It is mostly true that for every home there is a buyer. There are buyers for the worst of homes. There are buyers for the best of homes. There are buyers for homes on highways and for homes that flooded a few years ago and will flood again in a few more. There are buyers for homes built on fault lines, there are buyers for homes on the sides of active volcanos. Most of these sorts of homes do not have any particular key attraction, but they sell anyway. The opposite sort of home is one that hits on so many levels of perfection that it has no choice but to sell. This sort of home sells because it must, because it’s too unique and too special to otherwise be ignored. This is why I sold my listing at 1606 West Main Street last Friday, and this is why the buyer who paid $940k for the gem of a house should be pleased with her purchase.
This sale is just the latest on a laundry list of vacation home activity. The market is hot, and that really does apply to the broad Lake Geneva vacation home market right now, and not just a particular segment. The only possibly exception to that statement is the market segment that should be the hottest- the entry level lake access market. There are just three homes (per MLS) under contract priced below $400k at the moment. That’s odd, because interest rates are low and that segment should be the most sensitive to those rates. If you’re a buyer for something in that price range and you just read those sentences, consider this a nice reminder to act on your interest (call me before acting).
There are contracts pending in the $500-$700k range that include a cottage in the Lake Geneva Club, a fanciful house in Country Club Estates, and a modest ranch in Geneva Manor. There’s one other off water home pending sale in Knollwood, but that’s pending at $2.2MM so let’s not talk much about that. That’s an off-water home. Without a slip. But it’s beautiful and overbuilt, which will always attract attention. I have a contract pending on my listing in Abbey Springs ($765k), and there is a contract pending on a Fontana Shores condo listed at $349k. The lakefront condo market is still soft, but there should be some fall buyers that take advantage of that overall weakness. I still have a beautiful four bedroom condo at Vista Del Lago for sale, now reduced to $569k, and a two bedroom penthouse unit at the Fontana Club listed for $489k. Both of those condominiums had offers on them in the past few weeks, but neither deal came together. I’d love to sell those this year, and can promise a buyer that they will be finding value in either property.
While the gyrations of the broad vacation home market matter, the real spectacle right now is on the lakefront. The lakefront market is ripping, and though inventory is approaching all time highs, buyers are keeping up with the supply. There are no fewer than seven lakefront homes pending sale at the moment. That’s impressive, and though the only listing of mine on that list is the South Shore Club home on Forest Rest ($1.649MM), I like the activity anyway. There’s a listing in the Loch Vista Club pending with a $2.45MM ask. There’s home on Main Street in Lake Geneva pending at a $2.175MM ask. The good news about that listing is that I have a better home for sale right next door, and mine is listed at $2.375MM, so it should be deserving of your attention. A listing on Birch Walnut in Williams Bay that first came to market at a laughable $3.5MM ask is now down to $2.499MM and recently received an acceptable offer. There’s an entry level lakefront in Geneva Manor listed at $1.75MM with a new contract as well.
The small, curious listing on Outing in Williams Bay is under contract at a high $800k ask. This will look cheap to the market when it prints in the $800k range, but it’s a market price that makes complete sense. Yes, it’s lakefront in the 800s, which is good, but that’s all this house was worth. There are some big contracts pending on a listing in Fontana in the low $5s, and another fresh contract on a Basswood listing just under $5MM. This is significant activity, and I see in the current inventory at least 7 or 8 more lakefront deals that will be printed yet in 2015. If the pending contracts all close, and if my prediction for additional deals ends up being accurate (which it will), we’ll add 14 or so closings to the 12 deals that have already closed in 2015, making this year a record year in terms of volume. That’s a good thing, but it’s also leading some buyers to falsely believe there’s some bubble forming.
It is true that I don’t love every deal that closes. Some are bad deals. Some are overpriced. Some just make me sad. But most of these deals make sense, and the pricing is still largely under 2008 peak valuations. The best way to avoid purchasing a bubbly home in this market is to work with me. I don’t let my buyers purchase outliers, and we’ll be sure to make smart market decisions even in a hyper market. Remember the post from last week about the reductions, because while this activity is impressive, the sellers who aren’t receiving contracts are going to do everything they can to get the attention of the fall buyers. If this were Beverly Hills we’d be throwing champaign open houses with red carpets that we rented from the flooring store in town. But this is Lake Geneva, and we’re not that gullible, so we’ll just reduce our prices to attract interest, and if you’re a buyer on the hunt, I’m the best guide you could hire.
Above, my listing on Constance. It’s really a great house.