Blog : Lakefront Sales

Lake Geneva Market Update
David Curry

Lake Geneva Market Update

This morning there are just 15 lakefront homes for sale on The Lake. It’s the last week of October and our colors have peaked. The boats are leaving. the piers being unbolted. My Superjet is one of the only vestiges of summer than remains, and even that watersled will soon make the icy journey from pier to ramp to garage, soon. The snow is coming, my dad says. There are only fifteen homes for sale and there are two ways to look at this. Both are good. Buyers, be happy. Sellers, same.

The key to any off-season is inventory. The key to in-season is the same. The key to all of Lake Geneva is inventory, which isn’t entirely different from any real estate market anywhere, but here, it seems to matter more. That’s because our market is so small. Powerful, but small. In times good, it’s a small market. In times bad, still small. It’s low volume always, and because of this low volume churn we are heavily dependent on inventory. In season, we need it to grease the bearings. In the off-season, we need less inventory to keep the market performing optimally. This year, we had the inventory when we needed it, and now that the seasons have changed and winter is knocking, we need less of it, and that’s exactly what’s happening.

Summer contracts are closing now. You’ve noticed that I’ve closed a few large deals of late, and you can expect the rest of the market to follow through with their sales, those pieces of property that narrowly slipped through my grasp. The REO on Lakeview just closed for $1.4MM, after first coming to market in the summer at $1.092MM. That sale surprises me, as there were two handfuls of offers and many of them, to my knowledge, were very, very strong. I figured this property would print $1.5MM or better, but that isn’t what happened, which is good, because I would have hated that sale at $1.5MM or better…

The entry level lakefront on Park is pending sale, as is the cottage collaboration on Walworth Avenue in Williams Bay. A home next to the Geneva Inn is under contract, as is one in the Geneva Manor. A new listing near the Lake Geneva Country Club is under contract in the high $3s, which his fine by me, at least if you ask me in public. And lastly, the spec home on 60′ in Williams Bay is under contract with an ask in the high $4s. I would expect that all but the spec home will close in 2019, which will be nice for the market, and nice for those agents.

But this isn’t about what’s happened, this is about what is going to happen from this day forward and through the end of 2019. The market will add some new inventory. It will. It always does. Who would list their home in November or December? Someone who would rather sell into a specific market condition rather than someone who would rather sell into a season. The market is low on inventory, with just 15 lakefront homes for sale (one is Clear Sky with shared frontage, one is Westgate with shared frontage, and one on the Trinke’s Lagoon), and there are still buyers actively searching. Does a smart seller wait to list next spring, as the conventional, tired wisdom would dictate? No.

While the new inventory will elicit an excited response, the aged inventory is, at this time of year, in some trouble. It’s time to pick around the edges at this aged inventory, time to make a few insulting offers. Time to see which sellers really feel like making 2019 the year they sell. Remember, just because inventory is aged that doesn’t make it bad. It might be aged because the seller has been stubborn and rejected offers that they realize only now they should have taken. Let’s work together to find these deals, and let’s make November a month of action. This is all possible assuming I survive the freezing, wet-suit-free, Superjet from pier to launch…

Basswood Sells
David Curry

Basswood Sells

I just wrote a brilliant review of the sale at W4396 Basswood. It was amazing, if I do say so myself. Succinct, powerful, articulate. And then, with a press of the PUBLISH button, it vanished. Forever lost. Eighteen minutes of my morning, gone in the click of a mouse. Still, I persevere, albeit with an embarrassingly succinct version of my prior masterpiece.

Last week, I sold my listing on Basswood for $7,200,000. I wrote a lengthy bit about how important this sale is to the market, and how the sale price, no matter if it was lower than I would have liked it to be, made sense to the market. It was a legacy house that was equal parts rare and stylish, but any modern eye would see the need for renovation here. The market is skewed toward new construction, where the larger scale buyers seek to create their own vision rather than bend someone else’s to meet their own aim. Throughout years of market time, the property known as Royal Oaks battled against that market trend, and when the dust settled last week, the property had found its new owner. Renovations will commence soon, I imagine.

