Blog : Lakefront

Lake Geneva Lakefront Market Review

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.

Lake Geneva Lakefront Market Update

Lake Geneva Lakefront Market Update

I spent much of Sunday on the lake. There’s a new boat in the Curry fold, and the boat must be used. Boats are like that. If you don’t use them, they’re no fun. Just like lake houses. You can own one, and the ownership won’t be all that much fun. It’ll be work. But if you use it, then it becomes fun. It’s like money. Having a lot of it is fun, I imagine. But what good is it if you don’t use it? Along that line of thinking, the boat, and that sunshine, and Sunday. And a stop at Gordy’s for lunch and a gawkers tour of the lakefront to see what has changed since last fall.

Like every year, the lake has experienced changes. New builds are underway. Some large, some small, mostly, however, large. Renovations, big, deep, heavy renovations. Some renovations that you drive past on the boat and wonder if the renovation was the right decision. Should the old house with old house rooms and old house stylings have been scraped and rebuilt, rather than rebuilt around what was old? A new house in Loramoor, beautiful. Another new one in the Lindens, beautiful. Some new homes here and others there. The constant on this lake is the scenery. It’s always the same, always green, always lush, always dialed in. The change is the shade of the siding and the roof pitches of the new homes. Each year, the same, yet each year, change.

Earlier this week, a lakefront sold on Walworth Avenue in Williams Bay. This was not my sale. The buyer paid full price for a cottage with 50 feet of frontage, which is now the last domino in a line of five lakefront homes to have sold in the past two years along this particular stretch of lakefront. There are rumors of new construction coming to these skinny, long lots. Tear downs, maybe. Each of those sales closed between $1.1 and $1.5MM, whith just one at the $1.5MM mark and the other four in a clearly defined range between $1.1MM and $1.25MM. If gentrification is coming to this stretch of the lake, we’re about to find out.

The question now for the owners is whether or not this stretch is worthy of the gentrification, and the bigger, market question is whether or not this is a smart decision. I would argue that it’s a good decision if the initial purchase and the initial budget is range-bound. I’m speculating here, but that’s what I’m paid to do. Speculate on the current status of the market. Speculate as to where it’s going. And help buyers and sellers react to the market in an appropriate and intelligent way. That’s why I’m here today to think about the lakefront market, and to think about these sales on Walworth Avenue. There have been too many of them to ignore.

Times were, you wouldn’t want to buy on Walworth Avenue and tear the house down. This had been done in recent years, but it didn’t make a lot of market sense. Now, today, on the heels of five sales in 24 or fewer months, has something changed. Does this now make sense? I would argue that it does, with a big caveat. That caveat is not a market based caveat, but a personal one. If a buyer wants to buy for $1.2MM on this lake, they have very few options. Historically they would need to be in the Lake Geneva Highlands or on Walworth Avenue, with a few other spots dotting certain other sections of the lake. If you’re a $1.2MM buyer, you typically would not have a lot of options, but with ample, steady inventory on Walworth Avenue, it makes sense that these buyers found their way to this specific shore.

If you’re going to tear down a $1.2MM cottage and build a new house for $1MM (the low end of new construction on the lake, in my opinion, even on a small lot), you’ll be $2.2MM into a brand new lakefront house. Admittedly, this cannot be done anywhere else, and if you’re a buyer with eyes on a new house for $2.2MM, this is indeed your only option. Build away, new buyer. But this article isn’t about that buyer, it’s about the buyer that might be able to do better. The buyer who could have spent $2MM on a tear down instead of $1.25MM. This is about the buyer who is going to build a bigger house. A better house. And with all things bigger and better, that also means more expense. This is about the buyer who settled for this location rather than reached for it.

This is about the mistakes that are made by seeking out lower priced land. Don’t forget, it’s only a mistake if a particular buyer has a personal economy that is healthy enough to reach for more. Because for that buyer, reaching higher for the land purchase will always yield a higher top end once the new home is built. If you can do better, why not hope for that improvement? Why not wait to find better land with a higher upside? Why build in a range-bound section of lake when you could build in another location that might have legs to reach to $4MM or beyond? Why be early to a specific shoreline’s gentrification when you can settle in to another shoreline that has already made those strides? Why entertain the risk of one location when another, slightly more expensive, location will all but guarantee a gain at the end of the project? These are the questions that I ask on behalf of my buyers, and these are the questions that every home buyer who is considering building new on Geneva Lake should entertain. Without working through this process, you’re just buying a silly house on a lake without any real idea as to what amount of money you may be throwing away.

The market today is active, we all know this. Even new agents who tell you that they’re lakefront experts in spite of never having any lakefront experience or success can tell you this (and they do, in postcards, weekly). But the market is not without traps, and the easiest trap to avoid is the one that would have you over improve a specific section of shoreline that has yet to prove it is worth the investment. If you’re stumbling around this lakefront market looking for guidance, I’m here to help.

New Cedar Point Lakefront

New Cedar Point Lakefront

Wander through Williams Bay and follow the lakeshore to the southern tip of Cedar Point Park and you’ll notice something. Something serious. Something obvious. Something unavoidable. You’ll notice, if you’re the noticing sort, considerable and significant gentrification along the lakefront. Old houses have been made new. Renovations have taken old cottages and turned them into new creations, mixing some quaint lake house features with modern day amenities. To the north, new construction abounds. Spec homes, sold. Four million dollars, give or take. And to the south, new construction and more renovations. Shingle style examples of lakeside bliss.  If there is a trend on the lakefront in Williams Bay it’s simple: Buyers are showing a particular affinity for the southern edge of Cedar Point Park. 

Why do you suppose this is? Why are buyers, with a wide lake full of opportunity, focusing on this section of shore to design their version of vacation home perfection? It may have something to do with the views. They might be the best on the entire lake, after all. It might be that westerly exposure, that afternoon sun that lights the pier long after evening has fallen on the western shore of Williams Bay. Or it might be that buyers feel comfortable investing here simply because other buyers have already been doing so. Investment spurs investment, in the event that you didn’t know. 

246 Circle Parkway is a capable lakefront home designed in the cottage style of many of the most desirable Cedar Point homes.  Here you’ll find three bedrooms and two baths, with a detached garage and 92 feet of lake frontage. The pier is brand new and large, two slips worth so you can keep both of your boats, or buy two new boats, either is fine. It’s ideal, as is the positioning of the home along that southwestern shore of Cedar Point.  While this home is easily a proper lakefront home right now and ready for your immediate enjoyment, the real magic lies in the opportunity. Renovate this home, and do so feeling secure in your investment. The end result will be a vacation home equal to the setting, and that setting, in case you haven’t been paying attention, is remarkable.   $2,099,000

North Lakeshore Drive Sells

North Lakeshore Drive Sells

There are certain ways that certain houses charm their way into our pocketbooks. It might be a floor plan. A quirky corner where a staircase shouldn’t necessarily be, but is, and because it is, it’s somehow perfect. Or a set of finishes, the tile in the first floor bathroom. The light fixtures. The trim work, elaborate and fussy or simple and calming. Whatever the case, whatever the house, there might be something there. Something that makes the house better than the others.

Last week, I sold 389 North Lakeshore Drive in Fontana for $6,950,000. This is an important sale for our market, to display once again the dominant characteristic of our lakefront market: liquidity in the upper bracket. That’s our eleventh sale over $5.8MM since 2010, and I’ve been pleased to represent either the buyer or seller in seven of those eleven sales. This is the fifth sale over $6.9MM since 2016, and I’ve closed four of those five sales, as well. Consider now that our MLS, which covers much of the state, but not all of it, shows that outside of the Lake Geneva market, there hasn’t been a single residential sale over $6.9MM in the remainder of the state of Wisconsin over that same tenure. If you want to look at a market with a vibrant top end, you needn’t look any further than Geneva Lake. And if you’re looking for representation at that top end, I can’t imagine you’d want to work with anyone not named David Curry.

This house didn’t sell because of my masterful sales job. It sold because it was the right style house, finished with the right materials, located on a very desirable stretch of Fontana shoreline. Some sales make you wonder about the when and why, the how, really. But this sale doesn’t require any deeper or nuanced line of thought. It’s just a pretty house on a pretty lot in turn key condition and because of that, I sold it. Beginning, middle, and end of story.

For the seller who chose me to represent this fine property, a sincere note of appreciation. And to the buyer who allowed me to work with them to make sense of our upper bracket market, I thank you. Your weekends are never going to be the same.

Just Sold

Old Lakefront Homes

Old Lakefront Homes

I wanted to think of a better title. Something clever. Something snappy. Maybe something a little less descriptive and a little more simple. But alas, this really is about old lakefront homes. Not regular old homes, mind you, as an old lakefront home with a 70′ lot that wants to sell for $2MM can do so. An old lakefront home anywhere on this lake can, will, and has sold. There’s a market for the old lakefront home, so long as the lot is reasonable and the setting acceptable. But not all old lakefront homes fit into our market without a time consuming, expensive, depressing effort.

Allow me to explain. Pricing is everything on the lake, and if pricing finds an older home on that aforementioned 70 foot lot, the price should be in line with market expectations. Older homes on lots like this will sell for land value. Newer homes on lots like this will sell for a premium. This isn’t the sort of older lakefront home I’m talking about.

Legacy estates exist on Geneva in magnificent numbers. These are the estates that get talked up on boat tours. The sort that people pause in front of on the shore path and frame in their selfies. These are the Wrigley’s and the Ryan’s and the names that no one knows but the names that sometime, some long while ago, made a fortune doing something that people valued. They took that fortune to these shores and established their lakefront space. Their retreat. Their legacy.

These legacy homes traded with some regularity up until the very early 2000s. Since then, I wouldn’t describe any of the sold lakefronts with this title. Was Hillcroft, those 19 acres along Snake Road that sold in 2018, a legacy estate? Well, maybe. The property certainly fit the description, but this is a post about old lakefront homes, not old dirt, and the home itself was no longer P.K. Wrigley’s manse, but instead a modern manse built in the 1980s. Surely no structure built within my lifetime could be adorned with this lofty descriptor.

The only true legacy estate to sell in the last twenty years is Alta Vista, that Van Doren Shaw home on the North Shore that closed in the year 2000 for a paltry $3.45MM. I’d argue that we need a new legacy listing. Something on this lake that has history that even the most modern among us could not bear to tear down. The trend, in case you’ve missed it, is for Lake Geneva to loudly pay homage to history but then, once history comes to market, we just knock it down and build something shiny. I’d love to represent a true legacy estate someday soon. Everything I’ve sold on this lake is nice, but I’d like to set my aim at selling something that can be preserved and restored, rather than demolished and rebuilt. But today isn’t about the legacy estates, just as it isn’t about the 70 foot lot with an old home on it. It’s about old lakefront homes with large lots that fit somewhere in between these two stated examples.

