Blog : Geneva National

Countdown
David Curry

Countdown

It’s spring break, and everyone is gone. To the mountains. To the beach. To a different place with its own brand of monotony. In the mountains, it’s snowing again. Powder Day, the flat-brimming locals shout. But it’s more of a lazy shout, if there is such a thing. On the beach, more shells. Here’s one that looks like my dog, says some old lady, as she tucks it into her sack full of other shells that also look like her dog. It’s another place this week for many, a break from the monotony of our early spring, to enjoy the monotony of another place.

But while everyone is playing and traveling, I know that there’s something serious on the horizon. Memorial Day Weekend. It’s nine weeks from this Friday. It’s not going to be a normal Friday, that’s for sure. It’ll be you, your office, your co-workers, and there will be a decidedly pronounced difference in attitudes on that day. Some will have an energy, a desire, optimism. Others will behave the same way they did the week before and the week before. For some, that Friday matters. For others, it means only the turning of a calendar, from one season to another, unofficially.

The decision whether or not that Friday matters is yours, and yours alone. The market today is humming with activity, and while I particularly enjoy the activity on the lakefront, each segment of our market is bustling. There is no segment left behind this spring, each price range and housing category finding buyers and fielding offers. You needn’t be robustly rich to enjoy a weekend at the lake. So long as a $90k condo in Geneva National is in your range, you’re in play.

There are pending sales throughout our market, no matter if it’s a $198k cottage in Country Club Estates, or a lakefront estate on the North Shore of Fontana for $7.395MM. The best news for our spring market is that inventory is increasing, albeit slowly. New inventory in any category is a positive, as this market features considerable in-trading amongst vacation home owners. A new lakefront for $3.5MM is good, because it very well may free up a new listing of a $700k cottage with a boatslip. That boat slip property will be great to list, because an owner of a condo at Vista Del Lago might be looking to switch over to a single family vacation home. Any inventory is good inventory, as it lubricates the gears that churn this market forward.

For now, you have a decision to make. If you’re sitting in your office thinking about summer, this is fine. But if those summer thoughts lead you only to a Saturday rooftop dinner and a Sunday morning brunch line, then you’re not thinking as clearly as I had hoped. Dream of summer. Dream of that Friday, nine weeks from this one, but make the decision to make this summer different. I’m here to help, if only you’ll let me.

Above, the divine porch at 434 Oakwood in Fontana. Just sold last week for $1,150,000.

Geneva National 2018 Market Year In Review
David Curry

Geneva National 2018 Market Year In Review

There are few market segments that I find as curious as Geneva National. Under no other particular context does one association make up its own market segment, but here we are, knocking at these gates. The fact that this large association functions as its own market is something that vexes those who live and play there. Why can’t a buyer just be on the hunt for a Lake Geneva area condominium priced under $500k?  Why must a buyer seek out Geneva National specifically if they wish to buy one of those condominiums? Why does a homebuyer who purchases a vinyl corn-field tudor for $500k neglect to first consider his options inside Geneva National? Does that buyer know that Geneva National is nicer, and objectively better?

For the year just ended there were 81 total MLS sales. Those sales ranged from small condominiums priced under $100k, to beautiful newer homes priced over $1MM (two sold over $1MM last year). As we sit just inside the parameters of 2019, there are only 36 available homes and condominiums (ten more properties are under contract),    including two properties listed incorrectly in the MLS as single family homes (these are technically all condominiums). The fact that an agent listed two homes as single family might be a sloppy mistake, or it might just drive home the point I made in the opening paragraph. If you want to sell Geneva National’s single family homes, are you better off pretending they’re not inside Geneva National?

I think the answer is no. Or at least it should be no. Geneva National is back, and it really is better than ever. Sure, there are still homeowners residing inside these brick and cedar behemoths that were built prior to 2006, those with dated finishes that the owners don’t think are dated. Sure, there are still lots that can be bought for the price of a high mileage used Corolla. But the market has mended, and the volume from 2018 is a sure sign that things are back to stable. While I enjoy seeing lots of sub-$200k volume, the true measure of Geneva National is in how it deals with its expensive inventory. Continued high volume years would be nice, but that’s not necessary to continue the momentum that GN has successfully built over recent years.

Over the last six years, Geneva National has averaged 2 sales over $700k each year. 2017 printed just one sale at that level. 2018 closed four sales over $700k, and that might be as good of a sign as any for this embattled association. Sell the higher end inventory and you’ll give buyers confidence to move up in price. You’ll give vacant land buyers confidence that their new build makes some market sense. And you’ll give current owners confidence to update those awful 2003 bathrooms. Broad market activity is terrific, but the real positive out of Geneva National in 2018 was an increase in upper bracket liquidity.

To understand how far Geneva National has come, you need only look back to 2012. That year was likely the bottom of the last market cycle, and during that dark year Geneva National closed just 35 single family and condominium properties.  For each of the last two years, GN has closed over 80 such properties. Current inventory is low, but there are several high dollar properties on the market today that will test the continued momentum of this large association.  Will buyers at the high end appreciate the country club atmosphere, complete with new pools and tennis, to such a degree that they’ll provide liquidity over $1MM? Or will those higher value buyers continue to opt for the lakeside lifestyle that the Lake Geneva lakefront and lake access market provides?  Only time will tell, but if I was a betting man, I wouldn’t bet against Geneva National in 2019.

Abbey Springs Market Update
David Curry

Abbey Springs Market Update

There’s a simple thought relating to markets like ours that supposes a specific pricing segment should prove active in different market segments. The theory would say that if $300-500k condos are selling, then those condos should be selling whether they’re on Geneva Lake, in Geneva National, or Abbey Springs. In the same way, if a $400k lake access home in Loch Vista Club is in demand, then a $400k lake access home in Cedar Point Park should also find an audience. The theory isn’t very difficult to understand, but markets don’t always behave in the most obvious ways.

Consider the lake access market on Geneva Lake right now. There are 34 active homes priced under $700k. Of those 34, no fewer than 12 are pending sale. That’s a very active market segment, with offers flying and summer contracts set to close next month. If that market is supremely busy with buyers seeking a reasonably priced vacation home experience, then the other specific vacation home segments in a similar price range should be similarly active, right?

Abbey Springs currently has 19 available condominiums and single family homes. Of those 19, the MLS shows not a single pending contract. Year To Date, Abbey Springs has closed 18 condos/homes, which isn’t awful, but it certainly pales to the 24 such sales for 2017 YTD. If there weren’t inventory, I’d understand the difference in activity, but there is inventory, even if it is a bit light.

In the same way, Geneva National has 57 available condominiums and homes priced under $700k. Of those 59, twelve are pending sale. That’s a decent amount of activity, especially for Geneva National, which has had its fair share of ups and downs over its lifespan. If the lake access market has approximately 35% of its under $700k inventory under contract, and Geneva National has 20% of its under $700k inventory under contract, then what’s eating Abbey Springs?

The answer, likely, is nothing. It’s just the unique nature of the Lake Geneva vacation home market.  That’s why I write this blog as often as I do. Markets here hinge on such low overall volume that a good weekend can right any listing ship. If there were three or four new contracts written in Abbey Springs last week that have yet to show in the MLS, just like that we’d see Abbey Springs marching in lockstep with the remainder of the vacation home segment.  If you’re trying to figure out the exact rhythm of sales at the lake, don’t.

Lake Geneva Condotel Update
David Curry

Lake Geneva Condotel Update

At this point, we should have all learned a few things. If we were paying attention during the last market cycle, from slow rise to raging boom to crushing collapse, then we should have taken some things away from that decade long episode. In the same way, from that collapse to the nascent recovery to this now active and vibrant seller’s market, this should be teaching us something as well. I suppose in that there is a difference. Have we learned anything or have we just observed it all from afar?

What I’ve learned, mostly, is that housing markets do not rise and fall based on the math of it all. Sure, low interest rates and stable stock markets might kick off a resurgence of housing haste, but that isn’t what propels a market. What pushes a market from Tidy Recovery to Raging Bull is confidence. Confidence is what makes a family of 4 making $90k annually purchase a new vinyl box in a cornfield for $410k. This is the same thing that makes the same family drive to the car dealer and sign for a 0% loan on a $70k Tahoe. Interest rates and unemployment figures are sweet, but what pushes a market into hyperdrive is nothing more than individual consumer confidence.