I’m grateful and humbled to have represented this fine property and even finer owner. The sale marks my fourth sale over $7MM, and the volume brings my running tally since 2010 to over $317,000,000. That’s the tops in Walworth County. Further driving home the point of just who leads the lakefront market, the three most expensive sales of 2019 are now $4,995,000, $6,950,000, and $7,200,000 and all were my listings (and my buyers on two of the three). There’s much chatter in this market about market leaders and top agents, but if you’re seeking to buy or sell in the upper bracket on Geneva Lake, it’s rather obvious that we should be working together.

250 Circle Parkway Sells
David Curry

250 Circle Parkway Sells

Last year, about this time, I sold the home at 254 Circle Parkway in Williams Bay, up on the tip of Cedar Point. The home was lovely, with newer updates and a marvelous boathouse. That home was listed and sold by me in the span of one day, and on October 30th it closed for full price, $2,595,000. Earlier this year, I listed the home at 246 Circle Parkway. It was a nice enough home, in need of updating, on a similar lot (more frontage) than 254 Circle Parkway. I sold that home a couple of weeks ago for $1,820,000. At the end of July, I listed the home at 250 Circle Parkway, in the middle of the two previously mentioned sales, and within days I had competing bids. Last week, that home sold for $2,775,000. One year, three sales, all adjacent. There is a story here.

And the story isn’t about how I’m grateful to have represented each of these three sellers, though that is indeed the truth and my gratefulness only grows with each successive sale, though it could be supposed that this would not be the case. The story here is about a market, and in this case, a specific market in a specific location on this very specific lake. If the lakefront is its own market, which it is, then Cedar Point Park must be its own market, which is again, true. Further still, Circle Parkway is its own market, and in this, there are these three sales. As fate would have it, I closed each of these, so I know them exceptionally well, and having had the listings on each, I know the way the market responded to each of them. An analysis follows.

254 Circle was listed and within moments I had two competing bids. As is often my way when negotiating with two bids, I singled out the bid that appeared to me to be the most viable and negotiated that one quickly. This way, if that bid doesn’t come to contract, I still have the other bid to negotiate. If I try to press both bids, I risk losing them both. In this case, I negotiated quickly with one bid and it stuck. This home was very nice, and the sellers had completed numerous meaningful and impressive upgrades, but the home needed some bathroom and kitchen renovation, and in that, the price was capped. $2,595,000 cash closing was the result of appropriate pricing and swift negotiating. The sale made sense.

246 Circle was listed late this past spring, at a price that was easily defined as aggressive. The property was nice, the view divine, the pier recently expanded and improved. But the home itself was basic and needed some level of updating. By my eye, the property was full of opportunity, yet the market, in spite of a quick initial bid, wasn’t as easily convinced. Even as a spec home on a 60′ lot (considerably narrower lakefront than 246) hit the market in the high $4MMs, this home sat. Soon enough, a lakefront buyer with long term goals took aim and purchased the property. $1,820,000 was the price paid this fall, and that sale made complete and lasting sense.

250 Circle, in the middle of the two, was updated. Marvelously, so. New windows, new siding, new this and new that. Nearly everything, new. Perfect landscaping. A perfect view. Perfect cottage style. The owners know perfection, and having traded through many Lake Geneva homes over the years, they know how to execute it. This property came to market and quickly fielded two offers. As with the 254 sale, we pursued the sale that offered us the preferred set of terms, which, unknown to many buyers, include things other than price. Timing. Contingencies. These matter, often times, as much as price. When 250 closed last week for $2,775,000 (and pushed me over $40,000,000 in closings for 2019), the sale made thorough sense.