The market, while light on legacy offerings, has been historically heavy on another sort of offering. The old lakefront home on a large lot offering. The sellers know what they want. They want lots of money and they want you to see the value in their home. It was built in the 1980s, after all, or the 1970s for that matter. Maybe even the 1950s or earlier. These are the homes that aren’t new enough to substantially remodel (as would be the case with 1990s or newer construction), and they aren’t old enough to be considered architecturally meaningful. These are the in between. The large lot having, no architectural pedigree sporting, big old lakefront homes.

And the market doesn’t like them. Not. One. Bit. The sellers force feed the market, saying, come look at my big old home on a reasonably large but not overly impressive lot! And the market yawns. That’s because the market either respects a home or it doesn’t, and as soon as it doesn’t, it’s land value, and land value only. The gulf between land value and a number that shows value for the structure is the issue. Sellers fight this. They scratch and they claw and they switch brokers and they beg you to appreciate their Reagan administration raised ranch. It’s big, after all, and the lot is, too. Look at me! I have two Sub-Zero refrigerators from 1981!

This isn’t a new issue for our market, but it is an issue that’s presenting more frequently as prices increase and large lots because more and more rare. Expect this trend to continue, and the battle between buyers and sellers will persist. As for me, I’ll be here, stuck in the middle, wondering if those old Sub-Zeros might work better if we just get the vents vacuumed.

Market Update

Market Update

It’s April. That means the year is young, but it’s not exactly new anymore. The ice left us over the weekend, and now it’s just soft water and sunshine as far as the eye can see. But that’s not entirely true, because it’s time for those April showers, the kind that are supposed to bring May flowers, but instead, often, only bring angst. It’s the in-between, not winter but not yet spring, and summer? Not even close.

The market, man, the market. Just a few short months ago I was concerned about it. Because that’s what I do, I fret. I want to keep the market momentum moving forward, and if I was put in charge of this market, more so than I already am, I could keep it going for a long, long time. Like Bernanke or Yellen, I’d be able to give the market what it needs, and tell it what it wants to hear. Still, in early January I was concerned about 2019. Today, just three months later I’m still concerned, but the concern has shifted.

When the year was young, I worried that the December stock market melt would negatively impact our markets. I worried that the recent Federal tax reform would hurt our vacation home market. And before I knew the specifics of his asinine proposal, I worried that JB’s envy driven tax plan would hurt us. Hate the man who has more than you, that’s the way that pitch went, and I worried.

But then the market melted back up, and buyers showed no signs of letting up. Contracts flew. Even as this winter threw snow and sub-zero temperatures at us, contracts were written. Buyers, rather than being spooked by any sort of December equity selloff and the rhetoric of a populist governor, pushed forward with their goals. Those goals, by the way, are mostly singular: Enjoy life, while it’s still here to be enjoyed. And if that enjoyment hinges, as we know it does, on spending weekends in a different place where the beautiful people instinctively flock like the salmon of Capistrano, then so be it.

Today, I see nothing but activity. The market is strong in every aspect imaginable. The upper end of the lakefront flexing its muscles with the pending sale at 389 North Lakeshore Drive ($7.395M). The middle market showing strength with recent offers in the South Shore Club and elsewhere. The entry level lakefront remaining devoid of inventory, excepting my pending lakefront on Park Drive ($2.195M). But beyond the lakefront, the activity is even more significant.

Pending sales are everywhere, homes with slips, homes without slips. Lake access homes that might have been barely $400k a few years ago now pending over $600k. There is activity, ample, generous, sometimes confusing, activity. Abbey Springs is on fire, with 19 available homes and condominiums and at least nine of those under contract. At Abbey Hill, four available units and two of those are pending sale. In another big turn around, there is only one available unit at the Abbey Villas. If you look back several years, you’ll read me lamenting the state of the market there. Lament no longer.

The lakefront condo market is effectively locked down, with just three available condo units as of this morning. The best among those is my $799k Bay Colony listing, but you already knew that. The picture is above, in case you forgot how great it was. There are pending sales at Bay Colony and Vista Del Lago, and a recently closed condo at the Old Boatyard around $800k.

You can see, whatever worries I had in January have been eased with this wild dose of market activity. But don’t think I’m not without worry, because I’ll always find something to worry about. It’s called creative anxiety, in case you didn’t know. Now my worry is placed back on the side of inventory. If we don’t keep stoking this fire, it might burn itself out. The best medicine for our market now is a steady supply of inventory, and with the things I’m currently working on, I think we’re going to be able to feed that need as well. Which will force me to worry about other, more important things, like how on earth I’m going to lose 30 pounds before summer.

Countdown

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.

New South Shore Club Listing

New South Shore Club Listing

The South Shore Club is all quite nice. The pool and the entrance, the tennis courts and the piers. There’s nothing like it here, and likely never will be anything like it again. Within the South Shore Club there are nice homes, some better than others. Some new, others older, some by the pool and some near the tennis. But beyond the typical homes in the SSC there are the elite. There are the select homes that do not merely angle over lawn and towards the water, but those that sit right up on the water. The front row. There are four of these built homes that match this description, two of which sold in the past 24 months for prices broke the existing South Shore Club sales patterns.

N1619 East Lakeside Lane was one of those sales. It closed north of $4MM, and the new owners immediately began the process of making a 15 year old home new again. Styles have changed, a possible surprise to some, in the event that you are sitting at home with your feet buried in forest green carpet. The process was thorough. Painstaking. Expensive. But no stone was left unturned and a house that felt very much like 2002 now feels very much like 2019. The finishes are superlative, with Plato cabinetry and Wolf appliances anchoring a stunning kitchen. Where there once was carpet there is now oak. New paint, new trim, new floors, fixtures and stone. The audio visual components and hardware have been updated throughout and a theatre room has been added to the walk-out lower level.


 There’s nothing lacking here. No space concerns, with four levels of living space spanning nearly 9,000 square feet. No quality issues, with the extensive updates and recent repairs. And quite obviously, no location issues. This is the front house. The best house. The lot that faces the water fully, with a slight western tilt to take advantage of the sunsets.  The location on the water is tremendous, opening to the widest section of the south shore, offering easy viewing of the nearby Lake Geneva Yacht Club regattas. And now it also plays like the newest house in the club, and it’s being offered mostly furnished for immediate use this summer.

Offered today for $6.495MM. It will be on the MLS later today and available for tour this week. If you’d like a tour of this home and the remarkable South Shore Club property, I’m here to help.

Pending Lakefront

Pending Lakefront

My newest pending lakefront contract, 389 North Lakeshore Drive, Fontana. It’s a great house on a great lot in a highly desirable location. I’m excited to bring a new family to the lakefront, and to help them make their weekends count. If you’re in the market to buy or sell in the upper bracket on Geneva Lake, there’s no question that I should be your agent.

Lake Geneva Market Update

Lake Geneva Market Update

I fished for a few hours last week. Me, the stream and the snow, deep and white, still soft, still clean, and the trout. It wasn’t a big stream, and I didn’t place much concern on the catch, but the sky was clear and the water, too, so I trudged through the knee deep snow and to the pool that ages of water had carved into and beneath that limestone bank. A solitary bald eagle sat in a nearby pine and kept en eye on my effort. I enjoyed that morning. I caught a few trout. It was a beautiful winter day in March, and that day is nothing like this day. Today, I’m ready for the melt.

The market, likewise, has spent this winter ready for spring. But unlike the icy hold on our landscape, the market thawed a long time ago. There’s a question as to whether it ever froze. It’s easy to sit back on a morning like this and feel the malaise of a late winter day. The ice and snow, clouds and wind. It’s all too much. But we aren’t long for it. Soon enough it’ll be spring and then summer and you’ll be sitting at your desk wondering why you let the malaise of March bring you down when you should have found the motivation of March, which is far more rewarding.

Around the lake today there is activity. Ample activity. A nonsensical tax bill proposed by The Billionaire Governor Next Door (that bill that supposes a hard working family earning one million dollars per year owes the same debt to society as a billionaire who made his money through the hard work of inheritance) is a headwind for our market, there’s no sugarcoating that. But in spite of this, the market persists. Activity is rampant in all market segments, from condominiums in Geneva National (at least ten under contract currently), to lakefront homes on Geneva. There is no let down here, just an unavoidable march towards summer, marshaled by those participants who feel like making this summer the best summer of their lives.

The lakefront condo market has had itself a nice little winter, with a rare pending sale over $1MM in Bay Colony, and another pending sale over $800k in Lake Geneva. The real tragedy here is that my Bay Colony unit, that one that’s so nice it’s almost difficult to comprehend, is still available. At $799k it’s being offered far below owner cost, and if you were looking to spend this summer lakeside in luxury, you couldn’t do it for less. Of course you could go to some other lake, but I know you’re smarter than that.

The lake access market is moving nicely, with twelve properties priced from $198k to $1.295MM currently under contract. Included in that list is my fine listing in Glenwood Springs, which remains the nicest off-water cottage I’ve ever seen. While this off-water activity is nice, the real action is once again found on the lakefront. My listing on Park Drive ($2.195MM) went under contract last week, as did another lakefront in Glenwood Springs in the high twos. A property in Shore Haven ($2.949MM) hit the market two weeks ago and was quickly purchased by another lakefront owner, as the trend of musical lakefront homes continues. It’s like musical chairs, but without the music or the chairs.

To round things out, the top end of the market received a nice jolt over the weekend with the fresh contract on my lakefront listing at 389 North Lakeshore Drive in Fontana. Newer construction in a desirable location is rarely offered on this lake, (note the desirable location part), so it shouldn’t be a surprise to see this lakefront ($7.385MM) find a buyer. If you’re wondering how important it is to offer your home to the market in turn key condition, I’ll point to this sale and give you a hint: it’s very important.

The lakefront market added four new lakefronts in the past month and three of those sold immediately. I’m expecting lakefront inventory to increase in the coming month, which isn’t especially profound. The market will continue to move as the calendar turns, and if we’re experiencing this sort of activity now, can you imagine how much better it’ll be when the ice gives us our big, blue lake back?


Park Drive For Sale

Park Drive For Sale

Lakefront buyers know that a hunt for a lakefront house can be fun. Can, being the operative word there. It could be fun. Should be fun. But often, in this market, it is anything but. No inventory, stubborn sellers, too much competition amongst other, potentially more motivated buyers. Sometimes, it’s all too much. But in the process there is an education, as buyers come to understand what it is they should expect at certain price points on this magnificent lakefront.

Enter Park Drive. A south shore lakefront with almost 80′ of level frontage with a rare sandy beach shoreline. Lakefront home buyers understand that $2MM or so doesn’t typically allow for such a wide swath of level lakefront. What’s typical in this market now is fifty feet, maybe more, maybe less, on the side of a hill. Park Drive has a three car attached garage, into which you enter off of a private, paver driveway capable of holding several cars. Parking and a three car attached garage? Not common in this market at this price point, but you already knew that because you’re a $2ish buyer and you aren’t finding what it is that you want.