Most of the things that happened during the last cycle are happening in this one as well. FHA loans are way up. Like sky-high, as a percentage of new loans. These are US Taxpayer backed mortgages that are given out with very little money down. When a market is appreciating, these mortgages are fine. But when the market stalls and reverses, these homeowners who were given those house keys with as little as 3.5% down will be the first ones to run for the hills. But if we continue our learning from the last cycle, then we shouldn’t panic sell our house unless circumstances (job loss, illness, etc), mandate it. If you bought a house in 2008, then 2012 was a difficult time to consider your negative equity. But if you’ve hung on into 2018 you’ve more than likely made a full and complete equity recovery. That, and you’ve had a place to live for the past decade.

But these are not market specific lessons. For those, let’s turn to the Lake Geneva condotel market. Condotel is a silly way of describing the sort of housing unit that is sold as a condominium, but operates like a hotel room. You buy the unit, you pay taxes and dues and extraordinary fees to the hotel, and they give you a percentage of the rental income generated. In theory, it’s a tidy idea. In practice, it can be either great, reasonably acceptable, or downright horrible.

The Lake Geneva market has a handful of these so-called condotels. Notably at the Grand Geneva (Timber Ridge),  The Cove, The Bella Vista, The Abbey Resort, and a few others.  Understanding the context that our broad market is hotter than a pistol, let’s consider the current market for these sorts of properties. I won’t delve into each development, but I’ll sample a few to give you an idea as to how I feel about them as an “investment”.  Crud, those quotes likely gave me away already.

Timber Ridge is at the Grand Geneva. It’s a waterpark. It’s nice enough. There used to be a rib joint inside the waterpark hotel, but I haven’t been there since my kids were last invited to a birthday party there. Today there are nine units available at Timber Ridge priced from $99k to $189k. None are pending sale.  Normally someone dissecting a condotel market would look at the net income and compare that with the purchase price. Not me. I don’t care if the units print 3% or 5% or 7% annual return on the most recent run of numbers. That’s because that’s not the issue with these sorts of units.

I care about the value of the real estate. Let’s look at the $99k unit. First sold by the developer in 2001 for $160,400. Nice. Then sold once or twice. Then sold in 2003 for $206k to the current owners. After 15 years, their investment has declined more than 50%. Another unit listed at $102k sold previously for $181k. Another unit listed at $189k previously sold for $305k. And the beat goes on.  Rather than view these units as an opportunity that the market has beaten up, I prefer to view them as a painful lesson of what happens when consumer sentiment shifts. Take away the free steak dinner and boat cruise; would anyone ever buy a timeshare again?

Let’s check on the Cove in downtown Lake Geneva, the place with that absurd blue roof. A little unit for sale for $109k. Prior sale? A 2008 print at $170k. Here’s another unit listed at $134,900. Initial sale by the developer in 1996: $135,400. 22 years, negative equity.  Let’s move to Fontana, and check on what is likely the best of this bunch, the Abbey Hotel. Here’s a unit listed at $150k. Prior sales price? 12 years ago for $254k.

It’s not that I enjoy beating up on a particular market segment, it’s just that I don’t know as though I’d be a buyer of something like this. Yes, they might turn a small profit on an annual basis. But what of the initial investment? What about that crushing loss?  These properties are relatively illiquid, intensely sensitive to overall market conditions, and reliant on a consumer that just might have learned their lesson.

If you’re a buyer searching for an economical condo that you can rent out to generate some income, I’d opt for the lower priced condominium units in non condotel properties. I’d look at lower priced listings in Geneva National, Abbey Springs, and the Abbey Villas. I’d consider those options 99 times before I’d consider anything else. If you’re in the market for this sort of thing, email me and I’ll set you up with my assistant Vicki who can help guide you through this particular market segment.

 

 

Geneva National Vs. The World
David Curry

Geneva National Vs. The World

If you think the vacation home market at the lake is active, you should check out the market for sub-$350k single family and condominium residences that lack lake access. That market is absolutely on fire. A recent search I performed showed 23 single family homes in Williams Bay priced between $310k and $400k. Of those 23, 15 were pending sale. That’s a hot market. Similarly so, the vacation home segment under $400k is also active, and that activity isn’t only involving properties with lake access. There’s an entire subset of vacation homes here, those condominiums that lack dedicated water access but still, often, appeal to a vacation home buyer.

Condominiums, wherever they are found, lend themselves to vacation home ownership for pure ease of ownership, and as a result, the off-water, non-access condominium market in Walworth County is a common target for vacation home seekers who find themselves with a fixed budget. Many of these buyers find their way to Abbey Springs, where they receive lake access, or to other condominiums like Willabay Shores in Williams Bay or the Abbey Villas in Fontana. It’s obvious, too, that these buyers end up in Geneva National. But increasingly I’m finding it annoying that Geneva National is overlooked by so many in this sub-$300k price range.

As I don’t often work this market, you’ll know my annoyance is genuine, as I’m not stumbling into this condition simply because it doesn’t serve my purpose. Geneva National might offer solid value and a rare setting, but as budget minded buyers know, it also offers a hefty monthly association fee. Often lakefront condominiums on Geneva will have elevated fees, but that’s an understood situation given the piers and pools and increased amenities. Geneva National has high fees, and while it offers justifiable amenities, many buyers will look directly past GN based solely on those monthlies. I think this is a mistake.

Let’s consider a random Geneva National condominium and contrast it to competing inventory in the broad market. For our purpose today, we’re going to look at a Highlands unit listed around $220k. This unit is a three bedroom, three bath, with a two car attached garage, three levels of finished space and a walkout lower level. The unit is a bit dated at this point, but who isn’t? The tax bill is around $3500 with monthly association fees of $590. That fee covers exterior maintenance, pools, tennis court, gated security, private roads, etc and etc. It’s a nice condo for the money.

If we’re a buyer of a three bedroom condominium in the Lake Geneva area, another reasonable option would be a unit listed for sale on the East end of the City of Lake Geneva listed at $290k. This is a four bedroom unit with slightly more square footage, but a two car garage and a one less full bath. To be certain, this is also a nice unit, and any buyer on a budget would likely find living here to be pleasant. The condo fees are $235, the taxes $4200.  The fee covers exterior maintenance. And exterior maintenance. There’s nothing else for it to cover.

The sort of buyer that might be drawn to the city condo would likely find the low monthly fees to be an important data point. Those fees might be the same reason they avoided Geneva National. But let’s really consider those fees. The GN fees allow use of a resort community with pools, tennis, walking trails, gated security, and more. The fees at the other development cover simple exterior maintenance. There’s no resort there. No other value added amenities. Just a condo that lists access to the highway as an amenity. These may seem like similar units, but they are not, as a matter of fact, even remotely the same.

But that’s just the lifestyle difference, and that’s where Geneva National shines, so let’s go back and look at those monthly fees. To own in Geneva National, versus our fill-in-competition, it’ll cost an extra $4260 per year. Ouch, that’s rough. That’s why people avoid GN. But let’s dig a bit more. The taxes at GN are $700 cheaper, owing that to a Town of Geneva tax scale, rather than the City of Lake Geneva. Now our annual premium is down to $3560. The fee in Geneva National covers water and sewer charges, which the other condo adds in separately (according to the MLS listing). It’s fair to assume the annual water/sewer charge for moderate use would be around $800. Now our Geneva National premium is down to $2760.

Now that we’ve figured out the monthly fee difference, consider what that $2760 buys you. Tennis, pools, gated security. Is that worth $230 a month? I think it is, but you might not be so easily convinced. What we’re forgetting here is that the Geneva National condo is a full $70k less in initial purchase price. If we’re financing our transaction with a 20% down payment, that means the non-GN condo cost us $14k more up front, and adds $335 to our monthly liability. If we’re paying cash for the purchase, assuming a similar discount to ask for each unit, we’re forking over an additional $70k for the amenity-void unit.  That’ll cover the next 25 years of Geneva National premium.

The exercise today is simple. Let’s stop ruling out condominiums based solely on monthly fees. Let’s consider the real numbers behind that initial number, and let’s buy something that matches our lifestyle and our budget, not just our budget.

