As further proof of the rock solid fact that many consumers are more loyal to their hair dressers than they are to their Realtors, there was a lakefront sale this week to discuss. We all know the lakefront market is quite active. Of buyers in the market today there are three different sorts. There are the immediately motivated, those new to the game who look at something and then buy it quickly, based possibly out of a misunderstanding of the market, or based on an enthusiastic push by whichever Realtor du jour they are riding along with. Then there are the long time lookers, those forever wallowing in discontent over the inventory, the prices, or the mixture of the two. And then there are the buyers that are slowly, methodically, smartly studying the market, working on their market grip so when the right opportunity presents itself they can act with feisty precision. For those buyers, it’s important to note that they should be visiting the market often, touring properties (with me), learning about the market. You can study the market from afar, which is as effective as learning to fly an airplane by reading the manual, without actually gripping the throttle and taking flight.
The second type of buyer usually does end up buying real estate here, though generally only after several false starts. That’s the story with the sale from this week on Circle Parkway, and for every market cheerleader who supposes that the market is as torrid as the sales make it look, there should be some pause. The entry level lakefront was listed for $1.4MM. It was a nice enough little home, with some updating done and some more still needed. The home had an offer on it very quickly, and then that deal feel through for whatever was the given reason even though it always proves to be buyer remorse. Then a new offer, a new contract, and a closing this week at $1.2MM. The $1.2MM number is a fair one, and while it isn’t market beating in any sense, it does prove that the entry level market for homes with 50ish feet of frontage and cliff like locations is still stuck around the $1.2-$1.3MM range.
Small parcels can buck this price constraint, but that’s only if the home is either spectacular in some way, or the frontage isn’t cliff like, and the home isn’t mostly lame. As this home was smallish, and the lot was small with high frontage, the $1.2MM number is about the right range. If your agent has been pushing you higher and higher, telling you that the market is appreciating rapidly, then you must reconsider this advice. Sure some properties are appreciating, but not all of them. This sale is all the proof you need if you’re contemplating the entry level market and what price point is sufficient for a small home on a small lot.
There are other lakefront homes pending today. A lakefront in Geneva Bay Estates, one that I had an offer on earlier this year on behalf of a buyer, priced at $2.1MM. There’s another deal pending on the hill in the Birches, a sale that I’ve already taken swing at, priced at $2.15MM. There’s a pending sale in Fontana priced at $2.995MM, another listing that I had an offer on a year ago this month. There’s probably another deal or two circulating now, but that’s what the MLS has to tell us for today. There are deals out there, and for some reason those deals are being overlooked. I’ve pushed these deals on certain buyers of mine, and no one seems to be biting for one reason or many others.
Inventory shouldn’t build in December, so we won’t expect it to. January, however, is an entirely different story. The goal now is for buyers to ready themselves for the coming inventory, that inventory that will show itself in January- either early or late. I’m betting the inventory builds early this year, as the market is begging for new inventory and those sellers that present themselves to the market early are the ones that will likely be rewarded. Prices will be higher for these January listings, but sadly all it takes is one motivated buyer to jump in and ruin the calm for the rest of us. This will happen in January, barring any stock market meltdown that doesn’t appear to be likely.
That’s the market, and here’s your weekend. Gage Marine is hosting the 2013 Freeze For Life at their lakefront restaurant Pier 290. It’ll be a fun event to watch, especially given the forecast for tomorrow. If there is irony in dying from freezing for life, I’m sure we’ll recognize it. Fatalities or not, it’s a fun event and Pier 290 is a perfect venue for it. The event happens from 10 am through 3 pm Saturday, December 7th, and if you’re going to be in town you should plan on attending. If you’re not planning on being in town you should probably recognize the error of your ways and correct that plan before it becomes too late.
Later on Saturday Lake Geneva has their annual Christmas Parade. It’s called the Electric Christmas Parade, possibly because the floats are lit, but if they weren’t lit then a nighttime parade would be awfully redundant. Did you see the float by so and so, they’d say. No, we’d say, because it’s dark and the float wasn’t lit. That parade will feature my beautiful daughter aboard the Faith Christian School float, which likely won’t be the best looking float in the parade, so don’t set your expectations too high. The parade is at 5 pm, on Broad and Main Streets, though it’s best to hide out in Caribou Coffee (it’s still Caribou), and then jump outside quickly when the floats start their processional. It will be cold tomorrow, so dress appropriately.
I’ll be at both events on Saturday, so if you’d like to look at vacation homes either before those events or during them, or after they end, I’m your man. See you at the lake.