An old cottage, that’s what you’ll find here. Some lipstick, a heavy hand, and voila, that’s the cottage you’ll find for this sort of money. But that’s not what I have here at Park. I have a lakefront home built in 1996 with Viking appliances and multiple fireplaces and so much glass on that lakeside wall. Yes, you can find an old cottage on a hill for this price, with those fifty skinny feet and that little pier, but why would you keep looking for that house when this better house is right here, right now, ready for summer 2019?

Three bedrooms, two baths, a three car garage, private pier, huge lakeside deck and patio, 79 feet of dead level frontage, turn key condition. $2,195,000. Let me know if you’d like to see it.

Lake Geneva Lakefront Inventory

Lake Geneva Lakefront Inventory

Here we are again. In February. The snow is still flying, but we know what we know. Summer is coming soon. With that in mind, buyers are looking forward to maybe, potentially, perhaps, spending this summer in a different place. In this place. Our place. Many are waiting. Hoping. But January is spent and February is aging and the wait continues.

Inventory was a concern heading into this new year, but I was more concerned about the stock market. Concerned about stability. The December market slide has reversed course, leaving my worries to the singular: Inventory. This wouldn’t necessarily be the case at this time of any given year, but this year, this morning, it’s all about the inventory.

Year to date we’ve technically added three lakefronts to the mix. But that’s just a technicality, as those three lakefronts were all available last year, and have only now come back to market after spending the holidays on pause. For all of the inventory concerns I had at the end of 2017, the first 42 days of 2018 brought eight new lakefronts to market, and several of those were indeed new offerings. 2019, you’re letting us down.

And what of the buyer activity this year? What’s the theme in our market at this very moment? Showings, by my eye, seem to be quite high given the difficult weather that we’ve experienced over the last several weeks. Contracts are relatively low, but that’s purely a function of limited inventory. Expect contracts to pick up in February and March as buyers either pounce on new inventory, or realize their options for 2019 are going to remain limited and turn to the existing inventory to scratch their summery itch.

For my part, I’m working on some new bits and pieces of inventory that you’ll know about soon. I’m also starting to work on the 10th issue of Summer Homes For City People, which will hopefully be available Memorial Day Weekend. If you’re in the mood to buy or sell Lake Geneva this year, I hope you’ll let me know.

Lake Geneva Lakefront

Lake Geneva Lakefront

It’s January. Time for snow storms that aren’t really actually snow storms, and lakefront price reductions. Inventory will build over the coming 30 days, and price reductions won’t be uncommon for existing inventory. That’s why I just reduced the price of 389 North Lakeshore Drive in Fontana $500,000. It’s $7.395MM now, and if you had been hemming and hawing over this place, it’s time to come take a look. The driveway is plowed.

New Construction Lake Geneva

New Construction Lake Geneva

We know the trend. It’s not just here, but it sure is pronounced here.  It’s not just a trend on Geneva, it’s a trend on our other, secondary lakes as well. Construction. It’s everywhere you look. Delavan is full of construction, Lauderdale, too. Heck, even Lake Como has a strong movement of new construction.  Gentrification, is good, everyone except the hipsters say. Out with the old and in with the new, this is our progress. This is what we were made for. To improve, to manipulate, to grow. Geneva is certainly taking that mantra to heart, and we’ve been building and building, and in fact, we just might build until we can build no more.

I left my office this week in the rain and drove around the lake. Down the roads that lead to nowhere, around the corners where the summer lives. In Williams Bay, there’s a large scale lakefront remodel that’s been in process for well over a year, and there are two spec homes that have recently been completed. Further south, there’s a rumored new project underway, that where two lakefront homes will replace one lakefront home. More on this trend later, but overall it’s a negative trend for our lake. If you care about this scene, fight against density.

In the Elgin Club, there’s a new build that’s just about done. There’s one nice sign in the Elgin Club- a neighbor purchased a home and knocked it down, perhaps to create a peaceful side yard. That’s the sort of trend I wholeheartedly endorse, and I do hope that more lakefront owners take advantage of purchasing neighboring properties when they come to market.  Fewer homes, that’s what we need.

In Geneva Bay Estates there’s a new foundation where a modest ranch once grew. There’s a patch of dirt in Geneva Manor where a home recently stood. That wasn’t a lakefront home, but it was sort of like lakefront, so it matters. $900k or so for a tear down here isn’t something I’d sign up for,  perhaps chiefly because of the tax bill that the City Of Lake Geneva likes to gift to new owners. Speaking of, did you know that the combined Stone Manor tax bill for the majority owner there is now nearly $300k? And the city hassles over permit applications, for shame.

Around that corner of the lake there’s a new build just finished on LaGrange, and a new complicated build underway on Marianne Terrace. That’s a project led by Lowell Management, and that’s a good thing. This site is unique, more like Malibu than Lake Geneva, and I have no doubt that the finished product will be beautiful and well executed. The lakefront in Loramoor is humming along,  looking sharp as it has since it first rose from that dirt (that I sold) in late 2017. At the bottom of Sidney Smith, there’s still the home that’s been under construction for years, looking, well, still unfinished.

On Maple Lane, two new homes were just built, and there’s a new spec home taking shape there along that stretch. Those are easy, deep, 100′ level lots, so it makes sense (in one way) why people are drawn to that spot on the water. In Fontana, there’s a new build on the hill above the lake, but it isn’t lakefront, so it shouldn’t count. No matter, you’ll still see it from your boat this coming summer.

The lakefront has plenty of new construction, this you can see. But I’m not thrilled with much of it. There are large, awkward houses being planted on lots that just can’t support that sort of heft. We don’t have any architectural approval committee for the lakefront, and in some ways, that’s a positive. But in other ways, it sure would be nice to have a panel to look over these builds before they rise. I dislike the trend of splitting lots, perhaps unless those lots are at least 200′ in width. The issue I have is when smaller lots are created out of old plat standards. The houses that tend to be built on the smaller lots rarely fit the neighborhoods. They aren’t cottages. They’re monstrosities looking to maximize living space and minimize neighborhood charm.

Even so, Lake Geneva is continually improving itself, and one day, we’ll look around and have nothing left to improve. If you’re a fan of this lake and wish for it to remain intact long after we’re all gone, you have but one aim. Root for less density. Root for fewer associations.  Fight against keyhole developments (much like the one proposed for Basswood last year).   It’s easier to knock down charm and replace it with mass efficiency, but is that what’s best? I don’t think so.

2018 Lake Geneva Lakefront Year In Review

2018 Lake Geneva Lakefront Year In Review

The year just ended was, by most accounts, a good year. But that’s a silly way to describe something as diverse and unique as a year. That’s like booking a table at Alinea and after four hours and 20 courses you take to your social media account to describe the meal as “good”. That wouldn’t happen, and that’s just a meal. How much more deserving of proper critique and detail is an entire year of our lives? Now that I’ve built this thing up, let’s dumb it back down and talk about the lakefront market in 2018. The year? It was pretty good.

We started 2018 with light inventory, just ten lakefront homes were available at the onset of 2018, and that limited inventory forced me to worry about what the year was going to look like. I knew there were buyers, plenty. I knew we had pending sales to give us a nice start to the new year. And I knew the stock market looked stable on the heals of a Federal tax cut. But what I didn’t know was how much more inventory we’d add, and how firm the buyer’s resilience would be if we didn’t add enough inventory.

That’s what matters, after all. The buyers.  See, a Lake Geneva lakefront buyer is generally only a Lake Geneva lakefront buyer. But that motivated dedication only lasts for so long. If you have a buyer and they can’t find what they’re looking for, they’ll wait, for a while.  They’ll come up to look at a lame new listing, and then they’ll come up again to look at another lame new listing. They’ll stay engaged, because the lakefront life is the life they want to live. But after time, that passion erodes into frustration, and frustrated buyers have a tendency to wander. Why spend so much effort waiting for a perfect lakefront on Geneva when Michigan has a whole state full of average vacation homes?

I know, and you know, and that buyer used to know, that a Lake Geneva lakefront is not like any other lakefront. But desperate times call for desperate measures, and I worried that the desperation of 2018 would lead some buyers astray, and no doubt it did. But the year just ended with 23 lakefront sales (24 with the vacant lot included), including two in the South Shore Club and one in Buena Vista (technically not private frontage). That number is down from the 2017 total, but considering the limited inventory, that number is a terrific total.

In all, we printed 2536 feet of lakefront shoreline, up from the 2017 total, but less than the 2016 total of 2882.  That includes one lakefront vacant lot on the North Shore. We sold just over two million square feet of lakefront land mass, and more than 115,000 square feet worth of living space.  Prices ranged from $11,250,000 for a North Shore estate, to just over $1.1MM for a Walworth Avenue cottage.  For my involvement, I ended 2018 as the number one individual agent in Walworth County yet again (per MLS), with more than $35,000,000 in closed transactions, so that’s nice.

The lakefront loves its price per foot (PPF) measurement, that is, the total value of lakefront sales divided by the total amount of lakefront feet sold, this we all know. You should also know that I don’t love this measurement, as it really only seems to apply to lakefront homes in the 100′ range.  200′ lakefront lots experience compression of the number, in the same way that lots under 100′ tend to overachieve. We ended 2016 with a PPF of $27,193. We ended 2017 at $27,578. And after the activity and bustle of 2018, we finished the year at $27,684. For the buyers who think this market has spiraled upward and out of control, consider those numbers. Does that seem like unsustainable, unwarranted price growth?

For 2018, we’re going to look a bit deeper at the numbers. We know our market was skewed by the $11,250,000 lakefront sale, that of 415 feet of frontage and almost 20 acres. We had an average number of entry level lakefront sales last year, closing four lakefronts under $1.7MM.  The remainder of the lakefronts fell into somewhat familiar price categories. Let’s throw out our outliers at the high and low of the market, and pull our 2018 numbers from the remainder of the lakefront transactions.

With that in mind, our PPF figure for 2018 actually goes up, to $27,994.  If you look at the purest way to measure the accuracy of that number, you needn’t look further than the 100′ vacant lot that sold on North Shore Drive last summer. That 100′ sold for $2,750,000.   That’s easy justification of the average. But there’s more to the lakefront than a basic price per foot tally, there’s also the average price per square foot of the structures themselves, as well as the price per square foot of total land mass. For these two figures, we’re going to keep with our habit of throwing out the high and low 2018 outliers, as well as the South Shore Club sales and the Buena Vista sale, as these are not true lakefront sales (even though the market treats them as though they are).

2017 registered an average housing price per square foot of $560. 2018 pushed that average up to $625. For the overall land mass statistic, we had a 2017 average of $58.09, whereas 2018 just printed a $51.66 average. Does that mean the value of lakefront land actually decreased in 2018? Of course not.  None of these metrics individually tell the story, which is why to judge the performance of our lakefront market you need to figure and consider all of them.

