Now that Drew Brees and Tracy Porter have restored some Big Ten pride to the NFL world, we can get down to the business of another spring buying season at Lake Geneva. What this spring buying season is going to look like, I obviously can’t be entirely sure of, but the market could be in for a nice first quarter if buyers find a little pocketful of motivation. Buyers have been active in January, which should be a great sign for the market as we move into the prime buying months of February, March, and April. These months are historically strong months in our resort market because many buyers realize that summers are short, and they’re not unlimited. The classic, we’ll wait till next year approach only works when discussing Cubs baseball and Congressional majorities, and there remain many buyers overtly aware of the value of a Lake Geneva summer.
The market should be adding a plethora of inventory over the next three weeks, positioning buyers who are aware of their limited lifespan squarely in front of some quality housing options. What remains to be seen is the direction that sellers will take when pricing their properties. Sellers classically receive a jolt of optimism, however at times unfounded, when the calendar turns from February to March, and that optimism can be to the detriment of the market if buyers don’t agree with the pricing. Then again, buyers seem to disagree with most pricing now, so it’s a good idea to just negotiate as best as possible to secure a Lake Geneva retreat that will not only bring your family and future generations together, it just might clear up that tendinitis in your knee. What? I said “might”.
While I am seeing a solid improvement in our inventory, much of the added inventory remains overpriced. No matter how cheap a property may be, buyers tend to think everything is overpriced these days, putting little impetus on the sellers to list at attractive prices. For example, a seller might have a property worth $1MM. It would be a screaming great deal at $850k, but it was worth $1.3MM a couple years ago. The seller correctly surmises that if the property is priced at $899k, which is an attractive price, most buyers will want to buy the property for 10% – 20% off their asking price. If the seller prices the property at $1.1MM, the buyers will still want to buy it for 20% or more off ask. In other words, there is no motivation for a seller to price their property extremely low, because buyers are failing to recognize what represents value and what doesn’t. The list prices in this market have always proven to be high, even as the market has softened, as sellers are reticent to list low, knowing that buyers are going to try to negotiate them down no matter how attractive and realistic their list price may be. Make sense? I know, my head hurts now too.
Buyers, huddle up. February is a great transition month for you to be active in. Inventory will swell, yet there is still lingering seller apathy that can dissipate as we inch closer to summer. You have the ability to purchase a vacation home in the spring, allow a month for cleaning, tweaking, and furnishing, and by the time Memorial Day weekend rolls around, you can entertain at your vacation home here and take pity on your friends who are trapped at their suburban manse’s, pretending their weekend doesn’t need a heaping dose of Lake Geneva.
Sellers, here’s your charge. Don’t be stupid in this marketplace. If a buyer comes to you with a fair offer, be realistic. Your property isn’t worth $1MM just because your neighbors house sold for $1MM in 2007. In fact, your neighbors sale might be the greatest proof that your property is now worth no where near $1MM. I don’t care if your yard is 10′ deeper and your garage door opener has an extra half horse of opening power, and neither does a 2010 style buyer. They want your price to be reflective of the times, so it’s best to stop fighting it and get with the program.
Me? Well, I’ll be hanging out in Lake Geneva. Lamenting the snow and ice, dreaming up ways I’m going to spend my summer afternoons, wishing more of you would feel the same pull towards the water that I do. I’ll be listing plenty of properties this month, and if buyers find that motivation that they’ve been lacking for the better part of 3 years, I’ll be selling plenty of properties too. The same buyers who used the classic fall excuse of “why should I buy in the winter and pay to carry a house all winter when I won’t be using the home that much”, should now be wary of the logic behind their own excuses. If buying a home in the winter doesn’t make sense, certainly that means buying a home in the spring does. See you at the lake.