Three sales. One street. One year. This is the way a market should work. One home wasn’t renovated at all, and it sold for $1,820,000. One home was mostly renovated, it sold for $2,595,000. The other property was entirely renovated, and it sold for $2,775,000. Often times Lake Geneva doesn’t make sense. Homes come to market in $2MM neighborhoods and find buyers in the $4MMs. This doesn’t make sense to me, and in fact, assaults my sensibilities. The way a real estate market should function, even a market within a market within a market, as is the case on Circle Parkway, is to find a baseline and adjust the value from there. Where this falls apart, at least to me, is when new construction is involved. Buyers are wildly overpaying for new, and as long as that trend continues, expect instances like a fully functioning, fully pragmatic, market like 246-254 Circle Parkway to become increasingly rare.

Lake Geneva Price Per Foot
David Curry

Lake Geneva Price Per Foot

There’s a problem with our market. A long standing problem, one that has been established by people who thought, at the time, that they were helping. It was the Realtors that initiated this problem, through well-intentioned averaging, and once the problem took hold into the psyche of the Lake Geneva real estate market, it quickly became deeply and thoroughly entrenched. The concept is the Price Per Foot, and if I had to tell you how many times over my 23 year career I’ve been asked where that magical number was currently residing, I couldn’t, for the life of me, come up with the tally. It’s a number everyone wants to know. Everyone needs to know. It’s a number that tells us whether or not the market is hot, whether it’s appreciating, whether it’s time to sell or time to buy. And the number, unfortunately for the followers of this religion, is almost always misleading. It turns out the most commonly cited number for lakefront value on Geneva Lake is, as a point of fact, irrelevant.

The reason for its irrelevance isn’t always understood. It’s not that the number isn’t a nice number to think about when you’re valuing, whether on the buy side or the sell side, a lakefront home. It is. It’s meaningful, but it’s not everything. That’s because in order to interpret the number with any real accuracy there needs to be a hefty dose of market knowledge added to the formula. Yet, when deals are being negotiated the price per foot barges into the negotiation, especially if that magical number advances your particular case. If the seller wants $30k a foot, you’ll happily and aggressively remind him that the average is $28,700 per foot. If you have the listing and the buyer wants to pay you $24k a foot, you’ll remind her that the price is, in actuality, much, much higher. This is how the game works, but the game is flawed.

And it’s too bad, really. Because it’s not the fault of the seller, or the fault of the buyer, it’s the fault of the long standing market tendency to hold this number up as the true market indicator. At this point, there’s nothing we can do about this tendency. It’s become part of the market, in good times and in bad, and for that we are all worse off. That’s because the magical number fails to take into account the single most important thing in the game of real estate: Location. We pretend to understand location, but we don’t. We pretend to understand how valuable it is to the market, but we don’t. We pretend that the entirety of Geneva Lake consists of equal and consistent shoreline, but it isn’t. The lakefront is nuanced, sometimes in such a subtle manner that the true definition of value is entirely subjective. But the lakefront is also blunt, a heavy hammer taken to different ideas and locations in such a way that there an be no mistaking a quality location for an inferior one. The market is both things, and yet this pesky price per foot insists on blending the good with the bad to come up with an indicator of value.

A lakefront property on Basswood recently sold. The price for 150′ of level frontage? Right around $30,000 per foot. There are several other large-ish lakefront properties for sale, including one on the South Shore of the lake that is listed closer to $10,000 per foot. Does this mean the lakefront is worth $30,000 per foot? Not really. Does it mean the lakefront is worth $10,000 per foot? Nope. Does it mean, as the longstanding measurement would dictate, that the lakefront is worth $20,000 per foot? Not even close.

What it means is that level feet on Basswood are worth more than sloped feet somewhere else. It means a street that’s capable of holding value up to and perhaps beyond $12,000,000 is going to command a higher dirt price than a street that might be hamstrung around $6,000,000. This shouldn’t be hard to understand, but throughout the myriad negotiations that I’ll captain this year I will continually and consistently run into either buyers or sellers who fail to grasp this most basic concept. The lakefront is not uniform. And as such, the pricing cannot be, either.