Today, there are just nine lakefront homes for sale on Geneva. If you remove the Fontana home that has shared frontage and a shared pier, and you remove the Trinke property that has a lagoon between the home and the lake, then you’re stuck with just seven true lakefront homes on the market. Of those, the least expensive is listed over three million dollars. Not cool if you’re a buyer. But if you’re a buyer, I have some good news for you in 2019.

The recent tumult of the stock market is a difficult situation for the lakefront market. Rising interest rates don’t bother us very much, but a decline in invested assets does. With this in mind, our stable of confident lakefront owners will find a few who dislike what they see, and those few might offer up some inventory that will appeal to the 2019 buyers.  To be certain, there are plenty of buyers still. The low inventory of 2018 didn’t scare away everyone, though I’m sure there’s some guy sitting at his Michigan vacation home this morning what it is that he’s done. Pray for this man, and his family.

I’m anticipating inventory will increase in January, and you’ll see reduced prices in a few of the 2018 carry-overs. Most sellers don’t care if the market slows, but again, if you’re a buyer, you’re not concerned about most sellers. You’re concerned only about the position of the seller who owns the home you’d like to buy. 2019 is going to provide inventory, and for the buyers who have been waiting, the question will be how the seller prices line up with buyer expectations.

I think buyers will be a bit more shrewd in this new year than they were last year, but I have a bold prediction to make: 2019 is going to be just fine. We’re going to sell lakefront homes. The market is going to provide inventory. We’re going to end 2019 somewhat flat in terms of valuations and volume, but flat is just fine with me. Flat, in fact, is good.

The stock market is going to either go up or go down, but one thing will remain.  People want something more. They want a place that means something to them, and to their families. They want to enjoy their wealth.  We can’t buy more time, and while I’m also sad that my Apple stock has cratered, that isn’t going to keep me from wanting to enjoy my family and enjoy this place. And I’m betting I’m not alone, because what you see below isn’t something you can replicate in the city or the suburbs.

Lake Geneva Inventory

Lake Geneva Inventory

In real estate, you either win sometimes or you lose sometimes. There is no such thing as winning or losing. You’re winning, a bit. Losing, a bit. Both, often, at the same time. That’s because you don’t have one boss, or two, you have dozens. Or more. They come and they go, they’re not your boss forever, usually.  This is why I can be both hero and villain on the same day. In successive phone calls.  Winning and losing, in the same breath. The goal of the real estate agent is to win a couple more times than you lose. To chalk up a few on the good side, to offset all of the ones on the bad. In 2018, I won quite a few, and it’ll mark my ninth straight year of winning more than I’ve lost. But don’t be confused, I’ve definitely lost.

In my case, those losses look like the homes that I haven’t been able to sell-yet. They’re the inventory pieces that didn’t quite work out- yet. They’re the sellers who have likely grown tired of me, but not quite completely tired of me- yet. With that in mind, here’s a run down on the scant few pieces of personal inventory that I haven’t been able to sell-yet.

If you’re looking for a condo on the lake, there’s really no better idea than this Bay Colony unit. It’s on the ground floor, which matters, a lot. You have a private outside entrance, so you don’t need to schlep your groceries through a common entrance and down a common hallway that may or may not smell like re-heated brats and mustard. The unit is fabulous. Obviously, tremendously, unavoidably fabulous. It’s easy to own, easy to use, and as luxurious as any hotel suite, assuming you’re staying at the suite with two bedrooms, two baths, a boat slip, lake views.  Reduced to $799k, far below replacement cost.

 

If you’re searching for a lake house, but need a bit more flexibility than the condo can offer, then this property in Glenwood Springs is for you. This isn’t just some cottage by the lake. It’s the nicest cottage by the lake you’ve ever seen. Fully and outstandingly dialed, this Fontana retreat is finished to the highest standard. Four bedrooms, four baths, private pier (with shore station), lake views, and appointments that you just can’t find in this market in this price range. $1.295MM and your weekends will never, ever, be the same.

You won’t be surprised to learn that horses aren’t really my thing. And equestrian properties West of Walworth aren’t usually my thing, either. But this property was too interesting for me to turn down. 250+ acres. Woods, prairie, pasture, crops, river and hills. Swimming pool, tennis court, two guest houses.  Stables and indoor riding arena, offices and more. This is a world class equestrian facility, yes, but you needn’t be a horse lover to find interest in this property. It’s a sportsman’s paradise, and it offers a rare assortment of features that you’d be hard pressed to find anywhere else in this market.  $2.499MM

My newest listing, 389 North Lakeshore Drive in Fontana, hasn’t sold yet, either. But it will sell. Why is that? Well, because it sits on  a most lovely piece of lakefront right in the heart of Fontana, and the house itself is one that you’d be hard pressed to replicate for the sales price.  The lake loves new construction. It craves new construction. And it also features a host of owners who have spent fortunes in the hunt of that new construction. Why would you entertain the aggravation and time-drain of a new build when you can buy this nearly-new home and move right in? That’s right, you wouldn’t. $7.895MM

Speaking of new construction, my magnificent estate on Basswood is still, as of this moment, unsold. That’s a shame, really. We’ve done the hard work of reducing this price to the point where it now makes sense for an upper bracket buyer. 214′ of level Basswood frontage. Swimming pool, guest house, immaculate grounds. This home was built in the early 1990s and could be used immediately by a new family, much in the way that the current family has used, and loved, this unique property. Or you could buy it and renovate and when the last window treatment has been hung you could be all in for far less than it would have cost to build new, and in far less time. $8.495MM.

Bluff Lane Sells

Bluff Lane Sells

Bluff Lane is a nice little dead end street on the south shore of the lake. In spite of its small nature, this street has been a near constant source of inventory for our market over the last several years.  My listing at N1939 Bluff has been for sale since the middle of 2017, first with another broker and then with me. It was a nice house, offering the sorts of things that most similarly priced houses in the 2018 market just can’t offer. In that, the house was complete. Five bedrooms, three finished levels, 70+ feet of frontage, a huge pier, perfectly landscaped grounds and a two car garage.  I closed this listing last Friday for $1,950,000, but like all sales, there’s a bit of a lesson here.

When the property was first introduced to the market in the spring of 2017, the price was $2,295,000. That seemed a fair target for a house that offers so much by way of living space and amenities. The market was interested, but after several months the property failed to sell. There was at least one offer during that listing, maybe more. Then, I took over for the prior broker and put my angle on the listing. Another offer, but no dice. The price was adjusted downward in small increments. Then, this fall, another offer. A contract. But that deal failed to close. Finally, a new offer from a new buyer who saw the value in this property, but only at a price that made sense to him.

After 16 months of marketing effort, the property sold for $1.95MM. That’s no unique surprise, since several of the other offers that were received settled in a similar range. Try as we did, we weren’t able to get that sales price to $2MM. That was the goal, after all, to make or beat that benchmark.  In spite of this goal, the property just wasn’t able to push a sales price to that $2MM level. Was it  the house? Was it the interest rates? Was it the stock market? Was it the street?

Nope. It wasn’t any of those things. It was simply the reality of a property seeking to sell for $2.195MM. To understand why this property struggled, you must understand the typical buyer and the different price levels that separate groups of buyers. There are buyers that will pay $1.9MM for a house. Lots of those sorts of buyers, actually, each one successful enough in their regular life to pursue this vacation life. But a $1.9MM buyer is often a buyer who would love to spend $1.7MM or less. A $1.9MM buyer is often a $1.5MM buyer who found a bit more motivation to take on a bit more risk.

On the north side of $2MM, there are very few $2.1MM buyers. There are upper $2s buyers, those who might feel comfortable at $2.4MM but would reach to $2.9MM for the right house at the right time in the right location.  But there are very rarely buyers who place a hard cap on their search at $2.1MM. In understanding the demographics and the price categories that most buyers align within, we can make more sense of the Bluff Lane sale.

Was it worth $2.2MM? Sure it was. But a $2.2MM buyer is often a $2.5MM buyer, and if they spend a little more they often find a property that more closely resembles their weekend dream. When the dust settled and the property closed, it closed as it likely should have. For $1.95MM, to a buyer who found his way to the lakefront at a price that made market sense for both buyer and seller.  To the seller who allowed me to represent this fine lakefront home, I’m grateful.

Lake Geneva YTD Performance

Lake Geneva YTD Performance

When you’re part of an industry that puts significant focus on calendar year performance, you tend to look up in late October and realize you’ve run out of time. In the same way, I have a theory that I gladly share with dinner guests and random acquaintances, but this theory has to do with life and not real estate. The two, no matter what your agent says, are not the same. My theory supposes that when a man, or a woman, is in their late 30s, they are no longer about to be something. They are no longer going to do something. They are no longer on their way to some different goal. In your late 30s, when you look in the mirror, you likely are what you are. Some people find this depressing. I find it oddly comforting. When the 2018 real estate market looked itself in the mirror this morning it wasn’t about to be something different. At this late date, 2018 is what it’s going to be.

But what has 2018 been, exactly? When the year began, I was worried. Worried about the stability of the stock market, worried about inventory, and slightly worried about interest rates. If the first two caused were gaping knife wounds of worry, the last one was a paper cut, and not one of those finger tip ones, either. If sellers wouldn’t sell into this market, then buyers would slowly lose patience, and they’d either jump ship and run with their tail between their legs to Michigan or some other terrible place, or they’d just hunker down in whatever it was that they already owned and wait for the inventory to arrive. At this point in 2018, the inventory did arrive, but it didn’t exactly satisfy the masses of buyers.

Still, inventory presented and then inventory sold. Some aged inventory sold as well, and it this late date in 2018 we’ve closed 20 lakefront homes with three more under contract as of this morning. The only three lakefront homes under contract (per MLS) are all my listings, which is nice. For context on that lakefront performance, consider YTD 2017 we had closed 24 lakefront homes. Does that mean the market has slipped? Of course not. It just means 2017 offered more inventory to choose from. The better context is to look back to 2012, the year that marked the low point in our recent cycle. YTD 2012 we had closed just 16 lakefront homes, and that had little to do with inventory and everything to do with worry.

The broad vacation home market, those homes with lake access with typical pricing between $200k and $1.7MM, has had itself a solid year as well. Inventory deficiencies plague this segment as well, but in spite of that concern we’ve managed to close 58 lake access homes in 2018. An additional 12 are under contract as of this morning per MLS.  The condo market is fairly similarly well, with 31 YTD sales of condominiums possessing lake access to Geneva. This is a vague measurement, as it includes some bits of inventory that I wouldn’t normally consider when adding up these totals (like dockominiums, etc), but it matters if we’re just assessing the overall volume performance of the segment. YTD 2017 printed 34 sales, and YTD 2012 had closed 30.  Keep in mind, this is including Abbey Springs and others, so it isn’t a pure measure of the lakefront condo market performance.