Photo Courtesy either Ideal Impressions or Matt Mason Photography. I’m really not sure… 
2017 Geneva National Market Review
David Curry

2017 Geneva National Market Review

Do people still golf? It seems to me that they do, even though I don’t. Previously, I enjoyed golf. I enjoyed getting to the course a bit early and hitting some range balls. I enjoyed a sandwich on the patio. I enjoyed the scramble for par, the thrill of a birdie. I once almost had a hole-in-one and that was almost super fun. But the game of golf no longer fits into my ideal day. I enjoy it still, if the course is green and the company prime, it’s a nice way to spend a morning, or an afternoon, or an entire day. But increasingly, my schedule doesn’t allow for a long round on the links, and when time does allow my distractions have taken other forms. Still, I used to like golf and I understand why other people still do. Geneva National has some incredible golf courses, but you needn’t love golf to consider ownership there.

This has come up often in my long history of Geneva National sales. New buyer asks for nice vacation condo at the lake. New buyer doesn’t want to spend lakefront money, and new buyer doesn’t want to buy one of our standard issue two or three bedroom, 1200-1500 square foot off-water condo units. I suggest Geneva National, knowing that there’s tremendous bang for the buck inside those gates. Buyer says she doesn’t golf. This is the Geneva National flaw, the common refrain, the reason some people dismiss this place without ever considering it. News Flash: You needn’t have a desire to golf in order to live in Geneva National. If you hate manicured lawns and rolling, forested terrain, then you should hate Geneva National. But if you like those things and you hate golf, then you should like GN. It’s really that simple.

Geneva National is huge. It’s a monstrosity in our small overall market.  That size is what makes it so susceptible to momentum swings. Those market swings have occurred with some frequency since GN first bulldozed their first roadway sometime around 1990. The good news is that the last several years have featured a solid combination of strong sales and diminishing inventory, and that recent trend continued throughout 2017. For the year just ended, GN closed 84 single family and condominium units. More likely sold- private sales, direct from builder sales, and new construction. But the MLS number is 84.  There were 71 sales in 2016 and 82 in 2015. The market strength today is obvious, and the trend supportive of a strong market. But GN isn’t without an issue.

The top end in Geneva National is remarkably weak. Consider in 2017 just two homes sold for more than $560k, and the top sale registered $750k. In 2016, there were four sales over $560k, and the top end printed $795k. 2015 closed six over $560k, with the top at $1.050MM. Now that you understand the pricing history, look to the active inventory. While there are just 43 active homes and condominiums (four more pending), there are five properties priced over $1MM.  Given the last three years of history produced just one sale over the million dollar mark, Geneva National currently has 15 years of upper bracket inventory on its books. If I’m a seller in GN and I’m looking for a number north of one million dollars, I’m not pleased.

The issues that plague the housing stock in GN are varied, but all come down to dollars and cents. GN still has ample vacant parcel inventory. Currently, 44 vacant parcels are listed for sale. Many more exist off-market.  Last year, 10 vacant lots sold. Of those 10, six sold for $13k or less. For all of 2016, the MLS registered two vacant lot sales in GN.   Geneva National has lots of vacant inventory, and a housing stock that is aging. It might come as a surprise to some owners, but a house built 15 years ago needs to be remodeled already. A 20 year old house definitely needs to be remodeled. And sadly, your eight year old house likely needs some refreshing. The problem with existing inventory in GN is that it cannot compete with the availability of easily sourced vacant parcels.  If you’re a buyer in GN seeking single family and you like a vacant lot listed at $50k, are you going to hire a builder to construct a $650k home for you (one where you get to pick the colors and materials and design), or are you going to go shopping for a 15 year old house that looks like it needs a new roof?

That’s why the single family market in GN is difficult and may remain difficult for a while. The association should do everything in its power to eliminate vacant inventory, and the easiest, most simple way to encourage that absorption is by allowing existing homes to buy vacant, neighboring parcels and be allowed to own those without incurring another monthly association fee. If the association enacted this policy, perhaps more vacant inventory would be removed from the market, and that would be the start of price appreciation for the single family homes. Until then, or until the market slowly absorbs this inventory, expect stagnation.

The condominium market in GN is much healthier at the moment, and I’d expect the low inventory to benefit this segment especially.  If you’re a buyer looking to spend $150-350k on a vacation home in the Lake Geneva market, I cannot see a better option for large square footage at a discounted price.  While the property feels like a country club, you can either enjoy it as such or just enjoy it for the natural beauty it so easily displays.  Just remember, if you hate golf, Geneva National might be perfect for you.

Lakeview Pointe
David Curry

Lakeview Pointe

I’ve written often about Geneva National. It’s a staple in our market, one of the largest pieces to this puzzle. Without it, a review of the Lake Geneva vacation home market cannot be complete. If you’ve read this column of mine for long enough, you know how I feel about GN. I love it, but I always advise caution when considering which enclave to choose. I dislike the newer sections of condominiums, those that are still under construction and growing. I encourage buyers to seek out condominiums in the established sections, so that their future value does not hang on the whim of a developer.  My approach to Geneva National in this regard has been consistent throughout the years.

Lakeview Pointe is a gated enclave on the Player course. The development consists of duplex style townhomes, each with two car attached garages, some 3500 square feet of living space, and uninterrupted views of the Player course, the course ponds, and Lake Como in the distance. The setting is as serene as any setting in Geneva National, and for those who haven’t been paying attention, all of Geneva National is pretty darn serene.  It’s close to the Clubhouse for those who wish to be members of the club, golf members or just social. If I’m a buyer looking for a large vacation home that represents the best bang for my hard earned buck, it’s Lakeview Pointe that I’m going to consider.

But within Lakeview Pointe, not all condominiums are created equal. Sure they’re all large, with those main floor masters and walk out lower levels. Sure they all have two car attached garages, and they all front the Player. But my new listing is the best of the best, boasting a view that beats all other contenders. The location on the corner of the run is what lets me see the Player green, the following tee, the ponds, the prairie, and Lake Como. I’m on the peninsula, looking south and east at all of it. If you’re a buyer who values location, there is nothing better.

But this isn’t purely a location buy. Look at the unit. It’s beautiful. It’s large and private, both quiet and exciting at once. The square footage could not be replicated for the $539k listing price. Key to understand here is this needn’t be a specific condominium buyer. This is simply a good fit for anyone in the market who seeks stylish square footage, and loads of it for a low price point. I suspect this unit will sell quickly, so if you have any interest, I’d love to hear from you sooner rather than later.

This weekend is Venetian Fest in Lake Geneva. Come for the carnival rides, stay for the fireworks. I hesitate to call this summer’s last hurrah, because it isn’t. But it’s getting close, and that should motivate you to pay us a visit.  And if you’d like to see the best condo in Lakeview Pointe, just let me know.

 

Geneva National Market Update
David Curry

Geneva National Market Update

Ah, yes. Geneva National. The single greatest argument against Walworth County growth that I, or anyone, has ever made. Growth, it’s good, they say. It’s a necessity of life, like breathing and tacos. But it really isn’t. It might be good initially, for the mattress salesmen and the carpet installers, but over time, spurts of growth generally cannot be maintained in low population locations. There was a spurt of growth in a small town of Arena, Wisconsin. Perhaps it was Mazomanie. There’s a new commercial building on the main drag, shiny and bright. Vacant as vacant ever was. It’s for sale now, the restaurants long ago gone. Nothing there to take their place. Sure, growth dictated that the building initially be built, but the community lacks the ability to maintain the vestiges of that growth once the cycle slows. This is the problem with Geneva National.

When times are good, as they are now, things are fine. Things are never terrific, just fine. Today, Geneva National is fine. The inventory is low, which is the single best condition for GN. There are just 70 listed homes and condominiums. There are an additional 11 properties pending sale. All of this is good. What’s not so good for current owners and sellers is the pricing. Consider a little house on Saratoga. I lived on this street once. It’s a nice street. The house is listed at $599k and is pending sale. It’s the most expensive property in GN to be listed as pending sale this morning, which is a side- topic for a different paragraph. The house sold in 2007 for $750k. 10 years have passed, the market on the lake and near the water has recovered most, if not all of its losses from the past crisis, and yet Geneva National properties remain stuck.  Geneva National is struggling through the end of its lost decade.

But perhaps this is just anecdotal. Maybe it’s not all like this, right?  There’s a house on Edinborough pending sale. That’s a nice street, what a noble name. That house is listed at $347,500 and is under contract for a number that is, presumably, somewhere near that price. The house sold initially in 1995 for $375k. In 1995, lakefront homes on Geneva were selling in the $400-500k range. Those lakefront homes have appreciated 300% over the years, while Geneva National properties have found a way to decline over the same tenure.  Not good.