Next time you’re buying or selling Lake Geneva, use the Price Per Foot to your advantage. But know that it’s generally nothing more than one of three or four indicators that point to the value of a specific property. Also know that if you’re buying on Valley Park, where recent sale printed for around $16,000 per front foot or you’re buying in Indian Hills, where a recent sale went closer to $50,000 per front foot, both properties could represent a value, or both could be overpriced. The only way to know? Understand the market by working with an agent that understands it better than you do. (that’s me)

Fall Sales
David Curry

Fall Sales

I didn’t have a great summer. My superjet sat on the lift, used only by my son and perhaps twice by me. The family had a new boat this year, and I used it, some. My daughter sailed, a bit, and I went with her on at least one occasion. Just kidding, it was only once. I didn’t eat casual summer dinners by the water. I didn’t walk the shore path. That’s because I was too busy. June was rainy and then when the summer weather arrived, the activity tagged along. My summer was a blur, a missed opportunity, but only because I was busy with this thing called work. Thankfully, now that the summertime deals had time to gestate, it’s time for some closings.

Over the course of the past two weeks, I was pleased to close several of these summertime deals. First up, a parkway home in Cedar Point. This one was a basic cottage in a special setting. Parkway homes are rare, but the market tends to appreciate them sometimes more than others. This summer the cottage went overlooked, before finally catching the eye of a couple of buyers. As with any deal that features one property and multiple buyers, there could be only one successful buyer. In this case, the deal closed for $630k and I was pleased for the seller, and excited for the buyer.

Last week, I closed on a classic cottage in The Lindens. In case you didn’t know, there are not very many locations around the lake where off-water homes can find support in the $1.5-2MM range. Those associations where this is most likely to occur include Loramoor, Glen Fern, The 700 Club, Black Point, and The Lindens. This sale closed at $1.625MM and I was pleased to represent the buyer who will now go about instilling some of his distinctively stylish touches into this lovely home.

I also closed on a condo at Abbey Ridge, this one for $560k. I sold that condo to the now-seller last summer for the same price. The seller moved onward and upward, and sold the condo to a new buyer looking for their own piece of the Fontana scene. In this case, $560k was a nice price for the buyer, and nice enough for the seller who had already moved on.

On Friday, I closed 246 Circle Parkway in Williams Bay for $1,820,000. I was pleased to work for the seller and with the buyer in this transaction. As is standard issue here, the seller moved on to another lake property, and the buyer was a prior client who found the property, mostly the view, to her liking. If we consider some basic math, we can see a spec home on a 60′ lot in Cedar Point pending sale with a $4.8MM ask. This home on Circle, with that enormous view and 92′ of frontage, just sold for $1.82MM. If you want to renovate this house, go for it. If you’d like to tear it down someday and rebuild, well then go for that, too. The market has spoken, and 246 Circle was a solid value for the buyer, and a solid sale for the seller who moves on without moving away.

The sales this week push my 2019 sales volume over $37,000,000, which is a terrific thing. But it isn’t the only thing, as increasingly I’m driven by helping buyers and sellers maneuver in this sometimes tricky market. Expect the sales cycle to continue this autumn, as my summer deals slowly close and new falls deals fall into place. If we were curious how the 2019 year would turn out, I think our curiosity should turn to confidence. It’s been a productive year, and it looks like the volume from the summer is rolling right into, and through, fall.

Lake Geneva Lakefront Market Update
David Curry

Lake Geneva Lakefront Market Update

Certain times, there’s nothing more to say. Like when you’ve eaten a most delicious dinner. You can say it was a delicious dinner. You can take a picture of it and post it to your favorite social media account. But beyond that, is there really anything else you can add? You could, two weeks later, tell someone about it. That would be nice, but you would have to acknowledge that no one really cares. That was your dinner. It was good, but there’s nothing more to say.

The Lake Geneva lakefront market is hot. It’s obvious. It’s unavoidable. It’s uniform. Entry level homes are hot. Massive lakefront estates are hot. Buyers are buying things. Correction: they’re buying every thing. The lakefront is hot, and sometimes that’s all you can say.