Speaking of that lakefront condo market, it’s moving quite nicely at the moment. There are two lakefront condominiums under contract as of this morning, leaving just 8 true lakefront condo units on market.  As we steam towards the end of 2018, expect to see some sellers following the move of my Bay Colony seller, as price reductions hope to tempt buyers towards a few pieces of overlooked inventory.  My Bay Colony listing, by the way, is now $799k, with a slip and likely the most high end interior space of any condominium on Geneva lake, excepting Stone Manor, of course.

Expect inventory to remain low through the end of the year, but don’t be surprised to see some new bits and pieces come to market over the next 30 days. Price reductions should increase over the coming two or three weeks, and the market will wind down by printing much of the remaining pending sales. 2018 has been a good  year, and looks to leave us staring at 2019 with an eye on the stock market, and the hope for new inventory.

Above, my Bay Colony offering. $799k for so much lakeside luxury. 

389 North Lakeshore Drive

389 North Lakeshore Drive

There are three things that attract people to houses. Yes, there are renters who rent based on price and convenience, those who say they won’t be pinned down, won’t be tamed. But for the rest of us, the regular people, houses simply attract us. The reasons are many, sometimes bold reasons like colors and sometimes nuanced reasons like the way a front door beckons when you first pull into the drive. But really, there are three main reasons that houses either attract us or repel us.

Lake Geneva Lakefront Homes For Sale

First things first, there’s the approach. Curb appeal,  some would say, but that’s assuming you can see the house from the curb. The approach itself matters to homes, which is why homes have gates. It’s not to keep people out so much as it is to provide a visual enticement that something important lies beyond. If I had a gate on my house, no one would stand out front and wonder who lives inside, but they might stop and think there must be something slightly interesting back there.

The lot itself, that property beyond that gate, the trees and the grass and so many boxwoods. How is that lot? Is it wide enough, deep enough? Is it hilly or flat? Does it catch my interest. And if I’m looking towards something, what is it, exactly? Just more trees? Too much grass? Basic landscaping, or elevated landscaping? A path to the lake that feels right, or a path that feels like the owner gave up on the project long before every making her way to the shore?

That lot, where is it, exactly? Is it on the side of a busy road? I was driving with my kids last week and reminded them that under no circumstance shall they ever purchase a home adjacent a busy road, to say nothing of an actual highway. The reasons are obvious, but mostly because there is never an actual reason to do so. The nuance of the front door positioning on the house and the quality of the backyard is meaningless if the house faces that busy road. The lot, the thing that we need as much as a leak-free roof and some hardwood floors, is the single most important part of home.

Lastly, it’s the style of the home itself. Tudor or Cape Cod, Colonial or Mid-Century? What suits your style? Moreover, what suits the style of your market?   A recent plague on construction in this immediate area has no real symptoms except a general lack of consistent style. If the home is to be traditional with a twist towards modern, like Michael Abraham might encourage, that’s terrific. If the home is traditional to the core, with bold, classic finishes, that’s fine as well. There is no error in design as long as the design is consistent. But whether or not that design attracts the interest of buyers and passersby alike depends on the style itself.

With those aspects of desirability understood, I introduce  389 North Lakeshore Drive in Fontana. Where is it? Along the curvy, wooded road that bends and whispers from Fontana to Williams Bay. What’s there? Only some of the most beautiful newer homes on the lake, mixed with some of the traditional homes that effortlessly anchor our scenery to the past. The approach is as it should be: A simple gate with no pretension.  The entrance drive turns through the trees, past a fitting four car detached garage because who would want a lakefront estate without room for a few extra toys?

The home itself is more than 10,000 square feet of turn key efficiency. There’s a main floor master suite, dressed in marble. Upstairs you’ll find five more bedroom suites including a bunk room that’ll hold nearly everyone you know. On the lower level that walks out to the water, there are two more suites, a theatre room and a screened porch that does double duty as a summertime gym.  What’s more, this home is nearly new. Finished in 2013 by Orren Pickell, this shingle style home doesn’t waiver from what it is.

What is it? It’s a shingle style home on 2.4 lakefront acres built recently to exacting standards and elevated for a hassle free lakefront experience by the current owners. Where is it? It’s on the North Shore of Fontana, with views long and wide, a short stroll to Gordy’s and Chuck’s even while the home and property feel tucked away and secluded.  What does it look like? It looks like the sort of house you’d build if you were in the market to build a new house here. But why would you do that when this home is here, now, available and practically perfect? $7,895,000

Entry Level Lakefront Market Update

Entry Level Lakefront Market Update

I’m not sure if there’s a more interesting segment in our market than the entry level lake access market. While other segments exist because particular homes move in and out of that defined value range, the entry level market is truly the only range for which their is no defined price structure. When times are good, entry level might mean $1.5-2MM. When times were bad, we learned that entry level meant $800k-$1.2MM. If we look over any particular decade in our past, there’s nothing consistent about the pricing of this segment. In that, it’s a curious segment, but beyond that, it’s also our most important lakefront segment.

Yes, yes, we know liquidity at the top end is the most unique attribute of our market. We know our liquidity makes every other vacation market in the Midwest look like a low quality timeshare rental. But still, in spite of that robust upper bracket strength, the entry level market is the market that matters to more people. The goal of vacation home buyers, if the budget affords, is to find lakefront.  Knowing that the entry level market is directly connected to the upper-end off water market, we know that if the entry level market struggles then the off-water market struggles. If the off-water market is strong, then that must mean that not only is the entry level market strong, but it’s light on inventory. These two markets are connected, and 2018 has proved that once again.

This isn’t about the off-water market, even though it is remarkably strong and liquid as a direct result of the low inventory and sales patterns of that entry level lakefront market. This is about the entry level market itself, and what 2018 has done to it, and for it.  This year, there have been four lakefront homes sold between $1.1MM and $1.25MM.  All four of those properties had around 50′ of frontage, and three of the four were on Walworth Avenue in Williams Bay. If you’re familiar, Walworth Avenue is the road to the North of Pier 290. The other sale was in the Elgin Club.

The fact that there have been four sales in this segment isn’t surprising. It is somewhat surprising that the prices, in spite of the spectacular market activity of 2018, have been somewhat stagnant in that tight, low buck range. While the homes that sold were certainly habitable, it wouldn’t be a stretch to suggest that they are all in need of some additional attention. Whether that comes in the from of wide-scale renovations or surface improvements, that is up to the new owners. Will any of these four be scraped to make way for a new home?  No one, except the owners, can answer that question.

Walworth Avenue hasn’t shown any real strength over the mid-million dollar market. There’s a giant newer home on that road, one that represents a significant investment, but is that an individual pursuing what is best for that individual, or is that a market market-minded play? Will Walworth Avenue soon be home to more tear downs, to more new construction? And if so, will that new construction find favor in the market?  I honestly don’t know the answer to my own questions. I’m inclined to suggest that new construction in that location wouldn’t be a wise play. But I know the tight inventory markets on the lakefront between $1.8MM and $2.5MM, so it wouldn’t be crazy to suggest an owner could pursue new construction here, even though the neighborhood hasn’t shown the ability to support it.

There have been a few other happenings in the entry level market this year, notably a pending foreclosure in the Lake Geneva Highlands and a private lakefront sale on Outing Drive. You’ll remember the Outing house, as I had it for sale earlier this year, and another agent had it for sale for a spell as well. The home sold in what appears to be a private sale for a price (as shown in the transfer rolls) of  $1,525,000. That’s a reasonable price for that house. The Highlands lakefront is one that was on market last year and under contract (per MLS), but failed to close. That home is likely valued in the mid $1s, and I’ll be curious to discover if it comes back to market as REO, or if someone takes a stab at it through the sheriff’s sale.

Today, the entry level market is once again void of inventory. The lowest priced home with frontage is over in Trinke’s, a property with the lagoon in front of it, priced at $1.85MM.  The next available lakefront is to the East of there, priced just over $2.2MM. This is a tight market, and a difficult one for would-be lakefront buyers.  What’s interesting here is that the lack of inventory and consistent sales really hasn’t translated into valuation gains in this segment. I’d expect that’ll change if the market stays tight for too much longer. Maybe it won’t change at all until someone breaks the pattern on these entry level streets and builds something new. Something that seems out of place, something that doesn’t make sense. Or at least it’ll feel that way until everyone else does it, too.

 

Cedar Point For Sale

Cedar Point For Sale

A couple of weeks ago, I started working on a new listing.  This lakefront house was in Cedar Point, on the very top of the point, where the view is as wide as it is long, where days last and last, where sunsets, no matter the season, cannot hide from view. The house was to be listed at $2,595,000, and I was ready to work on the sale. Photos were scheduled, details were arranged.

But then it rained. And it rained some more, and when it wasn’t rainy it was misty, which would be a terrific name for a horse. Photos were scheduled and the schedule changed. The weather didn’t cooperate. But in the mean time I told a couple of buyers about this house, and before the photos could take place, before the MLS listing could be set to ACTIVE, before all of those visible sales efforts could commence and before most agents knew about the property, the new listing on the hill went under contract to a buyer who knew he needed to be in the know. It’s in the MLS now, but it’s already sold.

Buena Vista Sells

Buena Vista Sells

It’s a curious thing to watch buyers as they watch the market, and the houses that exist inside of that market. Buyers are attracted to various things, to shiny, for sure.  They like marble and they like glitz, and even the most staunch defenders of Location First cannot help but be dazzled and drawn by the varying shapes and sizes of housing perfection that exist here. But beyond those things, there are locations that speak to buyers in different ways. One buyer might find a location to be busy, dense.  One buyer sees that scene and they decry their lost privacy, their potential involvement with their neighbors, their exposure. And yet another buyer comes to that same scene and feels at home. They feel at peace with those same surroundings. They thrive off of the activity, the proximity, the scene. To each his own is just a saying, until you come to these shores, at which point it becomes a most steadfast rule.

This week I closed 274 Sylvan in Buena Vista for $2,775,000. The house was special not just because it shared that glamor of sparkly hardwood and expensive appliances. It was a vintage home made to live like a modern one, but still filled with the original touches that made it feel rooted on that shore.  Buena Vista isn’t an association for everyone, but that’s only because there wouldn’t be enough houses to go around. There are tennis courts, an ample lakefront park and pier system, and then these scant few lakefront houses. A dozen, perhaps. These few lakefronts on this Northwest shore of Fontana Bay offer a classic lake experience combined with dynamite views of the lake and an easy stroll to Fontana’s lakefront scene.

To speak to the unique nature of this now sold offering, consider the last MLS sale to come to market here was this same house, when I sold it in the spring of 2011. Who can know when the next Buena Vista lakefront will come to market?  Like every lakefront sale on this lake, once a property is under contract or sold there are numerous buyers who wish they had bought it, and this home had its fair share of regret filled buyers. That’s because it wasn’t just an old cottage on the lake. It was an old cottage with a recent addition and important updates, but it still oozed that vintage appeal. That appeal isn’t easy to find on this lake, especially if you’d like to find it in Buena Vista. To the owners who allowed me to represent them in this sale, I thank you. To the new buyer who gets to enjoy their weekends in an entirely different frame of mind, congratulations.