There are currently 11 homes listed for sale over $700k. That’s not a ton of inventory for a development this large, but it’s tough when not a single home in GN has closed (per MLS) over $600k all year. 44 homes and condos have closed this year in GN, outpacing the 38 sales YTD for 2016. That’s a good sign, but the weak performance at the top end, and the lack of appreciation at all segments is the issue here.  Last year, three homes sold over $600k, and even that was anemic. Does Geneva National offer a buyer a good value? Yes. Would I be a buyer in GN right now? Yes-ish.

I’d be a buyer of the condominiums in built enclaves. I’m not a buyer of something new in an unfinished section. This isn’t unique to Geneva National, this is my standard for any purchase, anywhere. Why buy into a segment that is possibly more sensitive to a  softening of the market? Why buy and leave your investment up to the future whims of the developer? I  like the idea of buying in stable segments with a pattern of sales that allows me to feel confident in my purchase. I want to buy something that cannot easily be replicated. Would I buy an existing house in GN right now? You bet I would. But I’d be looking for value in the sub-$550k price range, or over that I’d be considering homes that I can buy well below current replacement costs.

I love Geneva National. Because of this I want it to succeed. Sadly, the only way it will succeed is if future development stops and the existing inventory is absorbed. As long as GN keeps building new products, the existing products will find themselves in a tough spot. But growth is good, the simpletons scream.  They’re wrong, and Geneva National can prove it.

Golf Lake Geneva
David Curry

Golf Lake Geneva

I haven’t cared about golf for a long time. To be honest, I never particularly cared about golf. I was on the golf team in high school, which, at first blush, might sound like I was a reasonably good golfer then. The truth is the Faith Christian School golf team didn’t have any barrier to admission. If you owned a set of clubs, or felt like using a set borrowed from one of the teachers who liked to golf for free and was, as a result, labeled the golf coach; then you were on the team.  At the start of one match, I teed off on the 10th hole of George Williams and ripped the drive straight down the middle.  My opponent acknowledged my immense skill, to which I replied in a golfing sort of way, “that’ll probably be the only good one I hit all day”. It was.

Into my twenties I played some golf. At one point in time, I counted myself as a good enough player. The summer I twice shot 80 was the summer I hurt my back, and just like that, my golf career was over.  I still play from time to time, and I still think I might have a shot at being decent if I were to practice, but interests have pulled me in different directions now. Those different directions didn’t stop me from flipping to the last few holes of yesterday’s Masters finish, and what a finish it was. I felt genuinely pleased for Sergio. I felt somewhat strange watching the announcers handle him as though he was a washed up old veteran who had finally broken his personal curse. I felt that way because at his old age he’s younger than me.

And that finish got me to thinking about golf again, about the courses and the options and the Lake Geneva golfing scene. There are plenty of reviews of local courses available. I’m sure you can read all about slopes and handicaps and the like, but this isn’t like that. This is the abridged version of local golf as seen through these two eyes, and as experienced by this one-time-marginally-proficient-golfer.

In my mind, the king of the local golf courses is Geneva National. It doesn’t matter which of the three courses it is; this is the best golf in the area. The Player course is the most scenic and involves the fewest number of houses. Trevino is the easiest of the three. I once teed off on a Trevino par three. There was a group just leaving the green who had stopped to watch my shot. There was another group behind my group, watching. The pressure was on. I gripped the eight iron and swung. Clean. Beautiful. High. It looked good, like it might go in. When the ball landed on the green and rolled towards the hole the green-side group through up their arms and hollered in celebration. A hole in one! At least it seemed like that was the case, until I walked up and the ball was three or four feet from the hole. The green-side group must have been more easily triggered to celebrate than most.  The Palmer course is nice, but I despise the finishing few holes. Geneva National is the king. If you want high quality golf, play here.

The Grand Geneva would beg to differ with that prior opinion, as their Brute and Highlands courses are indeed very, very nice. But the Brute from the tips is just awful, a terribly difficult endeavor suited for truly great players. The Highlands has some spongey, swampy holes that I don’t like. I played the Grand Geneva often when I had a good friend who was the tennis pro there. We’d play and he’d beat me and I’d realize how much I hate the game of golf. The Grand Geneva is worth playing, and you may like it, but I don’t.

Abbey Springs is a curious little course. I don’t think it gets the respect that it deserves. Yes, it’s short. Yes, the driving range is short. Yes, there are condominiums and houses throughout the course. But it is a beautiful track, capable of flustering the best golfer. There are views of Geneva Lake, wonderfully manicured fairways and greens, and if you own a lake house in the Bay or Fontana, it’s right next door. I dislike the layout of a few holes, but when you’re tucking a golf course into a residential development, creativity can suffer. Still, play Abbey Springs and be happy you did.

In Delavan, you’ll find Delbrook Golf Course. I’ve never played there. But I drive by it sometimes and I think about how some golfer apparently killed a turtle with his club and I cringe. What a terrible thing to do to a turtle. I’ll never play Delbrook, but I’m sure it’s just fine. Evergreen Golf Course in Elkhorn is where we played some high school matches. It has some ponds with bass in them. I’ve fished for the bass before, but I don’t remember the course. It’s green and there are some flags. It’s fine, probably.

Hawk’s View still feels like a new course to me, though it’s been here for nearly two decades. In the 1960s, this was Mount Fuji, a ski hill that really was just a hill. Now the beautiful grounds host an 18 hole par 72 course and an 18 hole par 3 course. The par 3 course is ranked as one of the top ten in America, according to someone. Hawk’s view is well maintained, close to Lake Geneva, and it’s more affordable than the larger courses in the area. A Saturday round in July will run you $85, while the same round will go for $115 at Geneva National. The Par 3 at Hawk’s View is very nice, and comes highly recommended if you’re playing with a kid, or you’re just crunched for time. I haven’t played that course in a few years, but I just talked myself into it.

Obviously we have private courses in the area- The Lake Geneva Country Club, Big Foot Country Club, and Lakewood. But these aren’t the topic for today. I’ve played all three courses, and they each offer something unique, but today isn’t about the country club set. It’s about people like me, people like you, people that like to golf but haven’t made it their obsession. This summer, play a bit of golf. If you’re at all like me, it’ll remind you of the reasons you no longer play.

Geneva National Market Update
David Curry

Geneva National Market Update

I decided this morning that some market behavior has no choice but to flood over into different market segments. If, as we discussed last Friday, the primary home market is on fire below $350k, then the lake access and vacation home segment should be similarly torrid under that same mark. There’s no greater concentration of sub-$350k properties in the vacation home segment than in Geneva National, and so, as the theory goes, we should assume the market there is performing quiet well. Guess what? It is.

In Geneva National today, there are 80 MLS offerings of condominiums and single family homes (zoned condo). Of those 80, 12 are pending sale. Looking deeper, of those 12 pending properties, 10 are priced under $350k. This is a positive for Geneva National as much as it is a glaring negative. The condo market is doing just fine under that benchmark price, even though the prices are stagnant, but above that price Geneva National continues its decades long falter.

Of the 80 total homes and condos on the market, 39 of those are priced at or above $400k. Of those 39, just one is under contract today per the MLS. I’m not really worried about the homes in the $400-700k range within GN, as I think they will always have some relative liquidity in the market. The drag on those homes, as we’ve discussed, is the availability of loads of vacant lots and the incredibly low prices of many of those available lots. Why buy someone’s old house for $600k when you can build a new one for $575k?

On that subject, Geneva National would be wise to consider a revision of their condo declaration. I’m not attorney, so I’m not advocating as one, but I think GN could solve some of its vacant land inventory glut if they amended their declaration to allow property owners to purchase adjacent vacant lots and not pay the monthly assessment on those lots until they are sold by that owner or until a home is built. If I’m an owner in GN I might consider buying the lot next to me if it’s $25k, just because I’d like the privacy. But if I do that today I’m going to pay $300 or so per month in association dues, on top of the same amount I pay for my built house.  Because of this, I might shy away, but if I didn’t have the pay those additional dues, I might consider it. Eliminating the vacant lot inventory should be the goal of Geneva National, and this is one way to help accomplish that.

