Blog : Geneva Towers

Lake Geneva Lakefront Condominium 2018 Market Review
David Curry

Lake Geneva Lakefront Condominium 2018 Market Review

When we entered 2018, we knew we had some inventory problems. This was widespread throughout the vacation home market, from entry level cottages to lakefront estates. What we also knew was that buyers rarely find the patience to stand back and wait for the perfect piece of inventory, instead they tend to wait for a bit, and then default to the next best thing.  If you were looking for a lake access home with boat slip last year, you know how difficult the hunt was. The good news is that we can now test our theories: If  there weren’t ample offerings with slips, then the market should have shifted towards condominiums as buyers looked for similar attributes and price points in a different ownership model.

The good thing for 2018 is that our model held up. Low inventory in the single family lake access market propelled sales of lakefront condominiums to a multi-year high.  During 2018 we closed 15 total lakefront condominiums, up from 12 in 2017 and eight in 2016. If we look deeper into the trend, we know that buyers have shown an increased desire to be walking distance to downtown Lake Geneva. If they want a slip and want to be close to downtown and they have a typical condominium budget of less than $800k, then Vista Del Lago should have had a stellar year. Guess what? It did.

There were seven sales in Vista for 2018, priced from $355k to $580k.  I personally sold two four bedroom units (the largest in the complex) for $520k and $515k, respectively.   Those sales were off-market, as buyers looked for inventory that didn’t exist, and their smart agents contacted me to find out what might have been available privately (you should do the same). Vista has had some tumult over the past decade, but the best possible thing for any association that’s on the rebound is volume. Vista, congratulations on 2018.

Around the lake we had two sales at Geneva Towers, both lower priced sales sub-$400k. There were no sales at Somerset, Harbor Watch or East Bank, those three higher value condominiums on the eastern shore. Working around towards Williams Bay, Bay Colony closed two units at $565k and $530k, and there weren’t any sales at Bay Shore or Bay Colony South.  Fontana Shores, that brick condo north of Gordy’s, closed two units. A two bedroom for $494k and a one bedroom for $405k.  At the Fontana Club, over in Glenwood Springs, there were two sales, though the sales were of the same double unit. The combined unit (that I had sold previously) sold in early 2018 for $685k. Then the owners renovated it, and put it back for sale in the fall. It closed late in the year for $835k, likely representing a meaningful loss for the seller.

It’s fun when a market allows you to prove a theory, and in 2018, the mid-range vacation home market did just that.  Some buyers, if faced with a lack of inventory in their target segment, will reach up. That’s common here. In fact, I can’t tell you how many buyers I’ve worked with started with a a target of $500k and ended up spending $900k. Lake Geneva can do that to a person. But what’s more likely, is for a buyer to look around at his desired price range, and in the absence of inventory,  she’ll look away from single family homes and to the lakefront condominium. Prices have lagged in the lakefront condo market even as the single family homes have appreciated. That creates some value, and when you combine value with inventory, you have the makings of a terrific year.

 

Above, my amazing offering at Bay Colony, $799k

2017 Lakefront Condo Market Review
David Curry

2017 Lakefront Condo Market Review

By now, everyone knows the Stone Manor story. Not the Otto Young story, mind you, because he’s old news. The new news is the news we like, because we’re Americans. The news is, as you know, that a buyer has bought up Stone Manor, that famed limestone manse on our eastern shore. The building has been lots of things since it was first built some 120 years ago, but most of us know it either as an old French restaurant or as the condominiums that it has most recently been. Today, it’s still a  condominium, but not really. There are seven units in the building, and all but one are under the same ownership.  The volume created by those 2017 condo sales is not something we’ll count in our year end figures, because the sales were direct, and the circumstance obviously unique. Stone Manor, we hardly knew you.

Now that the Stone Manor bit is out of the way, let’s consider the real lakefront condo market.  That is, those two and three bedroom condominiums that measure between 1200 and 1500 square feet. Those are the meat and potatoes of this market, and really of every condo market everywhere. Vacation condos follow similar designs- two bedrooms, maybe three, a small kitchen and open living room. Maybe a balcony, or a deck, which are the same thing except one feels like it has to be made out of wood, the other out of stone, concrete or steel. Still, condominiums are similar here and they’re similar there, and in fact they’re similar everywhere.

Lake Geneva condominiums have, as you well know, been lagging the overall vacation home market. I’ve suggested many theories as to why this may be, but I admit I’m not particularly sold on any of them. The lakefront condo is simply not as prized as it once was. But that’s not to say it doesn’t matter. For 2017, we sold 12 lakefront condominiums ranging in price from $302,500 for a Geneva Towers two bedroom, to a four bedroom at Eastbank for $1,212,500. I should add that I blew that Eastbank sale by sending the prospective seller emails to the wrong email address. This is my shame. Of these 12 condominiums, I sold just one of them- the two bedroom at the Fontana Club that printed $390k.

The 12 sales are fine. There’s nothing fancy about these sales. But there’s nothing lacking, either. They’re just sales. The prices have stalled, this is undebatable. Consider the Fontana Club unit that I sold for $390k was originally sold (by this kid) for $393k back in 2001. I was so young then, so healthy, so full of optimism. So was the Fontana Club. Then, at the height of the condo market a mere five years later, this two bedroom unit was likely valued around $600k. Fast forward to December when the unit sold again for a price below that of its original sale in 2001. That’s awful, but it’s a sign of the times for the lakefront condo market.