Lake Geneva Realtors

Lake Geneva Realtors

There’s nothing that makes me hate my chosen profession more than leafing through a local glossy magazine. There are lots of glossies here, most notably that Summer Homes For City People glossy. That’s a heck of a magazine, but you knew I’d say that.  In spite of my magazine being the only magazine of importance and relevance, there are others that persist. I made the mistake of thumbing through one of these magazines over the weekend, and what I discovered left me weary for this business of real estate.

The issue isn’t Realtors, themselves. They’re fine, really. The issue is advertising. The issue is what we choose to say about ourselves in the hope that someone will believe us. The glossy I read through featured heaps and heaps of advertisements for brokers and their Realtors, and I thought I might lend a bit of MLS based fact checking to the advertised claims.  I’m all for self promotion (see: this blog, my magazine, my life, etc), but there’s a reason why my self promotion is heavy on specifics: I want to be taken seriously.

Without further ado and in no particular order, the ads I stumbled upon:

One claimed 33 reasons why a brokerage is super amazing. I did some research this morning and found that the Walworth County average closed sales (2018) for those 33 particular reasons was $1.67MM. For perspective and context, during 2016/2017 I averaged over $4MM in sales, per month.

Another ad, this one really fancy looking. The agent has been closing lakefront deals on Geneva, since quite a long time ago. Some MLS searching to provide background on the advertisement revealed that indeed this agent has put together single family lakefront deals on Geneva. Four of them, in total.  I, also have closed a few lakefronts on Geneva. 48 of them since 2010, and more before that, but alas, I don’t even have an ad in the magazine.

There’s some mention in other ads of agents winning awards from their companies. Watches, gold circles, platinum things. This is nice for these agents and their host companies. One such company gives away a watch the first year you sell $10MM with the company.  I sent an email to the company asking if I’d qualify for 4 watches for 2017 based on my production, of if I’d be capped at just one watch. (I jest)

Ooh, here’s another ad. This one is sleek. Super sleek.  This agent sells lots of houses that afford the lake lifestyle. To review the claim, let’s look through the MLS…. That agent has sold one home with lake access or lakefront on Geneva this year. One.  This does not make for a terrific year, but it does make for a great ad.

There’s no need to go on and on, as I think you have likely grasped my concern. As a consumer in the market you’ll need to figure out which agent you should use to represent you. Sadly, the lakefront market on Geneva is hot, which is attracting more and more agents to the lakefront fray. You can’t blame them, as it’s the biggest pie and everyone longs for a slice. Unfortunately, no matter what the ads say, not every agent is a lakefront specialist. Not every agent has success in specific market segments. If you’re an agent and you do a  terrific job selling in Geneva National, then put that in your ads.  I have a horse farm for sale (it’s amazing, really), near Clinton, Wisconsin. The fact that I have this farm for sale does not make me an Equestrian Property Expert.

This morning, it’s just another reminder, I suppose. If you need an attorney to help with your Last Will, please don’t hire a personal injury attorney. If you need a mechanic to replace your timing belt, don’t drop your car off at the bicycle repair shop. If you need a Lake Geneva area Realtor to help with your purchase or your sale, choose an agent with a pattern of success in the specific segment that has your attention. If you’re looking for a Realtor to assist you in Des Moines or Hinsdale, do the same.

Lake Geneva Market Update

Lake Geneva Market Update

It would be disingenuous for me to pretend that we’re in the middle of another Lake Geneva summer.  August is the peak of summer, sure, but it’s not exactly the middle. You could argue that it’s the end. School starts soon. The sun sets earlier and earlier each night. We’re no longer building toward summer, we’re doing our best to hang on to a summer that’s rapidly fading. In spite of our dwindling summer, the real estate market at the lake has given us something to talk about.

June and July were fantastic months for our lakefront and lake access markets. That late June through early July heat and the supporting sun pushed this market into hyperdrive, with contracts piling up like so many rock bass in my Uncle Joe’s five gallon pail. June and July saw five lakefront closings, and ten more lake access sales. The lakefronts that closed included a few bits of aged inventory as well as some new to market listings.

At the top end, the old Born Free Estate closed for $5.35MM. The new owner then promptly sold off a 100′ lot on the East side for $2.75MM.  I’d expect to see a significant renovation of the existing home in the near future.  Another high priced sale occurred on Basswood, that of the Woodhill Estate, which printed at $3.9MM. That’s a reasonable price for that property.  The market had a hard time figuring out if that home was a tear down, but the rumor is the new owner plans to renovate the existing structure.

On the lower end of the lakefront, a home in the Elgin Club closed for $1.245MM, likely a tear down or significant remodel candidate.  In Williams Bay, another home closed on Walworth Avenue where those thin 50′ lots rule the day.  That street featured two sales this year, both in the $1.2MM range, both side by side. I sold those homes back in the very early 2000s. This time around, both homes have sold to the same owner, leaving speculation that both homes might be torn down to make way for one new home. While that buyer is not my client, I’d offer up this unsolicited advice: Don’t do that.

Pending contracts on the lakefront as of this morning include a listing for $2.4MM in the Geneva Manor, a piece of aged inventory in the South Shore Club ($2.795MM) and my listing in Buena Vista on Sylvan ($2.875MM).  I’m guessing the Geneva Manor property will print at a meaningful discount to that lofty ask. With buyer activity at all time highs (far exceeding the activity during the 2005-2008 run), I’d expect to see many more contracts this month on the 17 active lakefront homes.

While these are nice sales and nice new activity, the property that’s on track to shock the market is the lakefront home at 590 S. Lakeshore Drive in Lake Geneva. This listing came to market earlier this summer for $14.5MM, with 210′ of frontage and above grade square footage of 9862 according to the assessor’s office. The property, as of yesterday, is pending sale. I’ll repeat, that property, listed at $14,500,000, is under contract.

I’m betting the property is going to close somewhat close to its asking price.  That’ll make it the highest sale in Lake Geneva history, which will be the third time in the past 24 months that this benchmark has been raised. This magnificent upper bracket run started in the fall of 2016 with my $9,950,000 print of this fabulous Pebble Point home.  The home at 590 has a current assessed value in the $5.75MM range, with a $117k tax bill. Assuming a print in range of the asking price, it won’t be a surprise to see the new owner receive a tax bill in the $250k range. So that’ll be something.

At first blush, this sale is terrific for our market. It further proves that this market has no rival in the Midwest. Other resort markets will gladly take your millions of dollars in exchange for a second rate vacation home experience. Geneva will take your millions and then, when you’re ready for another chapter, give you those millions back. Likely with interest.  Clean water and beautiful homes might be the obvious allure of this area, but liquidity is our greatest asset here, and this sale proves it once again.

But this sale also showcases the premium that our market places on newer construction. This home was not new, but with a completion date of 2009, at least one buyer figured it was new enough. Older homes on the lake that have not had recent updates are punished here, as buyers prefer to either buy new, or build new. That preference opens up a value play for buyers looking to make their mark on these shores, if only they’d be willing to undertake a remodel of an outdated home.

The market is in the middle of a most epic run, but I still see value out there. It’s not found in spiffy fixtures and Wolf ranges. It’s found in the land, in those piers, under that ugly carpet and behind that stupid basement powder room. It’s not obvious to the uninitiated. That’s why I’m here. To help guide the discerning. Consider the text message that I received last Saturday night (I posted this on my Instagram genevalakefrontrealty, which you should be following):

Tonya and I just said… Thank God Dave Curry talked us out of buying all those other stupid homes. Love this place. Hope summer is going well for you and your family.

If you’re in the market, you’ll know it isn’t hard to find a Realtor to talk you into something. That’s what everyone does. The real value that an experienced agent brings to the transaction is not in his or her ability to walk you through a house. My 12 year old daughter could do that, and she’d be terrific at it. The value is in finding an agent who cares enough about your purchase to talk you out of a property. If you need some better advice, let’s talk.

Loramoor Sells

Loramoor Sells

Most of the players in this game are endless and unflappable cheerleaders.  I did this! They say. I’m amazing! Others chime. Such is the business of self promotion. Without this promotion, no one would know anything about any of these players.  Aside from a news article once in a while, no one will spend much time considering your success. In the real business world, this is fine. To quietly go about mining dollars is the preferred way, but alas, the rules of this game do not allow quiet success.

I engage in this self congratulation often. I write this blog to educate and entertain, but also to make sure the reader knows which player in this game is indeed the most meaningful.  Heck, I write a whole magazine dedicated to this market, and as a fortunate aside, this player. Some pose with their real estate signs as though they’re prom dates, others plaster their names on their cars, while others still want to watch you while you grocery shop. No matter the platform, we’re just playing by the rules.

But sometimes, there’s no praise to be given, no praise to be asked for. There’s just a sale and a seller and a buyer, and that’s that. This is what happened last week when I finally closed on my aged listing off of South Lakeshore Drive. I first listed this home two years ago, and throughout that time I asked for listing extensions and price reductions more than I’d like to admit. I worked to sell this house, and ultimately I did sell this house, but I did a miserable job at it.

The market is, by all accounts, back to the prior market peak. In many instances, prices have pushed above that peak. Now consider this house that I just sold. It previously sold during the prior market escalation for $1.5MM and change. I just closed on it last week for $925k. That’s a terrible thing, and while I feel relieved that the property is no longer on the market, I know I was rather unsuccessful in selling this home.

The issue with the home was a complicated one. It wasn’t one issue at all, really. It was the perfect storm of trouble. First, a high prior print to chase. Second, an initial and subsequent list price (with another broker, by the way) that was sky high. After that initial list, the market was lost and the owner spent the next several years chasing buyers in the only way that actually makes a material difference: price reductions.  By the time I took over the market had written the property off, and while I thought I might be able to put some shine on the listing I ultimately failed at doing so. The price of $925k was a reasonable market price, but in this case, the buyer won.

I closed on another property last week, also somewhat of an aged piece of inventory. This was my vacant land listing in Loramoor. The lot was quite lovely, just one home from the water with slight views and proper lake rights through the East Loramoor Association. That lot was on the market for a year or two before closing last week for $625k.  In this market, that sale makes perfect sense. It was a nice market rate, with seller and buyer both doing well for themselves. Why would a buyer buy a home in a cottage neighborhood only to significantly renovate or rebuild it, when they could buy this lot in a high end neighborhood and be surrounded by high priced homes? Expect a new home to be built there soon, one that will likely make proper market sense.

These sales prove one important thing about the state of our market. As the lakefront inventory dries up (the lowest priced true lakefront home available today is my listing on Bluff for $2.145MM), buyers will look off water for reasonable values. If the cheapest lakefront is $2.1MM, it only makes sense that buyers in the low buck range will seek alternatives to sparse lakefront inventory. Expect this trend to continue for the foreseeable future, as off-water homes in the $900-$1.7MM range find favor with inventory hungry buyers.