The biggest question for GN today awaits it at the top of the market. There are seven homes offered today priced over $1MM. These are nice homes, to be sure, and they likely couldn’t be built (at least some of them) for what they could be bought for, but there’s a problem here. The market in GN has closed three homes over $1MM since 2010.  That’s one home every two years, rounding down out of kindness.  Today GN has 14 years worth of $1MM+ inventory on its books. This is a bad thing, and I’m not sure how the market ever catches up to these heavier offerings if the housing market between $500k-$999k is still suffering as well.

So what do I like in Geneva National? I like the condos priced under $250k. I think they’re cheap, I think they can’t easily be replicated at those prices, and I like them for a vacation home seeker who doesn’t want to break the bank.  In spite of the unique difficulties facing Geneva National, I continue to think there’s nothing quite like it in our market, heck, in the Midwest, and for that reason it deserves consideration.

David Curry

Geneva National 2016 Market Review

I write lots of things on this site. I write about birds and trees and lakes and streams. I write about how much I like certain things, like trout and fish, but mostly trout. I write about how much I love this place, how this place is better than the other places, how the more places I visit the more I like where I’m from. But I also write about things I hate, like Michigan and Northwoods houses and Door County and Michigan. I write plenty that might cause  some to feel triggered. But of all the topics, of all the good and the bad, the love and the hate, I get more commentary directed at me when I write about Geneva National. Geneva National, you’re up.

2016 was a good year to be both buyer and seller in Geneva National. Sellers found buyers and buyers found value. Mostly, it was a good thing and a good year for this large association on the North side of Highway 50.  Last year, 71 homes and condominiums sold in Geneva National priced from $59k for a one bedroom condo to $795k for a large single family home. Six single family homes and condo units closed for more than $500k.   This morning there are just 61 total homes and condominiums available in GN, with five more pending sale. That’s really quite positive for GN, as the one thing that plagues this association more than anything is excess inventory.

The 2016 volume trailed well behind the 82 units sold (MLS) in GN during 2015, but both 2016 and 2015 absolutely crushed 2014, which recorded a rather miserable 44 total sales. If there’s any issue with the existing inventory in GN it’s that the top end is far too heavy. There are 20 homes and condominiums priced over $500k available today. If you recall the prior graph, there were only six $500k+ sales in GN all of last year. That means we have at least three years worth of inventory at the top end, and that’s not good news for any upper bracket seller wishing to leave GN.

Even worse is the vacant lot situation. There are, in case you haven’t noticed, loads and loads of unbuilt, vacant lots in Geneva National. Currently, there are 57 available, priced between $7k and $260k (there are a few others that are zoned commercial).  That’s a lot of lots, but don’t fear, because with TWO vacant lot sales in 2016, that means GN only has a scant 28 years worth of available inventory. Even if we average in the 2015 sales (11), there’s still nine years worth. The vacant lot situation at GN is especially troubling for owners who would like to be sellers, because the monthly fees keep coming even as the prices drop. I owned a few different lots in GN over the years, and I must admit I’m happy that I don’t own one at the moment.

The relationship between vacant, available lots and available single family homes is somewhat troubling, given that they are bound into the same market. Too many available single family homes drags on the prices, which leaves less and less motivation for a buyer to buy a vacant lot and build from scratch. If I can buy a nice house for less than I can build it, why would I build? But along those same lines, if the lots are free ($7k for starters), why wouldn’t I build when the cost of the land is essentially zero?  The good news for the GN housing stock is that construction prices are on the rise, perhaps up as much as 20% over the past few years by some accounts, so this might help deter buyers from building. The hope then is that they’ll buy an existing house instead.

2017 looks to be a decent year for GN, and for once the large association is going into a selling season without too much inventory. I’d expect a fair year, but as with the rest of the vacation home market, if the inventory doesn’t build then neither will the sales tallies.  Interest rates should be stable through the first part of the year, but buyers will feel some motivation as rates are higher than they were last fall by a reasonably meaningful margin. GN continues to have too many homes and too many lots and too many condominiums under development. The dues are higher than I’d like them to be. There are issues with all of these factors. But if you’re a buyer looking for newer square footage in a country club environment and you just so happen to like playing golf, then Geneva National just might be your best option.

Abbey Springs 2016 Market Review
David Curry

Abbey Springs 2016 Market Review

There’s a common theme amongst these 2016 market reviews. Yes, the markets we’ve reviewed so far all preformed quite well in the year just ended. And, yes, each market is low on inventory to start 2017. But beyond that, we have a very similar ratio of performance to inventory in each and every one of the markets we’ve reviewed to date. Abbey Springs had a tremendous 2016, which is not something especially rare. Abbey Springs tends to have good years often, and if you’ll remember when the broad market stalled it seemed as though Abbey Springs kept churning forward.  Abbey Springs has a way about it, and that’s because it’s the only association of its kind in our market. Country Club amenities with resort features and actual frontage on Geneva Lake. It’s rare, it’s special, and the market knows it.

There were 40 (per MLS) sales in Abbey Springs during 2016.  Lest you think that’s somewhat normal, 2015 featured just 20 sales. That’s double the volume year over year.  In 2015 there were five sales over $500k, and in 2016 there were seven such sales. As we enter 2017, inventory is low, with just 19 active listings and one pending sale.  The top end inventory is a bit heavy, with nine homes over $450k available this morning.   Current inventory starts in the $150k range and runs all the way up to $1MM. It’s a unique association that can function and thrive with such a diverse grouping of condominiums and single family homes.

With 40 sales last year and just 19 homes available, those numbers mirror the lake access and the lakefront supply ratios. In all of these markets we have approximately six months of inventory. That’s a healthy ratio no matter the market, though I’d really prefer we have 8-10 months of inventory so that buyers can feel a bit better about their choices.  I think it’s a testament to our broad Lake Geneva vacation home market that we can have such solid activity across all price ranges and all ownership types. Why did Abbey Springs have such a dynamic 2016? Was it because of interest rates or inventory choices or all that summer sunshine? It’s likely due to all of that, but the simple truth of Abbey Springs is that it is without equal in our market and rare inventory will always find an audience.

Abbey Springs will follow the same path as the rest of our local markets. If inventory allows, sales should be solid. If inventory stays low, there’s no way we’ll have a repeat of 2016. That seems obvious, but most markets cannot push their volume totals higher just because inventory exists. It’s a healthy market that can effectively consume as much inventory as it is dosed. Next up, Geneva National, which won’t feel nearly as good about itself after Monday’s post.

Geneva National Market Update
David Curry

Geneva National Market Update

Every segment of the lake access and lakefront market has activity. If you list a $69k shed in Knollwood, like the one that was listed last week, it’ll sell (and it already did). If you list a $10MM house on Pebble Point, it’ll sell,  assuming you list it with me (and they did and then it did). If you list a house with a slip for $600k, it’ll sell, and a $2MM lakefront tear down? Sold.  Most segments of our non-lake access vacation home segment sell with some regularity as well. A farmette with 10 acres and a neat old barn will sell to a couple from Bucktown who have already grown tired of the 606. A condo at Abbey Hill will sell to someone who wants a Fontana vacation getaway on a budget. Everything sells, no matter what. Unless it’s in Geneva National.

As of this morning, there are 31 available properties within those gated confines listed for more than $500k.  Those are single family homes and traditional condominiums, though obviously the vast majority are of the single home variety. The homes are nice, often possessing fancy appliances and fancy trim, sometimes, usually, at least one gaudy chandelier that screams 2004.  Some of these homes are newer, some are original dinosaurs built in the early and mid 1990s. The thing about homes built in the 1990s is that if they haven’t been substantially renovated, they’re really quite lame.  Geneva National, in spite of an incredible year in the lake access market surrounding Geneva, remains plagued by pockets of heavy inventory.

So far this year there have been just six sales (per MLS) that closed over $500k. It’s mid-November, and without a single pending property in this price range, it’s likely GN ends the year stuck at six.   All of 2015 registered just seven such sales, so six isn’t such a let down, it’s just that it isn’t a market undergoing a solid recovery, it’s a market bogged down by too many sellers thinking this is the time to sell. The numbers are telling us a different story- this isn’t the time to sell.  In 2006 there were 19 sales in GN over $500k, so if you’re looking to sell in this price range, 2006 would be a good place to visit.