In all, five units sold at Geneva Towers, one in the Old Boatyard Condominiums ($689k- behind Harbor Watch in Lake Geneva), one in Vista Del Lago ($350k), one in Fontana Shores ($510k), one in Fontana Club ($390k), and two in Bay Colony ($550k/$476k). That’s a fine sales tally, ahead of the eight sales of 2016, and ahead of the 2014 and 2015 totals as well, if only modestly so. And that brings us to the current state of the market, and what’s next.

Inventory is low in the lakefront condo complexes, and this is a good thing. While I worry that the single family market won’t have enough inventory to spur activity, I’d prefer to see limited inventory in the lakefront condo market. That’s because the prices have sagged, and the only way to pull those priced upward is to limit supply.  The best possible scenario for the lakefront condo market is that 2018 features a handful of sales- no need to match or beat the 2017 sales total. Sell a few condos, keep inventory scarce, and see if demand increases. If the $500k-1.5MM single family vacation home market stays light on inventory, this will likely drive some buyer traffic to the condo market. And if that condo market is even lighter on inventory, this very well may help increase valuations.  That’s exactly what I think will happen this year, and that’s exactly what the doctor ordered for our slowly improving lakefront condo market.

Above, my delightfully stylish lakefront condo at Bay Colony, listed for $899k.
Geneva Lakefront Condominium 2016 Review
David Curry

Geneva Lakefront Condominium 2016 Review

Over the course of the next few weeks we’ll discuss how 2016 treated the various segments of our vacation home market.  We know the year to have been a good one for these markets, but we’ll avoid the vagaries and dig into the details.  If you wanted vagaries, you could just visit the Facebook page of your favorite Realtor, assuming that I’m not your favorite Realtor, and if not, when what have I done to deserve such a low level of favor?   The markets we’ll cover will include the following segments:  Lakefront Condo, Lakefront Single Family, Lake Access Single Family, Geneva National, Abbey Springs, and the secondary condo markets comprised of Willabay Shores, Bayside Pointe, Abbey Hill and the Abbey Villas. Let’s get started.

The lakefront condo market has been covered in depth here. Unfortunately, even as I grasp the other markets with remarkable clarity, I have been routinely dumbfounded by the behavior of the lakefront condo market. I don’t know, exactly, why the market has stalled even while the adjacent markets have excelled.  I’ve speculated that perhaps it’s due to a shift in demographics. Younger buyers, more city buyers, those who don’t want to come to the lake to share a hallway.  Even today, eight years after the start of the last housing crisis, I’m not entirely sure why this market has failed to find favor.  With 2016 now closed out, it’s clear to me that the lakefront market has remained an enigma, and the market remains stalled.

Perhaps it’s inventory that creates the problem. After all, if nice things come to market they generally sell, whether they’re condominium or single family in nature.  I sold a beautiful condo at Eastbank for $1.2MM in 2015, but that condo was recently renovated and  absolutely, entirely turn key.  So is it purely a condition of the condition? If a unit is beautiful will it sell?  Does this buyer pool just detest the thought of renovating a confined space?  If we look to the 2016 condo sales, maybe there’s a clue.

In total, the lakefront condo market closed 8 units. That’s not terrific, but it’s not the worst thing, either. A unit at Vista Del Lago sold for $362,500. That’s troubling for Vista, as the development offered several nice units throughout 2016 and yet the only sale was in January of 2016, meaning that likely wasn’t even a 2016 contract, rather a carryover from 2015.  Geneva Towers had one sale at $644,500, a fine number for a reasonably decent condo there. Somerset, a small condo association just south of downtown Lake Geneva had two sales last year, one of a short sale for $725k (though I’m assuming the buyer had additional costs associated due to the way the MLS details are written), and another unit for $1,085,000. That was an upgraded unit, and any buyer considering entry level frontage would do well to consider available inventory at Somerset and at Eastbank.

Working West, Williams Bay had two lakefront condo sales, both at Bay Colony. One of a wonderfully renovated unit, one of a unit with more basic, older finishes. The upgraded unit had sold for $600k back in 2005 when it was in original condition. That buyer then renovated the unit and sold it, after years on market, for $510k in early 2015. That same unit sold for $525k in the fall of 2016 and that, in a nutshell, is the situation with most condos on Geneva Lake. Even in terrific condition they aren’t able to sell for their 2005 valuations. The other unit in that building sold for $415k to a buyer represented by yours truly.

In 2002 I sold a three bedroom condo in Fontana Shores for $427k. That was, at the time, a nice sale for the building and a nice sale for me. That same unit just sold in 2016 for $421,750.  The last owner kept that condo for 14 years and lost money on it. During the same period, a private lakefront home may have appreciated by as much as 50-75%. Lastly, my sale at Stone Manor. At $5,995,000, it was the most expensive condo sale in our market, and likely the most expensive condo sale in Wisconsin, ever. But it’s less condo and more residence, so I won’t dwell on it here. You know it sold. I know it sold. And that sale has no effect on the remainder of the non-Stone Manor condo market here.

12 months, 8 sales.  2015 fared only slightly better, with 9 prints for that year.  There were 11 sales in 2014. But none of this particularly matters. The take away is that the market remains in a difficult way, and I don’t see any catalyst that will change that. If entry level lakefront prices rise, and that entry level inventory remains low, then perhaps the condo market will benefit.  But what I think we’re seeing is a shift away from the condo model and towards single family, and the only thing that might interrupt that shift is rare value or rare inventory.   2016 should be a solid year for the lakefront condo market, but in this context I think sold would mean 7 or 8 sales in total. To expect more would be to expect a change from the status quo, and the condo market hasn’t proven it’s capable of anything but.