But that’s if we’re not us, and we’re not intelligent and curious. We want to know exactly what’s pending and what’s not. We want to know why. What are the drivers of this market surge? Is it as simple as the stock market valuation? If we strike a deal with China, will more people buy more lake houses? If we don’t, will they disappear? If the Dow returns 11% will things be wonderful this year, or if it returns 16% will things be that much better? Will low interest rates on mortgages spur more activity this fall, even if we don’t strike a deal with China and the Dow drops because of the tension? Because of the fear? Will JB continue to confuse barely-millionaires with inherited-money-billionaires? If he does, will the market stall? These are the questions on my mind, and on your mind, and on the mind of our remarkable lakefront market.

But first, the run. As of this morning, there are no fewer than 11 lakefront homes pending sale. That’s an astounding number. As impressive as the volume is, more impressive to me is the range of the market activity. The REO in the Highlands is pending with an asking price of $1.092MM. That was the property that came to market and fielded a bevy of offers before finally settling under contract. I expect that sale will be perhaps 40-60% higher than the asking price, but that’s purely speculation on my part. The activity generated by that foreclosure was quite impressive, but alas, one house means only one buyer. The overflow from that bidding war more than likely fueled other sales, as buyers, once committed to the lake via a hard offer, rarely pull back and sit on the sidelines waiting for another year to roll by. Some of those buyers, spurned by the foreclosure, went shopping.

My listing at 246 Circle is under contract ($1.975MM), as is my listing next door at 250 Circle ($2.825MM). Those are very different homes in a very similar location, but both are solid buys that make complete and total market sense. Farther north, a spec home in Cedar Point. This one on just 62′ of frontage, with an asking price near $4.8MM. That home is under contract. I repeat, that home is under contract. Did you know the market loves new construction? Then again, I love a good Butterfingers Concrete Mixer, and my love for this caloric bomb is downright tepid compared to the love some buyers have for new lakefront construction.

Wrapping around Williams Bay to Walworth Avenue, the string of cottages has another pending sale, this one at $1.895MM with a few cottages and large pier on a skinny lakefront lot. Whatever’s in the water on Walworth Avenue, it must be delicious, because change is coming to that section of lakefront. Would I want to invest my money in change there? No I wouldn’t, but that’s just me and I’m just a kid from Williams Bay (with 23 years of full time Williams Bay based real estate sales under my belt and nearly $300MM in closed transactions in the past 9 years…).

In Fontana, my new listing on Sauk is under contract with a $1.99MM ask. That’s a vintage cottage with some modern updates in a rare setting. There’s a large pier with shore station, garage, ample parking, and terrific square footage. Compare that to typical offerings in Glenwood that lack parking, lack shore stations, and you’ll understand why it’s under contract. I have another one-party listing pending sale in Fontana, but you’ll have to wait until that one closes to learn more about it. Needless to say, it’s a stellar transaction.

Pushing East, my listing on Basswood is still under contract ($8.495MM). Expect that one to close this fall, and when it closes, it’ll become the highest print for 2019. There’s one other private offering I know of that may break the sales price, but that won’t be in the MLS, so it won’t be something we can discuss here. The other listing on Basswood (not mine, $4.79MM) is under contract as well. Buyers love Basswood. They always have, and they always will, especially as old homes are sold and new homes are built.

On the Lake Geneva side, the home to the West of the Geneva Inn is under contract ($2.195MM), as is the log-ish home on the hill near Vista Del Lago ($4.25MM). The log home has a fantastic pool, which has been a significant driver of interest for that home. I know I’ve shown it in the past, and each buyer is initially drawn to the pool and fabulous westerly view.

That’s the current market, and that’s the hottest I’ve ever seen the lakefront in my 23 years of work here. For my take, I have been blessed with more than $31MM in pending transactions this summer, including contracts on five of the pending lakefronts. It’s been a busy season (which is why this blog has been a bit dry over the past month), and the activity has me looking forward to a slower paced fall. Still, expect this market to continue humming along, as low interest rates, lofty equity valuations, and a continued trend where Illinois residents are not reinvesting into Illinois real estate and are, instead, taking those hard earned dollars out of state to vacation home markets around the country. If you were of that ilk, and you were looking for a vacation home market to drop a few dollars in, wouldn’t it be nice if there was a nearby market with amazing liquidity and world class amenities?