But this is unfair, unkind,  and it isn’t the fault of would-be sellers. It’s not the fault of the Realtors. It’s not entirely the fault of golf and its dwindling numbers, even though we’d be foolish to suggest that the decline in golf’s popularity doesn’t have something to do with this. No, this is simply a matter of supply and demand, and Geneva National has, and likely will always have, too much supply. It’s not that the homes there aren’t beautiful, as many are, and it isn’t that the development isn’t one of the most aesthetically pleasing you can find- it is. It’s just that there are too many homes there, and when the built inventory requires more buyers than the market can produce, you’re going to have stagnant prices and tepid demand.

Demand creates demand, this is obvious. More buyers bring more buyers, it’s just the way real estate is. But when you can’t create demand, and you can’t convince a buyer that they had better act soon or they’ll miss out, then what is left? Just a bunch of nice enough houses on nice gated streets. Certain styles of homes will still sell. Those homes that are architecturally unique or otherwise interesting, those will find buyers even now. But the vast majority of homes are going to struggle to find buyers, and that’s exactly what’s been happening over recent years.

I love Geneva National, I really do. I’ve built in GN, remodeled in GN, bought and sold in GN. I enjoy the golf courses immensely. But even in this environment of super low interest rates and broad market demand Geneva National has faltered, and I don’t know what it’ll take to bring it out of its funk.  Sadly, the only fix for Geneva National’s upper bracket housing market is more buyers and I don’t mean seven per year.  Does this slowdown create opportunity? Of course it does, but unfortunately, as long as this inventory remains inflated GN won’t experience a full recovery.

Abbey Springs Market Update
David Curry

Abbey Springs Market Update

There’s a truth we need to agree on this morning. Abbey Springs is nice. That’s a truth. Abbey Springs has a golf course, another truth. I have hit many Abbey Springs houses with golf balls that were launched off of a club face under my “control”, super truthful. Also, the Abbey Springs beach on a sunny holiday weekend is less a beach and more a flesh blanket. It’s a flesh blanket. Mind if I lay my head on your stomach, because I can’t find any open spot of sand? Flesh. Blanket.

But this is unfair, because it’s a nice flesh blanket and it’s the only association of its kind that has a beach at all. It’s a miniature Geneva National but instead of being located on Lake Como, it’s located on our Geneva Lake. It’s also just 592 units in size, which makes it enormous but still about one third the size of Geneva National. In this size difference there is a key to the market. Instead of needing to print 60-100 sales per year to keep pace with market demands, Abbey Springs can leisurely print 18-25 sales per year and everything will be fine. Smaller associations are like that, and Abbey Springs has both a holiday beach draped in a flesh blanket and a really solid market. Let’s talk more about the market.

Last year at this time there had been 14 closings in Abbey Springs, with just one of those sales printing over $500k. This year Abbey Springs has closed 28 total sales with five over $500k, including two over $800k.  With that you know this: Abbey Springs is having itself an absolutely terrific year. The condominiums are selling, the houses are selling, the beach has a blanket of flesh and the golf balls are knocking roofs. The grounds are well maintained and the ghosts of large past special assessments all but forgotten. Abbey Springs might be having the best year of any individual association around this lake, and that’s a really good thing.

But the market isn’t without holes. There are issues here, chiefly the market’s relative difficulty in printing sales over $700k. Yes, this year there have been two over $800k, but look back and consider since 2010 there have been just 9 single family sales over $700k in Abbey Springs. That’s a little more than one per year, and that’s not terrific.  There are loads of Abbey Springs homes valued over $700k. Lots and lots of them. Yet the market still has a hard time absorbing that nicer inventory. For an association as strong as Abbey Springs, with the indulgent amenities, I’d expect a stronger market over that price point. For context, Geneva National offers bigger and better homes for the money, but GN has printed 15 sales over $700k since 2010, so GN has finally beat Abbey Springs at something.

I have plenty of buyers who contact me in search of some nice single family home in Abbey Springs priced around $500k. This is hard for me to say, but Abbey Springs around $500k in a single family home situation doesn’t offer much. It’ll give you a reasonably decent house that needs updating. If you’re looking to spend $500k and you want a Viking stove, better check elsewhere. This does create a market for the buyer who wishes to improve a built home, as nice homes with elevated, newer finishes in Abbey Springs generally start at that $700k mark and run upward from there. Looking to create value in Abbey Springs? Buy an older house and fix it up. You know, like they do on TV.

I’ll be working this holiday weekend, so if you find yourself at the lake and in need of some advice, fire away. Unless you want to call me at 11 am Sunday morning and you’re hoping to see seven homes at noon, then don’t call me. Just email me and we’ll see what happens. Have a terrific weekend at the lake.

Affordable Lake Geneva
David Curry

Affordable Lake Geneva

Take to the highways and county roads this summer and you’ll notice plenty of things. You’ll notice that semi drivers often change lanes with relatively little warning, which is especially rude when I’m in the middle of writing a lengthy email. I’m beginning to think it’s not just texting and driving that’s dangerous, but also emailing and driving. Perhaps the public awareness campaigns will tweak their message. You’ll also notice motorcycles. I’m afraid of motorcycles, I admit it. My dad told me once that a motorcycle driver took a corner too fast near some house he lived in when he was a child. He said he had to go in the house to get towels and sheets to help his mom mop up the blood from the street. I find this to be implausible, completely and utterly so. There’s no way you’d worry about mopping up the street especially if rain was in the forecast. You’ll also notice campers and RVs and tow behind camping apparatuses. The world goes camping, even if we don’t.

There’s something else that’s common on these roads in this season and in the cars, trucks, and SUVs that are towing these camping things: The occupants of the car are generally in a fair mood. They’re going camping, with that pop up camper thing, and they’re happy about it. They’re driving someplace far, or someplace near, but they’re going to get there and then they’re going to set up their camper and they’re going to pop open their folding lawn chairs and they’re going to eat hotdogs around the fire. When night falls, they’re going to sleep in that camper, mom and dad in the bed part that sticks out over the bed of the truck, and the kids somewhere else. I’ve never been in one of these camper things, so I’m just imagining how it all works. But regardless of the cramped quarters, the lack of finesse, these people who do these things are content. They’re content because they’re getting away from their weekday lives and living differently, if only for awhile until the time comes to pay the park attendant the weekend rent and fold the camper back to its traveling form.

I’m never going to camp like this. Odds are, neither are you. But we can do things like this in a more comfortable way, and we can do them affordably. For every $7MM listing that Lake Geneva can offer you, there are 20 $189k vacation condos. For every $800k association home with a  boatstlip there are five $220k association homes with lake access. This is a market for the affluent, sure, but it’s a market for anyone who has a few extra dollars of disposable income and a feverish desire to get out of town on the weekends. Lake Geneva has always been the place, but it’s not just the place for business icons and those of affluence, it’s for everyone who wants to make a few sacrifices and spend their weekends living in a different place, in a different way, just like those happy campers who clog up in the interstate.

Along those lines, consider the economical Lake Geneva vacation condominium. I have some rules for this sort of purchase, and it includes avoiding condo-tels, because those are ridiculous.  You’re also not allowed to buy some condo in some absurd setting, like the condos that were created in the part of Williams Bay best left for lower value housing and commercial buildings. So let’s look at the condo market, and consider where you should be considering. Willabay Shores, this is an easy one. Priced from the painfully low $130s up through the $250s, these are simple two and three bedroom condominiums. They’re not new, so be ready to do some updating, but they’re walkable to the lake and the Williams Bay beach, and they have a pool and tennis courts and one car garages. You’ll feel part of the scene here, because you are part of the scene. Grab a fishing pole and walk across to the piers to fish. It’s terrific fun, and Willabay is still cheap.

Bayside Pointe is just up the road from Willabay, a bit farther from the water but still close. The units are newer, larger, so if you’re looking for newer and larger and you’re in the $200-300k price range, these are worth a look.  You won’t get any lake access with Willabay or Bayside Point, but you’ll be close. Can you tell that proximity matters? Walking distance to the lake is a good thing, and you should want it. Unless you’re considering Geneva National, in which case you’re not walking distance to any lake (Como doesn’t count in this context), but you’re tucked inside a beautiful enclave with what I deem to be the finest golf in the area. You needn’t be a golfer to vacation here, because who could hate beautifully manicured lawns, even if there are small holes with flags sticking out of them every so often?  If you’re a buyer in the $100-$300k range and you’re looking for a Lake Geneva vacation home, Geneva National should probably be the first place you consider. I have two condos in GN in this entry level range pending, and the buyers are making wise decisions. The values are still depressed, so there’s still value to be found. Yes, the market there is subject to some tumult, but you won’t mind so much when you’re living large in a very affordable vacation home.

