It’s sad when it’s only the 22nd day of the new year and one of my most important predictions has already been proven untrue. The lakefront inventory, I supposed, would be growing by now. In fact, I figured it would have increased earlier than normal, perhaps the first and second week of January rather than the first or second week of February as may be more normal. I thought this inventory would come to market, and that it would come at a premium, but instead, it hasn’t shown up at all. The lakefront inventory is low, and with some new sales, it’s getting lower.
There has been some new inventory to the lakefront market, but this is regurgitated inventory left over from last year. I feared some of it would come back at the same, or higher prices, but I have been pleased to see most of it come on at prices below the failed 2013 ask. The does my soul well, as there is still some decency left in the game of lakefront pricing. While the inventory hasn’t yet arrived, sales are occurring anyway, which may be good news for buyers as existing, aged inventory can create value in a way that brand new, and therefore exciting inventory, cannot.
I have been incredibly blessed in this young year, and have three lakefront sales pending at this moment. I have a deal on the 5.5 acres on Black Point, asking price $2.475MM. I have a deal on the tremendous lakefront on Oak Birch listed at $2.15MM, as that’s one that I’ve been watching closely as a possible value play. As of last week I have a deal on my 1599 Lakeside Lane in the South Shore Club, a property that found a buyer after a substantial price drop of $400k to $1.895MM. Those three lakefront deals of mine are joined by one lakefront condo sale as well. My Eastbank listing is under contract to a delightful buyer of mine at a great value price. It’s been a good month to be a lakefront buyer, on the single family and condominium side.
There are other properties pending on the lakefront as well. The leftover contract from the Birches is still pending sale at $2.15MM, as is a property that I honestly never expected to see sell anywhere near its asking price. The home to the East of the Highlands listed at $2.875MM is one that I figured needed to be closer to $2MM to have a shot at selling, but here it is, pending and waiting for a sale. That proves a very important point that I need continual reminding of- just because I don’t see particular value in a property doesn’t mean that the world sees it the same way. Add those two pending sales back to my three sales, and we have the makings for a very high volume first quarter of the year, in spite of inventory that hasn’t need been added to.
The lake access market has been active too, with four pending sales under $300k. There have been five lake access sales so far in these first three weeks of 2014, all of left over contracts from 2013. The Geneva Oaks REO that I mentioned in my 2013 Foreclosure Review has gone under contract after it came back to market with a $799k asking price. I’m not a fan of that sale near that level, but once again, I’m not the buyer so my opinion isn’t all that important. It’s good to see that property sell, as REO’s that linger on the market create lots of drag.
I continue to expect new lakefront inventory, and that remains the key to pushing our 2014 volume higher. If sellers have their way, inventory will remain low, which will mean prices have to tighten more than they might otherwise. If buyers have their way, inventory will increase, and that new inventory will be priced somewhat in line with 2013 valuations. Expect a slight premium on new inventory, and then expect buyers to pay that premium. If this inventory is to come to market, it will likely do so over the next 30 days. If you’re a buyer waiting for something new and fresh, best let me know. New inventory that initially looks great to the eager eye doesn’t mean it is.