The thing about real estate, the thing that we’ve discussed at great length, is that the valuations within a market are subjective, but the assessment of performance is not. This is why I can disagree with another agent when it comes to how egregious a particular list or print price may be, but I cannot argue with that agent if he says there were four sales on that street in the prior year. Likewise, if an agent says they’re number one, they should probably be number one. If they run an ad that says they were voted number one by two independent labs, and then the ad shows a picture of the agent with their two dogs, then they should immediately be banned from selling real estate, forever and ever. This is why if a new broker says they’re at the head of the class in the market, they should be at the head of the class in that market. They should be number one if they say they’re number one. Such liberal advertising claims might be something we’re going to have to get used to. We are, after all, just simple country folk, and so insulting our intelligence is just a nice way of telling us that we matter.
Anyway, about those statistics. The vacation home market at Lake Geneva is super crazy hot. Just look at the ads in the paper, the ads in the magazines, the social media. Hot, hot, hot. Had I been carefully reading the playbook, I would have known to capitalize all three of those h’s, but I haven’t subscribed to that book for years. The market is hot, the buyers motivated, the agents breathless. But this is just the marketing side of real estate, which cannot be confused with the statistical side of real estate, which, in turn, should never be confused with the fiction of ads. You might be able to subjectively claim you’re at the head of the class, but a market cannot subjectively proclaim itself hot, when it’s tepid at best.
The market has buyers today, plenty of them. But as I scan the MLS all day every day, I see particular pockets of activity surrounded by calm. The lake access market priced under $300k is absolutely on fire. That’s true, so if you read that in an ad this weekend, believe it. There are no fewer than seven lake access homes pending sale priced $310k or less. This is an active segment of the market, and if you’re contemplating such a simple vacation home purchase I would encourage you to gather your motivation and act on it. Interest rates are low, prices are stable, and the inventory is somewhat plentiful. The homes that follow that range, those from $310k all the way to $1.4MM, feature exactly two pending properties today. How does that strike you? Super, insanely busy? If I stand under a crystal chandelier with my name in titanic, sparkling letters, will you ignore the statistics and just buy something, please? What if I put a picture of a little girl on my ad, a little girl that’s quite obviously not anywhere near Lake Geneva, and I tell you that you should FaceTime me? Then will you think that two homes pending out of 70 is a performance worthy of a breathless pitch?
The two homes pending in that range include one in Country Club in the upper $400s, and one with a small pier in Glenwood Springs in the mid $700s. Both are fine properties and will be fine sales. There’s a large off-water home in Academy Estates pending for $1.475MM, which is fine, I guess. It’s a very nice house, a long ways from the water, with a slip. That’s not a market that I’d like anyone to bet on, but it is a market that exists in fits and starts and we can all agree that this sale is either a fit or a start. Probably a fit.
The lakefront market, on the heels of an active five year span, is only showing one pending sale. That sale is to a cherished buyer of mine, and that property is the simple lakefront at the end of Shadow Lane listed at $1.55MM. That’ll be a fun story to tell when it closes next month, but for now, it stands out as the only pending lakefront on the MLS. There are others pending, at least two that are off-market, and a third if you count the auction house in the upper $5MMs. Unlike the rest of the vacation home market, the lakefront market continues to lag in 2015 purely because there is not inventory that matches the position of the buyers. We have tremendous inventory over $4MM right now, but only a handful of buyers. We have a swarm of buyers in the $1.8MM to $3.5MM price range, but the inventory is aged or otherwise unimpressive to that buying group. Still, some of these homes will sell this year, that’s a fact that you can stand on, next to the giant letters that spell your name and under a huge crystal chandelier. It’s just that we’d sell a whole lot more lakefronts if we had some new inventory that was priced nicely in that $2-3MM range.
The entry level lakefront market is one that will yield value this summer. I expected entry level to rise this year, and I admit that my projection was wrong. Inventory can nullify any projection of price gain, and the entry level inventory has swelled to a point where we have five or six sellers competing for that entry level buyer. Buyers should pay attention to this jockeying, as some of these entry level offerings are going to sell in the $1.1-$1.25MM range. Those will be solid value propositions in that range, and I do wish that any lakefront buyer seeking an affordable waterfront option would contact me quick-ish. Until then, I’ll be standing here next to this huge chandelier, or maybe I’ll be leaning up against giant gilded letters that spell my name, either way. I’ll be here.
Above, my incredible lake access home in Lake Geneva listed at $995,000. Buyers with tremendous style only, please.