By now you know that Harold B. Smith’s estate, Aloha Lodge, is under contract. Find me a market in the Midwest that can sell homes over $30M that isn’t Lake Geneva. Go ahead, look. I know you won’t find one, but you can look. I was exceptionally disappointed that I wasn’t chosen to list this property, and now I’m even more disappointed that I didn’t bring in the buyer. Alas, I will soldier on, with the weight of this immense failure spread evenly over my 2023.
It’s summer at the lake and the contracts are relatively active. There is new inventory coming to market with some frequency, as I told you there would be. I have a contract on my vacant lakefront on the South Shore, and there is still a contract on The Echoes. A home in The Elgin Club is selling off market. A home in Clear Sky Lodge, just to the West of the original estate home, sold recently for $7.5M. Rumor says that home will be torn down. In 2016 I sold a beautiful home just a handful of doors East of this parcel, and at the time the $7.35M I achieved for that property was a very high sale in our market. Now homes on lesser lots sell for more money to be torn down. How the times have changed.
Speaking of changes, remember when I used to write about the preferred math on the lake? The idea was that $2M in dirt plus a $2M new build equaled a $5M property. That was quaint. Now the math is a home I sold in 2021 for $5.2M just sold for $9.5M, and on the street that I was once using to make $2 + $2 = $5.
I have a large off market deal pending at the moment, with a few off market lakefront pieces of inventory in the works. While some buyers are sitting this continued momentum out, assuming the current market is operating irrationally, it appears that most buyers remain engaged in the market even as pricing continues to press higher. An increase in equity accounts this year has given many buyers confidence in their summer purchase decisions, and I again expect the Lake Geneva market to perform well as long as the equity markets remain rangebound.
The off-water market is in the process of attempting to push pricing considerably higher and well outside of the historical range that would have previously defined the upper limits of the off-market lake access market. A sale off water in the 700 Club suggests buyers are now content to pay $2-5M to be off water. Attempted sales elsewhere around the lake show an off water market that has strength in that elevated price range. If you’ve been paying attention to this site, you’ll know that the off-water strength makes perfect sense given the relationship between this market and the entry level lakefront market. If it’ll take $3-4M to find entry level lakefront now, why shouldn’t a high caliber off-water home in that same price range find a bid?
The Lake Geneva vacation home market is evolving at a pace that I haven’t seen before, and the combination of off-market deals with on market attempts has created a rather confusing situation at the lake. Fortunately, I’m here to give you insight into all varieties of transactions and all varieties of inventory. Not all off market transactions are reflective of repeatable open market value, and there are times that means the sales price was a win for the seller and others when it’s a win for the buyer. If you’re trying to understand this market and would like a little help, consider me at your service.