In Fontana, affordability is nicely intertwined with the extremely unaffordable. In town, you can buy a condo for $700k. Or you can buy an Abbey Villa between $199-$299k. The villas are older, so they’re not huge and they’re not particularly high end (unless you find a renovated unit), but they will get you into the Fontana scene on the cheap. They’re sort of part of the hotel but mostly not part of the hotel, but you have pools to use and the beach a short walk away. You can’t bring your pets to the villas, so if you need to bring Fido each weekend, the villas won’t work. If you need to bring your dog, consider Abbey Hill. A bit farther from the lake, but still close to the scene. The units here are diverse, interesting, and I’ve always liked this place. In the $200-300k range, there’s no better option in Fontana.

Abbey Springs might take offense to that statement, and if they did they’d have a point. Want the whole scene in one development? The tennis, the golf, the pools, the beach, the restaurants, etc and etc? Then Abbey Springs is for you. Units between $140k and $350k offer a bit of everything, including some very odd floor plans.  The designs are a bit haphazard,  but they’re also fun and quite effective. I’d be considering Abbey Springs if I wanted an amenity packed association in the heart of the Lake Geneva scene.

If you’re looking for an affordable weekend retreat, skip the camper and the packing and the cramped sleeping arrangements, and just talk to me about a Lake Geneva vacation condominium in one of these terrific associations.

Geneva National Value
David Curry

Geneva National Value

I’ve spent a fair amount of time this year in Geneva National. I’ve shown most of the houses that are on the market inside those gates. I’ve generally been underwhelmed.  Many of the houses are older now, in need of kitchens or baths, paint and trim. They have bright shiny brass this and oak that. They’re just not right anymore. Sellers have been a problem, too. They’ve been stubborn, acting like they haven’t a care in the world and that if this buyer fails to come up the minuscule 1.5% to match the seller’s number, well then the seller stands his ground and lets the deal fold. This has happened twice this year, and in both instances the offending seller is still offering his home for sale. Sellers are being foolish in GN, but this is mostly the situation for sellers of the single family homes. They’re unwilling to recognize that their 2006 valuations still have nothing to do with their 2016 valuations. But alas, Geneva National offers redemption.

And it isn’t found by way of the single family homes, it’s found in the lower priced condominiums. Those units at the Lakelands, the Woodlands, the Highlands, yes, the names are repitious and boring, painfully so, but there is value to be found. Consider the broad Lake Geneva vacation home market is, by my keen eye, still between 10-20% off the prior cycle highs. This number is the broad measure, as certain homes have appreciated beyond their highs, and other homes are still off as much as 30%.  Markets are unfair, and a rising tide might life all ships but the truth is that some ships are more buoyant than others. Some have leaks.  In Geneva National, the market has rebounded nicely, and 2015 booked a huge number of transactions, but still, value abounds.

A nice enough Woodland unit sold in 1992 for $119,900. That unit is available today for $136,900. It isn’t a stretch to assume the seller will lose net money on that sale, even after 24 years of ownership. Another Woodland unit sold for $219,900 in 2006, at what would have likely represent the peak for GN in the last cycle. The market in GN started fading before the rest of our market did, with a strange feeling starting in 2007. That same unit is offered today for $149k. Lest you think I’m a Woodland abuser, a Lakeland unit currently listed for $175k first sold for $200k. In 1992. That’s 24 years, a span where something on the lake might have appreciated 400%, and in GN, this unit is losing significant money after such a long period of ownership.

Why does this look bullish to me? Why would I not take the opposite approach and say that GN just can’t hold it together over a long period of time and as such should be avoided? Because of the market conditions that show us which sort of properties are being replaced. See, the reason I’m anti-development is because of what mass development does to the existing housing stock. If you own a $199k vinyl ranch in Elkhorn, congratulations. Your $199k vinyl ranch was likely $199k in 2000 and it’ll probably be $199k in 2020. That’s because they can keep building small $199k vinyl ranches on cheap farm land until the end of time. In Geneva National, they’re no longer building 3 bedroom 2 bath condominiums for $149k. The newer stock, excepting the complicated Cobblestone Court, is generally $250k and up. That’s because it doesn’t make much economic sense to try to flood the market with $169k brand new condominiums. And because of that, your $130-240k condo purchase in GN is likely a very good, rather safe, idea.

Yes, some of the older buildings are GN are subject to special assessments as they repair and replace the cedar siding that has given out over time. This is unfortunate, but it’s a fact of condominium life everywhere. The pure condo model wherein the owner pays a little bit of money each month into a collective fund so that when the roof needs to be replaced they have money; that’s a sweet, tender concept. But what actually happens in most cases is the owner pays in every month and then when  major capital project needs to be completed, the owner is special assessed to pay for it. In that, the condo model is dead. But as long as the condo buyer knows this in advance, it’s not the worst thing in the world. Most specials are amortized conveniently and will not represent too much hardship for the assessed owner.

So today, consider Geneva National. If you like the houses there, terrific, so do I. Except the brass and oak ones, most are offered at or below replacement value, giving little reason to consider a new build there as long as this overhang of housing stock exists. Look to the older condominiums, the ones that need some paint and trim work, and maybe some new counters and appliances. Those are the units that can be bought right, and those are the units that represent value even in this well performing market.

Lake Geneva YTD Performance
David Curry

Lake Geneva YTD Performance

The year is young now, but not so young that we can’t judge it.  One year old children are young, so young that we shouldn’t judge them. But two year olds? Judge away. The market is now in its second month, and with a lifespan of only 12, our market is as a 7 year old, and we know very well that we can judge 7 year olds. If a kid is fantastically smart and sweet as a 7 year old, chances are that behavior will stick through his or her life. If the 7 year old is horrible, mean and ornery, we can, sadly, assume that this 7 year old will grow to be a horrible, mean and ornery adult.  The 2016 Lake Geneva real estate market is old enough now that we must judge it.

January was not a kind month to my biotech heavy portfolio, in fact, it was ruthless and homicidal. The year started with big index declines, and continued in this most miserable lower for longer pattern. The good news might be that the bottom seems to have held for now, so buyers have not been scared away in the same way that they would have if we remained in that free fall. Most segments are doing just fine today, with individual markets performing better than others. Remember, cheap oil means your portfolio looks awful and you won’t be retiring on time,  but never underestimate the life affirming power of $1.49 gasoline.

I had a closing last month in Geneva National. GN, as you may recall, had a fantastic 2015. The carry over has not yet been evident. Today, GN has the rare condition of owning 71 market offerings (single family and condominium) but not a single showing as under contract. I have little doubt that something is under contract there, but the MLS isn’t yet reflecting that. That’s rare, that’s odd, and it’s not good. Sellers in GN who entered 2016 thinking that things have been completely healed should rethink that supposition. The market is better, yes, but if a particular seller has not yet succumbed to the pricing realities that cemented in 2015, then don’t expect buyers to be rewarding GN with liquidity in the way they did last year. GN, pay attention and don’t get smug just yet. YTD Grade: D

Abbey Springs has somewhat high inventory at the moment, with 36 offerings. The good news for AS is that they also have at least five of those properties under contract. If GN boasted a similar ratio, we’d see 10 GN properties under market at the moment and everyone would proclaim the market as hot, hot, hot (Disclaimer: Many agents do this regardless).  Abbey Springs has just one single family home under contract, that of a reasonably nice home on Saint Andrews listed at $699k. It’ll be interesting to see if 2016 delivers some upper bracket buyers in Abbey Springs. That didn’t happen in 2015, but we’ll see if ample inventory provides a few of those rare $800k+ buyers to Abbey Springs. YTD Grade: A-

The lakefront condo market on Geneva has, since its heyday of 1998-2006,  stalled. Spurts of volume here and there do not heal a market particularly well. But alas, prices in this segment never cratered in the way that the residential lakefront market did, which always perplexed me. If you’ll remember back then, I was perpetually wondering why there weren’t more foreclosures in the lakefront condo segment. I was happy there weren’t, but still surprised. Today the lakefront market has some nice movement, with a bit of aged inventory in Fontana Shores under contract and a townhouse in Somerset that just closed this morning for $725k. Inventory remains light in this segment, which is good. The lakefront condo market chokes on inventory. So far, so good. YTD Grade: B