Lake Geneva Lakefront Market Review
David Curry

Lake Geneva Lakefront Market Review

It still pains me to write all of this on this open format. The thought of new agents reading this and adopting my way of thinking is bothersome. I’ve sat at this desk for 23 years to find this level of intelligence, and yet someone else might have just received their license last year and now I’ll deliver to them the information that they didn’t even know they needed. Regardless, there’s nothing I can do about it, so I’ll write it anyway. Without further ado, your 2019 YTD Lakefront Market Review.

The market is active, we know this. It’s hot, you know it. I know it. The new agent knows it, maybe too well. There’s very little pause here, and if we agree that the single greatest driver of our lakefront market is the stock market, well, the S&P just closed at record highs. Because of this, it’s no surprise our market is active. But just how active? Is it healthy? Are sellers reasonable and buyers motivated? Well, the answer to the last volley of questions is a resounding no. Some buyers are motivated. Some sellers are reasonable. Most sellers are not, and most buyers are not. This is the paradox of 2019. The market? It’s hot. The market participants? They’re all different. Lake Geneva, where I’ll cobble together the market to create some data, but where each weekend and each transaction is nothing more than anecdote.

YTD the market has closed eight lakefront homes, nine if you count the South Shore Club, which counts in market context but not for the representative data that we’ll review shortly. 2018 had experienced 11 closings by this date, which doesn’t mean our activity is less than last year, it just means that we had a bit more inventory and more carry over in contracts from the late fall of 2017 that closed in 2018. The highest price sale for 2019 is my sale on North Lake Shore Drive in Fontana, for $6.95MM. The high sale for last year YTD was Hillcroft, which closed north of $11MM. The lowest priced sale this year was on Walworth Avenue, at $1.25MM. The low sale for YTD 2018 was $1.126MM, also on Walworth Avenue. Walworth Avenue, do you sense a trend? I do.

We ended 2018 with averages of $27,684 for Price Per Front Foot, $625 for Price Per Square Foot, and $58.09 for Price Per Square Foot of Land Mass. Those averages, by the way, are seldom used (outside of the popular Price Per Front Foot), largely because they narrow down value ranges in a way that don’t apply to each transaction. A property might be sheer perfection, but the house might be lame. The house might be intensely beautiful, but on a small lot. The market is full of different makes and models, and when someone tries to point to value based solely on these metrics, they’re proving their ignorance. But these metrics do matter, and they do help take the temperature of the market.

Something that I’ve noticed of late is an immense level of would-be seller confidence. These are the sellers that are contemplating a listing. Prices are high, but seller’s prices are higher. This is where these blended averages can help. Consider the current cycle bottom was in 2011. That year, we averaged $20,241 Per Front Foot. 2018 proved the average was nearly 37% higher, which is impressive and at the same time misleading. Still, let’s presume that prices have risen 37% on average since 2011. If you’re a seller using that to justify a sky high price in 2019, are you willing to admit just how low your valuation was in 2011?

The YTD 2019 numbers are as follows. The PPF for 2019 is at $34,301. Price Per Square Foot is $750. The Price Per Square Foot of Land Mass is $62.63. Those numbers are great, but they’re so misleading I almost decided against printing them. Does this mean that lakefront prices are up another 20% from last year? Some people might like you to believe that, but the answer is no. The market is stable from last year, it hasn’t accelerated more than a few points. The accumulated value differences are due to an abundance of $2-3MM sales and a lack of $4-6MM sales that might temper some of those numbers. I fear that the current figures are going to give sellers a false sense of confidence as they look for pricing clues for their summertime offering.

That said, the market is humming along nicely. It’s functioning just as it should. We should appreciate it. I don’t see inventory building too much in the coming weeks, and I do think that value still exists in spite of some current asks. Expect to see deals pick up once our weather improves. It’s an old excuse, but it’s a valid one. 68 degree weekends with abundant rain have a tendency to dampen the spirits of those looking to park a significant amount of money on our shores. But we know what we have here, and we know how life changing a vacation home here can be. We also know that the showers have made our hydrangeas very happy, which will make for a terrific July show.