Valley Park Lake Geneva

Valley Park Lake Geneva

My large lakefront offering in Valley Park is still available, though it probably shouldn’t be.  Compare this property to the newest lakefront listing on Geneva, priced at $14,500,000. That listing has 3.46 acres.  Valley Park has 6.9 acres. That listing, for $14,500,000, has 210 feet of frontage.  Valley Park has 211 feet.  That listing has a City of Lake Geneva tax bill. Valley Park has a Linn Township tax bill. If you’re a buyer in the upper reaches of our market, you’d be well served to consider my listing in Valley Park. It’s large, it’s ideal, and it’s ready for the next owner. Best of all, with the $9.3MM I’m saving you, the new house you could build would be stunning, and you’d have several million dollars left over.  Why buy someone else’s lake house when you can build your to own your exacting specifications for less?

On Average

On Average

A lack of inventory is a curious thing. On one hand, lack of inventory typically leads to pricing increases. This is obvious. If I have one of something and three people would like to buy it from me, I get to raise my price. Simple. But lack of inventory has an uglier, less talked about side. Like your uncle who isn’t allowed to attend family gatherings. Sure, you see him once in a while and pretend everything is fine. The weather fine, your job, fine. But you know. You know.

That other side of low inventory is that it has a nasty tendency to choke out market momentum. Imagine a particular market segment is like a fire. A nice, tidy, fire. Sometimes it’s crackling and blazing and other times it’s just smoldering, but it’s always burning so long as you add a bit of wood to it now and again. The key isn’t the strength of the fire, it’s your supply of wood. Keep feeding that market some inventory and it’ll keep burning. But limit the inventory for long enough and that fire is going to go out. Lack of inventory is all fun and games until your market decides to quit.

It’s not exactly like that, but it’s sort of like that. And in my world, sort of still matters.  We know our issue for 2018 has been a thorough lack of lakefront and lake access inventory, but without checking the actual statistics it’s just chatter.  The year is now old enough that we can measure it against another year. It’s time for 2018 to be judged.

From the first of January through yesterday, the MLS shows 28 sales of lakefront and lake access properties (Geneva Lake). Of those 28, 11 have been lakefront. That feels like a low tally, to be sure. And low it is, when compared to the 45 homes and sold during the same period of 2017. Of those, 11 were lakefronts. Looking farther back, 2016 printed 38 sales, eight of which were private frontage. 2015, the last year that could be considered some reasonable semblance of a buyer’s market, we closed 34 sales, nine of which were lakefront.

With those numbers in mind, it’s obvious that our broader lake access market is short of supply and therefore short of closings. But what of the lakefront, what of that king of all markets, that mighty ruler by which all other things are rendered unimportant? Well, the lakefront market, with 11 YTD sales, is obviously doing just fine. It has matched the 2017 production and exceeded both of 2016 and 2015. Maybe our inventory problem is one of perception?

There are a few things that are going to happen this summer on the lakefront. There will be more inventory. I’m certain of it. There will be more to choose from and there will be buyers intent on changing their boring weekend lives who make the right choice. The key isn’t to flood the market with inventory, rather to keep introducing pieces of it, slowly but surely. We don’t need to light the whole forest on fire, we just need to toss a log on every once in a while. And I’m fixin’ to throw some oak in the coming weeks (let me know if you’d like to know when I do).

Lazy Patience

Lazy Patience

It was good to be a buyer in 2011. And in 2012. 2013, too. We know that now. What a time! We think. If only I could have been a buyer then, say the buyers now.  But was it so great back then? Was everything perfect? I remember a buyer from the fall of 2011. He was worried about the 2012 election. Worried about the economy, or the economy as measured by the stock indices. He bought in the fall of 2011, and the lakefront purchase changed his life. But he almost didn’t buy and it almost didn’t change his life. It was good to be a buyer then, but it wasn’t easy.

If you were a buyer then and you didn’t buy, and in the days that have followed from those days to these days, I understand how you must feel. Shame is a powerful thing, but shame with equal parts regret is devastating. I have buyers today that tell me they wish they had bought. They wish they had upgraded. There were so many properties for so few dollars.  What an amazing market it was, they say, as if they were non-eligible bystanders during the whole show. I should have bought something. Anything.  That’s what a buyer of mine told me in a text last weekend.

Bill Shakespeare once said, “striving to be better, oft we mar what’s well.”  It’s no secret that I’ve built myself a small cabin in the middle of nowhere, on the road from Where? , just past Nothing, Unincorporated. I commonly bemoan what it is that I’ve done. I built something too small. I built it a bit too far to this side. I painted that a bit too blue. It was supposed to be gray. The shame is intense.  The deck isn’t finished, the patio never will be, and the gravel driveway is nearly impassable several months out of the year. There were some execution issues. It took two years to build a scant few square feet.

But it did get built. And I do get to sleep there. And when I drive down the road and fish the streams, I feel content. I say hello to the cows in the pasture and wish there was something I could do to help them get rid of those flies that pester and bite. I wander the farmer’s market once in a while, and buy something from someone who made it near there.  The process was painful, the execution questionable, the outcome reasonably acceptable, if full of concerns.  But I’m happy with it. Because it lets me hang my hat when I’m done with a long evening of casting tiny dry flies to wary, wild trout.

In the same way, last Memorial Day I sat lakeside and watched the show. It’s our show, after all. This is our thing.  After a dreary winter it’s easy to forget how much passive fun can be had while watching boaters boat. New boats, old boats, new boats made to look old.  Shore path walkers, some strolling, aimless in their amusement, others hiking, working, efforting. This place is unique, and it’s ours. On that day, was there any difference between the boater who has a Viking range and the one without? Was there any difference in the way that cool May water felt to the owner who has a small cottage a few doors away from the owner who has the larger home closer to the lake?

The great equalizer in the home search is found when you maintain focus on the true goal. If you want a nice house, just buy one in the city or the suburbs. There are lots of them for sale. Shiny ones with fancy things.  But those homes don’t get you any closer to what you want. To indulge in this place. To wake up Saturday morning in a different state with a different state of mind. A different state of being.

The buyers from 2012 who missed out largely did so because they wanted better. They wanted different. Something with a larger living room and another bedroom. A shinier kitchen. One more bathroom. What a tremendous mistake to hold your lifestyle hostage when the demanded ransom is something as trivial as square footage. Or a garage.  Today, buyers are doing the same thing. They’re deciding that an extra bedroom is worth another summer in the city. They’re choosing nothing over better, because they really want best.  I have buyers tell me they’re being patient. Being patient is easy. It’s finding motivation that’s often far more difficult.

Above, the entry at my Basswood estate listing. Now reduced to $8,950,000
Valley Park

Valley Park

Follow South Lakeshore Drive far enough from town and after some time you’ll be in the general vicinity of Black Point. But weave farther and deeper off of the known and you might be lucky enough to find Valley Park. Tucked away on the East side of Black Point, Valley Park likely isn’t a location on the lake that you know very well. That’s because it’s exclusive and slow to offer inventory, and that’s just one of the reasons Pier 630 is a property with very few equals on Geneva Lake.

This Valley Park estate represents a most unique opportunity on Geneva’s southern shore. With 211′ of frontage and two parcels combining for nearly 7 acres, this truly is a rare property. The lakefront home boasts magnificent lake views and includes six bedrooms along with five bathrooms. A highly sought after boathouse near the water’s edge and a four car detached garage provide plenty of toy storage. The three bedroom guest house was built in the 1990s by Jawort Lowell to exacting standards with a wood burning fieldstone fireplace, maple hardwood floors, vaulted ceilings and a delightful screened porch.

Often times, brokers and sellers will market properties as estates, even when we all know they are not. One hundred foot lots are nice, and one acre or two in depth is lovely, but does that constitute an estate? In a city setting, of course, but not at Lake Geneva. Moreover, a property with 150’ might be considered an estate, but what flexibility does the parcel actually offer? There is little that can be done with such a parcel except to build one new, likely beautiful, home. It’s not the screened porches or the pier that make these 211’ of South Shore frontage unique. It’s the possibility of a family compound. The possibility of future divisibility. Offered today with both tax keys and that glorious frontage and rare 6.9 acres in depth, this property will provide a buyer with the ultra elusive combination of wide frontage with significant acreage. New to market just in time for summer 2018. $5,195,000

Lake Geneva Market Update

Lake Geneva Market Update

It’s been a while since I’ve written a broad market update. It had also been a while since I felt the warmth of a bright sun on my skin. But yesterday fixed that latter absence, and today I’m sporting a proper spring sunburn. Sunburns are generally understood as being bad. Bad for your health, bad for sleeping. But an early spring burn, with just a slight sensation of sting, well, that’s something that everyone of our winter condition needs. It’s an event. A ceremony. A wonderful happening that signals the passing of winter with the emergence of spring. I don’t like sunburns, not one bit. Except in April.

The Lake Geneva vacation home market has endured quite a winter. Winter was fine, I suppose. It snowed a bit and it was cold a bit, but it didn’t snow a ton and it wasn’t cold all that often. That was winter. But March and April, the two months to which we generally assign some spring tendencies, they didn’t cooperate. The weather was awful. It was. Terrible, really. Rainy and windy or snowing and windy. Early ice out means nothing if the ice is replaced with snow. And so we endured. Showings were made and showings were canceled. Who could drive in this snow and that rain?  The market faced obstacles, mostly from the clouds above, and yet here we are. The market triumphed over so-called-spring, and is, today, poised to do some serious selling.

Because we’d be remiss to fail to recognize that the weather has indeed had an impact on our market. The market has performed valiantly, don’t be confused, but I can only imagine how much stronger the market might be today if not for the desperate grip of a belligerent winter. We’ve had sales, closings, showings, galore.  If I’m a buyer today, I’m worried. The market performed well in spite of the weather.  Can you guess how much better it might do if it were able to excel because of it?

Current vacation segment activity knows no limit. The entry level lake access market is active, with pending deals in Country Club Estates and Cedar Point Park. Country Club has had the hot hand of late, with buyers greedily gobbling up any bits of inventory, with few exceptions.  Further up the price scale, there are three off-water homes pending sale between $800k and $1.5MM. Those homes include one in Wooddale ($899k), one on Hunt Club Lane ($1.3MM), and the long-listed, renovated Loramoor home ($1.499MM). These homes are all fine in their own right, and each sale will ultimately make plenty of sense to me, and to the market.

There was a time back during the prior market cycle when the least expensive listing on Geneva Lake was right at $2MM.  If you liked that market, you’re in luck, because today there are just two true lakefront homes available priced under $2MM. The bulk of the lakefront inventory today is priced between $2-3MM, with several fine offerings in that mix. Some of those properties have been listed for quite some time, others are fresh to market this season.  My predictive qualities are quite refined, and as of now I’m going on a limb and guessing we’ll see two or three new accepted offers out of those nine lakefronts in that particular price range by Memorial Day Weekend.

