will look like volume to the market, but is, in fact, a neighborly property swap. The other sale is of a property that I’m not so keen on, and that buyer was in place in 2014. So where’s the new lakefront volume? Well, it doesn’t exist, and the precise reason it doesn’t exist is because the inventory, outside of the very upper bracket, is so poor. The good news is that I will be bringing a bit of new inventory to the market in the coming months, and I expect that inventory to be greeted with enthusiasm. I also have a few one party listings that might be available to sell, so if you’re a nonplussed lakefront buyer you’d do very well to contact me, but only if you want to know what’s going on in the market behind the scenes. If you like knowing about inventory around the same time the Zillow computers find out about it, you’d be better served working with someone else.

Above, my world class listing at 1014 South Lakeshore in Fontana.

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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