2017 Market Reviews
David Curry

2017 Market Reviews

One year ago, I wrote my year end market reviews and worried about 2017 inventory.  2016 had been a terrific year, but without inventory there was no way that 2017 could match that success.  For the year 2016, we sold 103 lakefront and lake access homes on and near Geneva Lake. That was a solid tally. With the inventory concerns heading into 2017, I was uncertain we could come anywhere near that figure, but here we are. 2017 wrapped with 119 such sales, beating the prior year even though the outlook, at least based on inventory, was bleak. So what happened? Was there some rush of new inventory? Was there some development that came online and offered up a large chunk of ready-made sales? Neither event happened. Instead, Geneva was Geneva. We sold new inventory relatively quickly, and the market turned to the aged inventory and decided maybe it wasn’t so bad after all.

Today there are just 35 lakefront and lake access homes available on and near Geneva Lake.  That number is a bit artificial as it doesn’t take into account properties that recently expired and have not yet been brought back to market, but the number is still startling.  Making matters worse, there are only 11 lakefront homes available for sale. That number is just awful, but I suppose that depends on your perspective. If you’re an agent, like, say, me, then this is simply horrendous. If you’re a buyer, you feel the same. But if you’re a seller, especially a seller of a property that has experienced a length time on market, then this news couldn’t be better.  Our market, like any market, lives and dies on inventory. Today, there isn’t any. It’s Ground Hog Day in January.

It’s safe to say that the Lake Geneva vacation home market has been on a solid bull-run since the end of 2013. The market recovered volume in 2011 and 2012, but prices didn’t stabilize and find some margin until that later date.  That means we’re entering year five of a rather remarkable run. The market has made price gains, eliminated aged inventory, cleansed a few weak owners from the scene, and generally, completely, forged ahead. The lake is abuzz with new construction, leaving a market that finds a $4MM price tag to be somewhat median.  The market is starved for inventory, each of decent land in the $2-3.5MM range, of entry level offerings sub $1.5MM, and of newer construction in the $4-10MM range. For the first time ever, I believe there’s a market for homes in the $10-15MM range, even though this market has never been properly tested.

While this run has featured buyers of every sort and wealth finding their way to the lakefront, it can most easily be recognized as being the run that delivered higher end buyers to these shores. $4MM is the new $3MM.  $7MM is the new $5MM. The stakes have been raised, and Geneva continues to be set apart not only by the quality of our water and the vibrancy of our scene, but by our ability to produce upper bracket liquidity. I’ve said it often, and it continues to be more true each time I do, but Geneva is alone at the top of the Midwest vacation home segment. There is no market that comes close. Michigan, for all its effort, cannot hold a candle to our inland lake. Door County’s real estate market should be renamed Bore County. The Northwoods? Is that even a market?  Geneva is the king, and with each passing year we become more worthy and the title becomes more and more permanent.

I’m looking forward to providing you with 2017 market reviews, and will do so on the typical breaks in our vacation home market. This year, each market has had plenty of success, leaving the recovery no longer spotty, no longer skewed in favor of one segment over another. As with last year, my primary concern for the new year has to do with inventory. If we feed the market, it will continue to grow.  In spite of tax changes that take away some advantages of second home ownership and limit SALT deductions, I do not believe these will significantly or adversely affect our market. Why?  Because there’s no other market like it, and there’s no better place to spend your weekends. Staying home on a Saturday just so you can have a few extra bucks in your robust bank account doesn’t make much sense to me. I don’t see the new legislation hurting our market, even if it likely will keep a buyer or two on the sidelines. If late December/early January activity is a harbinger of things to come, 2018 looks like it will be our fifth straight solid year.