The lake access market surrounding Geneva is off to a quick start, with five properties pending sale today. A few new ones- a contract with buyer of mine on a Glenwood Springs property, and a new contract on an off-water home in Cedar Point. That home is listed for $825k. It’s a charming home, but off-water with no slip and a somewhat limited cottage design. It had sold previously in 2007 for $1.15MM. That was a peak price, and then some. Other pending properties are in the lower reaches, including on in Indian Hills in the $400s, and three more under $250k in Country Club Estates and Cedar Point Park. YTD Grade: B

Lastly, the king, the lakefront market itself. Inventory is tragically low, with just 23 true lakefront homes listed (and four vacant lots, including two that are my listings- Loramoor $2.34MM and North Shore Drive $4.475MM). Of those 23, six have contracts. That’s really quite remarkable, so let that sink in for a bit. Out of 600 or so lakefronts on Geneva, just 17 homes are for sale. If you think you’ve found an exclusive market somewhere in some mountain town, I assure you we belly laugh at your exclusivity. Pending today is the small odd home in Knollwood ($1.125MM). That home is proof that if you just wait forever and keep dropping your price, you’ll sell. Dartmouth Woods is pending ($1.35MM), and that’s a nice little place that I like quiet a bit. A newer build on LaGrange is pending just over $2MM. If you don’t know the house, it’s the one that sits in the shadow of Vista Del Lago.

Bonnie Brae has a pending sale in the low $2s, and once that closes we’ll have seen a rather significant turn over on that Snake Road street. In the past several years, the market has closed three other lakefronts on that short road, with this pending ranch about to become the fourth. That’s nice to see, as new owners generally undertake some level of beautification of the home, and the market benefits.  In the upper reaches, the old brick home in Williams Bay formerly known as Towering Elms (until Dutch Elm Disease killed them all) is pending with a $3.85MM ask. Expect that home to be knocked down once closed. Finally, I have my sale on Lackey Lane in the mid $4s pending to  buyer whom I’m proud to represent.  YTD Grade: A-

One small lakefront closed last month, that of the skinny lot on Outing, just to the West of George Williams. For $800k, a buyer snuck onto the lake. It’s a curious property sure, but it’s $800k and that, is that. The lakefront market won’t be making an encore of the 2015 volume totals if this inventory stays low.  I have some exciting lakefronts coming to market in the near future, and I expect other agents have their own off-market properties on their radars.  The South Shore Club continues to be absent a single offering, which means that club won’t be lending too much to our inventory totals unless there’s a sudden influx of inventory, which I’m betting there won’t be.

For now, so far, so good. No after school tutoring or behavioral sessions necessary for our little seven year old.

 

It’s Lake Geneva’s Winterfest Weekend, so please do come to the lake if you like cool things, like snow sculptures. It’s a really great weekend. If you’re planning on waiting in line for brunch tomorrow, you can do so much better.

Geneva National 2015 Market Review
David Curry

Geneva National 2015 Market Review

In 1992, a small one bedroom condominium in Geneva National sold for $92,300. I imagine how happy the new owners were. They’d come up to golf and to swim, to tennis and to walk, to explore the area and when the day was done, return to their tidy little condominium.  It was a slice of heaven, I suppose. In 2005, that small condo sold for the second time, for $129,900. Seems a reasonable ransom for that little bit of Lake Geneva bliss. If you’re worried that you missed out on that deal, don’t worry, the same condo is available today for $69,900.

It’s not easy to offer a property in 2016 for 75% of what it sold for in 1992, but Geneva National can do it.  2015 was a most spectacular year for GN. 81 built homes and condominiums sold. Consider in 2014 only 44 sold. 2013 had 56 such sales. 2012 just 35. In fact, you’d have to go all the way back to the peak market year of 2006 to find more annual sales (91). Geneva National found favor last year, and anyone wondering why need only consider the sad tale of that one bedroom condo. Prices are still down, values are still obvious, and as a result, the liquidity is profound.

I’ve written often about Geneva National. Indeed such a large development in such a small overall market deserves considerable coverage. It’s no secret that I really like Geneva National. I like like it. It’s a terrific development, and as a guy who generally despises development Geneva National is an exception. It’s a fantastic development and our market needs it to bridge the gap between lake access homes on and near Geneva and everything else. The only problem with Geneva National is that it’s too big. It requires too many buyers annually to keep it moving forward, which is why it stalls when things in the market go sideways for a while. But its size isn’t its fault, it’s the fault of the developer who saw only dollar signs when he should have been contemplating the long term ramifications of such a large development. Perhaps a certain Geneva, Illinois developer should learn from Anvan’s mistake?

Value today is apparent in GN. There are deals, and there is value, and in that, Geneva National should continue to capture the attention it deserves. I sold two properties  in GN last year, and I have a terrific townhouse pending sale right now.  The sort of condo that you can buy in Geneva National for $200k doesn’t exist in Abbey Springs even up to $400k. If you want to affordably hang your hat and have a quiet launching point for a Lake Geneva weekend, is there anything better than Geneva National?

While the 2015 volume was comprised of plenty of smaller condo deals, it was nice to see some higher value properties print as well. There were 7 MLS sales over $500k, which is a positive for GN.  When I built my home in GN in the mid 2000s, I figured the primary market would take to GN and drive up prices as my generation sought to upgrade and improve their housing situation. I was wrong, of course, but Geneva National should be on the radar of any primary home buyer seeking a Walworth County residence in excess of $450k.  Additionally, a vacation home buyer seeking a $500k vacation home should generally try to be as close to Geneva Lake as possible. If that sort of cottage isn’t  desirable, then a GN home should at least garner a look.

Inventory in GN has dropped, with just 62 homes and condominiums for sale as of this morning. That’s way down from the traditional inventory levels that hover over 100, and I expect this will help GN in the first quarter. The properties that are for sale largely represent value, and low interest rates should help fuel some solid spring sales. I’m not sure how GN will fare over the course of 2016 if this stock market blip turns into a real slide, but I would expect a drop in volume from that most excellent 2015. A return to normalcy would be good for GN, so if the association can print 50-60 sales I would think that to be a fantastic year.

David Curry

Abbey Springs Sells

I built a real estate office at 57 West Geneva Street. I did this because I needed a place to work. You’d be surprised to learn, or maybe you wouldn’t, that Realtors often work from home. This work is equal parts appointments and office work, but the office work is just phone calling and typing, and if you own a home without small children clamoring about, you could easily do this from home. I have clamoring children, and so I have this office. I sit here and I type, I call, I sit on the couches and read. This is how I office.

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The traditional real estate office is nothing like mine. I use my office to work, whereas other agents use their offices to generate leads. This is why there are offices in downtown spaces that lack convenient parking. Who cares about parking when you have so many people walking by and in, seeking condominium rentals on the north side of Elkhorn? One step further, this lead generation is why there are offices at the entrance to Geneva National and Abbey Springs. These are offices engineered, successfully so, to dominate the activity in those developments where they reside. This is a good plan, and it works.

But what it doesn’t do is stop the effectiveness of outside firms within those gated boundaries. It is true, the broker that owns those two offices inside those two developments carries out the bulk of the business within those boundaries. Is this a good thing for the consumer? Is this the only way to find success within those gates? If property is owned in either GN or Abbey Springs is the only way to either buy and sell to employ the on site broker? Of course not.

This spring, I listed the home at 62 Saint Andrews Trail in Abbey Springs. It was a fine house, and I only represented the sale because I had previously worked with the owner on other endeavors. As those were successful undertakings, I was employed. Once employed, I struggled to find my bearings with that home. I struggled to understand the market, to understand how to incentivize other agents to bring me buyers. I struggled because I was an outsider. I struggled because I didn’t have an office inside those gates.

Just kidding. I didn’t struggle at all. I closed that sale last month for $746k, but only after fielding two offers one weekend and locking in the better bid. The same situation holds true for a property I recently listed in Geneva National. Outside agents, or so the story goes, can’t have success in the associations without access to the prized walk-in traffic. But that new listing in Geneva National found a buyer rather quickly, just like the Abbey Springs listing.

Moral of the story; sometimes an outside approach works as well as the standard approach. Find a competent agent. Hire the competent agent. Make sure your agent incentivizes the agents to sell your house. Then, sell your house. This isn’t really that hard.