While I love to break down the individual segments of our market, and deliver that information direct to this blog for your reading pleasure, sometimes a broader approach is necessary. Today, I give you my take on the entire Lake Geneva real estate market. First things first, the second quarter 2009 Walworth County housing figures came out a couple of weeks ago. We far outsold the first quarter, but we’re still way, way, (way) below the 2007 volume highs. Something that is interesting to me is relating to the median home price for the entire county. I famously called out Crain’s when they tried to judge the Lake Geneva vacation home market by weighing Walworth County housing statistics, but in this particular case, the county numbers will work just fine. We reached our median high housing value in the second quarter of 2007. Since then, we’re slid a mere 15% based on the second quarter 09 stats. What is interesting to me, and what backs up something I’ve been saying for this entire year, is that our price and volume bottom was the first quarter of 2009. In three years, when we look back at the housing turmoil of the previous 6 years, I have little doubt that the market bottom that everyone was so looking forward to will have occured in the first quarter of 2009. Read this blog post so you can see that I never, ever lie to you on this site…
Back to the current market conditions. I think the market is gaining strength right now, although I still see plenty of softness in pricing. There are buyers active in all segments of our vacation home market, but for the most part they have one thing in common- they’re not going to pay retail. Now, they will pay retail if the find something in absolutely impeccable condition, and I’ve written often about a Lake Geneva buyer’s love of new and over improved construction. But something interesting is happening in this turn around- buyers are still not willing to pay much for scarcity. A listing in the Harvard Club had been on the market for several months, only to finally receive an acceptable contract just this month- after a $200k price reduction. There are listings in rare associations including the Congress Club and Club Unique, yet buyers seem unimpressed, and unwilling to pull the trigger until the prices soften further. What they might be miscalculating is the extent that prices may further soften, and that it is a better idea to just bid on the property to see how low the seller is willing to go at the current list price. This does create a problem because when real estate is held by capable individuals, pricing only softens as much as the seller is willing to let it. Vacation home markets are different, and when you have strength against strength, usually the one holding the keys is the winner. In the case of 2009, the sellers who are selling are those with beautiful properties at attractive prices, or those who are willing to adjust downward until they find a buyer. Chasing the market down is something I don’t recommend for my sellers, rather I’d prefer to get out in front of the pack and practice the art of the defensive sale, as I’ve done several times this year.
Overall, the market is picking up. I fully anticipate an active fall, and will report back to you at the end of the year with statistics to back that claim up. Several of our markets, like Abbey Springs, have seen complete volume recovery, while others, including the entry level lake access market priced up to $700k has only recently started to see that activity pick up. Whatever the case, there are deals to be had, and sellers who are willing to negotiate. For every great deal this market will give up this year, there are 5 overpriced sucker deals just sitting there waiting for you to drive by. Best align yourself with an agent who knows the difference, and I hope by now you know who that chubby guy is…