 

Above, sunset at 700 South Lakeshore Drive, sold by this guy for $5,900,000 in May of 2017.
Geneva Lakefront Sales
David Curry

Geneva Lakefront Sales

Now see, that’s a spring weekend. When I write about how much I dislike spring, I should be clear: I am not an opponent of seventy degree April weekends when the trees are blooming and the tulips are blooming and anything that was seemingly dead has now come to life. I dislike early spring, ugly spring. March, you know what I’m talking about. This is the spring I love, and this is the spring we’ll have from this day until the last day, when summer arrives. If you don’t feel the immense buildup towards another Lake Geneva summer, then I’d only ask what it is you’re doing with your life.

Last week, two lakefront sales.  My listing on Park Drive on the south shore sold Friday for $1.2MM. That’s a 60′ level lakefront lot with nice views, a three bedroom house and a two car garage. To be sure, there’s nothing super fancy here, but there is a solid house on level frontage with a private pier. $20k per foot is a price the market will pay often for such a property. I was pleased to get that property sold, both for the long time owner and for the new buyer.  This is also my first lakefront closing of 2017, but rest assured, there are more to come.

The more interesting sale last week was not mine,  and even mentioning this brings me  and my extended family intense, enduring shame. This was not my listing and it was not my buyer. Ever notice how you get emails from agents or you see their “sales” on social media, and it seems as though one agent is selling absolutely everything? That’s because agents like to disguise the fact that the sale was not actually theirs. I can’t be like that, I won’t be like that. So I’ll tell you when I sold a property or when someone else sold it. This seems the only honest way to approach this. Oh, and those Facebook ads you see where an agent is advertising a particular property? That’s not always their listing, either.  The online and print real estate game is changing, and the lines of what is and what might be are increasingly blurred. Onward towards the sale that wasn’t mine.

Sidney Smith is a nice lane.  There are nice houses and super nice houses here, nothing bad. The lakefront, East of the Smith house, was always nice, but never particularly improved. Decent houses occupied the strip of land between the Smith estate and Loramoor, but nothing had been built there for several years. A couple years ago two lakefronts sold on Sidney Smith, both homes that were either tear downs or renovation candidates. Alas, as this is Lake Geneva and the year is post-2012, the two homes were torn down and two new homes were built. One of the new owners was just beginning construction when they had a change of plans, and the house hit the market.

Now, it should be noted that Sidney Smith is nice, which is why I already noted it. It should also be mentioned that these lakefront lots measure 105′ in lakefront width. They are nice lots, but they are not estate lots. The closest comparable lot size would be found on Lackey Lane, both in terms of front feet and overall land size (about three quarters of an acre). As you may know, I sold a stylish Orren Pickell house on Lackey last summer for $4.275MM, and in the same year I sold two land value deals on Lackey in the $1.9MMs. The land on Sidney Smith had sold for $1.925MM in 2015,  further solidifying the comparable status of Lackey and Sidney Smith.

This home that hit the market last summer did so at $3.895MM, and sold after a short time on market. The buyer was not buying a finished product here, rather she was contracting on a house that would  be finished the following April. The sale closed last week at $3.8MM, though I understand there were added upgrades that may have impacted the actual buyer cost. Still, we can look to this sale and see how it makes sense, especially when compared to the Lackey sale from last summer.

That said, this Sidney Smith house was not on par with that Lackey house. On the exterior, it was more basic, less ornate.   Though the square footage was similar, it was less of a house.   But the SS sale proves one thing about this market, and that’s the level of construction that buyers are willing to trade for their four million dollars.  The homes do not need to be stunners. The lots need not be estate quality. The houses need to be nice enough, the land nice enough, the location nice enough. Long gone are the days when $4MM bought an estate. This was the case as recently as the early 2000s, but this is not the case today. Four million dollars will buy a good property with a good house, or a great property with an okay house, or a great house with an okay property, but rarely will it buy a great house with a great property.

The sale matters if only for the fact that it solidifies what the market can offer a buyer for $4MM.  This also reinforces the smart decisions being made by those who have purchased 100′ of land in the last few years and are, or will be soon, building new homes on those parcels.  The market is rewarding new construction, so if you have it and have a hankering to sell it, let’s talk. If you’re a buyer and you’d like newer construction but you can’t find it, we should also talk.