There are two lakefront spec homes being built in Cedar Point Park. Both of those homes are listed at $3.85MM and both have been under contract since last summer. The first one is now finished, and just closed for full price. I’m not going to elaborate on these sales publicly (you should be working with me if you want to know what I think about them), but I’ll just state the obvious: this market craves new construction. It loves it. It needs it. It cannot live without it.  $3.85MM x 2 proves it.

The top end of the market has been quiet in terms of new inventory, and just two long-contracted deals remain to be closed. Those are of the Born Free property on the North Shore of Geneva ($5.75MM) and Clear Sky Lodge ($6.5MM) on the South Shore. Sometimes I randomly capitalize the shores to make them feel more important.  Both of those sales will be fine, though both feel somewhat pricey given their prior, recent sales prices. That’s $3.5MM for Born Free in 2011 and $3.7MM for Clear Sky in 2012 (I represented the seller in that sale).  Still, the market is hot and these two properties prove that appreciation over recent years has been, in some cases, quite impressive. The best remaining upper bracket offering is my Basswood listing.  Watch the video here   to remember what summer looks and feels like.

Inventory remains the biggest concern as we transition into the summer market.  This concern isn’t limited to the lakefront market, as there are lots of buyers in search of a reasonably priced ($500k-$1.3MM) off-water home with either a lake view or a boat slip. But the lakefront is the market that generates the headlines, and the lakefront could also use an injection of new inventory. What segment has buyers waiting? Um, all of them? There are active buyers right now in every price range, from $200k cottages in Country Club to $10MM lakefronts. If I’m a seller today I consider the market and wonder if I should sell (maybe). If I’m a buyer I consider the market and wonder if I should jump (probably). But if I’m me, I’m just concerned about hanging on to this new spring-time tan (unlikely).

Above, sunrise from my 274 Sylvan listing in Fontana’s Buena Vista.
Bay Colony For Sale

Bay Colony For Sale

Back on the market just in time for whatever season we’re now calling April, a most memorable Bay Colony lakefront condominium…

There’s a thing about lakefront condominiums. The typical way to remodel these condos is, well, typical. Some new countertops. Paint. A backsplash of something from Home Depot. And this way of doing things is just fine. When people come to see the newly remodeled condo they’ll tell you it looks nice. Good job, they’ll say. But they won’t really mean it. They’ll wonder why you put new counters on old cabinets and painted the old doors. They’re still hollow, after all. White paint doesn’t change that. But they’ll tell you it’s nice and they’ll leave wondering if the lie was convincing.

At my newest lakefront listing in Bay Colony, there’s nothing to look at that isn’t new. There’s nothing that was missed. What started out as an intended surface renovation ended up including new everything. Everything? Everything. And instead of the typical wares you’re used to seeing in this segment, the owner decided to do the unit right. The floors are oak. The counters are quartz. The bathrooms are marble. There are custom built ins galore. There’s a new laundry room. There’s style here that is not just rare on this lake- before now it didn’t even exist.

Two bedrooms and two baths with a slip. Immediate outdoor access from both the parking side and the lakefront, making for no annoying hallway conversations. Is this unit simple? Yes. It’s simple. But in the simplicity is the value. I’m offering this unit today at $899k, fully renovated by Lowell Construction. Fully furnished. Fully ready to transform your weekends. If you’ve been in the market for a turn key lakefront residence but have been let down by your condominium options, come visit me at Bay Colony unit 101.  It’s stunning, and that’s not the slightest exaggeration.

Lake Geneva Prices

Lake Geneva Prices

There’s an interesting bit of information available this morning courtesy a recent lakefront sale. The sale was of an older house on a 90′ lakefront lot in the Birches. The property was fine. The MLS description made no mention of it, but I believe the house may have been a Zook.  Zook homes are a lot like Frank Lloyd Wright homes, in that the sellers care about the pedigree of the architect, but the market doesn’t.  This property was initially listed for $3.5MM back in 2008, and after a series of price reductions and listing pauses, the property mercifully sold this week for $2.3MM.  I didn’t have the listing or the buy side, which is pretty awful for me but worse for the buyer and seller.

The parcel of land was reasonably decent, though I don’t count Maple Lane to be among the best streets on the lake. It’s a fine street with fine homes, but it’s not necessarily a street that has a history of selling for elevated prices. Today isn’t about that parcel, it’s about the market context of this sale.  Brokers are clamoring over potential listings to such an extent that prices are being driven up less by market conditions and more by the breathlessness of agents who are new enough to the business that they have no way to be sure of valuations. It’s not their fault, they’re just chasing dollars.  To understand what this sale means to the market we must first look back at some very recent history.

In 2016 I sold three lakefront homes on Lackey Lane. Of those three, two were modest homes, one of which has since been torn down while the other was renovated. Those two properties that sold at land value printed at $1.9MM and change, for 100′ lots on a really desirable street. Geographically, Lackey and Maple are close, so we’ll consider them to be likely comparables for each other, even though I find Lackey to be far more appealing.  Those two sales printed at around $19,000 per front foot. This isn’t some long ago number, this is 24 months ago. Market conditions today have improved, but market conditions in 2016 were still quite good.

The recent sale on Maple printed at $25,555 per front foot. The overall land mass at Maple was larger than Lackey by two fold, but the market pays little attention to overall mass and focuses instead, perhaps at times incorrectly, on frontage.   The Maple sale closed 34% higher than the 2016 sales on Lackey. Does this mean the lakefront market has appreciated 34% in the past 24 months? Of course not.  Does it mean that some properties have appreciated that much in such a short period of time? Absolutely yes.

In 2016, those Lackey sales were not easy sales. Both properties endured some time on market. Both properties were overlooked, even by smart buyers who were working with me.  Today, the Maple property proves out what I knew then: 100′ vacant lots that are selling at land value are becoming increasingly rare. Just as we’ll someday run out of dumpy lakefront cottages that you might be able to buy for $1.2MM, we’re also running out of 100′ lakefront lots with older, modest homes on them.  This scarcity is driving up prices in both categories, though the entry level market remains rather stagnant compared to the 100′ market. Expect this trend to continue as buyers seek out properties that offer them some upward mobility should they one day decide to build new, or undertake a serious renovation.

New Buena Vista Lakefront Listing

New Buena Vista Lakefront Listing

I have a particular thing for porches. This affinity is owed to my youth, to a childhood home where little mattered except that old porch. Summer lunch, in the porch. Summer coffee and newspaper, in the porch. Summer nights, sleeping on the bed, in the porch. The porch was and is the lifeblood of that old house. Given this porchy preference, it should be mentioned that I have never built a home with a porch. I have torn porches out of homes I have remodeled and cobbled that square footage into a greater living room. I have largely ignored the porch in my own home design, but today as I write I believe the reason behind this is simply that none of my houses have been on the lake. If the house isn’t on the lake and the porch isn’t nearest the lake, then what good is a porch? These are the things I wonder about.

274 Sylvan Avenue is on the North Shore of Fontana Bay, inside of the Buena Vista Association. This location on the lake is desirable. But that’s an understatement that fails to relay the true feelings the market has for this location. Consider this: When you search back through the MLS, the oldest sales you’ll find recorded are from the mid 1990s. From that time until this time, the only other lakefront home in Buena Vista to sell is one that closed on April 4th, 1996.   On that morning I drove my Saab 900 to school, parked in the lot, walked into the kitchen that doubled as our homeroom, and wished for the freedom that was soon to be mine.   1996 was a long time ago, and if you were a lakefront buyer looking for Buena Vista,  you probably should have bought that house.

But that’s just this location, inside Buena Vista, with access to their magnificent lakefront park and pier system and the only tennis courts on the lake that actually appear to be used with regularity. This location inside Buena Vista is beyond ideal. Not adjacent the large park, not adjacent the pier system, just in between, slightly elevated but not so elevated that the steps are tiresome. The views are divine, to the South, East, and West. This sunrise was captured from the patio. Not terrible.  Sunrise to the left, sunset to the right, Fontana’s Fourth of July fireworks, front and center.

The cottage style home might look vintage, with that lakeside wall of glassed and screened porch, but inside it’s a modern home with recent and numerous upgrades.  The current owner renovated the home top to bottom, and built an addition to increase the living space and add a true master suite. The result is lakefront perfection. Two cut-granite fireplaces flank the main level, where hardwood floors run from room to room. The owner is an epicurean, so the kitchen is divine, oversized, and outfitted with large Viking range and Sub-Zero.  If you’re wondering, there are four bedrooms plus lower level bunk space, five and a half baths, and over 4228 square feet.

Lakeside there are decks and patios with lush perennial gardens carefully highlighted by high quality landscape lighting. Streetside there’s parking for four or more cars, and more of those gardens, kept in place by fieldstone walls and connected to the entrance by another large blue-stone patio. There’s a private pier that currently plays summertime host for the owner’s thirty-one foot boat.  The property is a full lot and a half, offering loads of lakeside entertaining space and easy access to the pier and shore path. Want to walk to Gordy’s for a summertime lunch? Good idea, it’s less than five minutes down the shore path.

But all of this and we haven’t discussed the porch. In the case of 274 Sylvan, it’s not porch, it’s porches. On the main level that sunny lakeside porch spans the width of the original home, offering  a sunny winter spot with the original windows closed, or a breezy, cool summer spot with the windows open and screens deployed. Upstairs, off of the loft and guest bedroom suite, there’s another porch, identical in size, perfect for leisure, but best utilized as a summer sleeping porch. What could be better that falling asleep to the sound of the waves and the rustle of the trees while the quiet hum of a Lake Geneva summer slowly fades? The answer, in case you haven’t been paying attention, is nothing.

 

Lake Geneva Market Update

Lake Geneva Market Update

It feels like it wasn’t so long ago that I wished for more snow. For more cold. For more winter. Shortly after wishing, all of that came true. Briefly. Since then the weather has been a mix of spring and sort of winter, the dreaded in between that will come to define the next six weeks of our existence. But fret not, for February is nearly over. With it we leave behind the Olympics, and with that, we leave behind the nightly disappointment of a country with so many participants, but so few medals.  It’ll be March soon, and then we can lament the weather in March and wish for it to be April. Once April starts, we have just one more month of wishing for May. Soon, it’ll be nice out.

Even though the weather is haphazard, the real estate market doesn’t really care.  New inventory has been introduced to market, much of it by yours truly.  Pending sales have printed, and new contracts have been written. Some have been accepted. My lakefront in Loramoor closed late last month for $4,950,000, placing that property in what will be a short-lived position of first. Like when a US skater is in the gold medal position before anyone else has laced up their skates. Another lakefront in the city of Lake Geneva closed recently, that of a small hillside home listed and closed at $1.799MM.  I’ll be expecting to see that home torn down or significantly remodeled. A home in the Birches on 105′ of elevated frontage closed for $3MM.

A new lakefront came to market with 150′ of frontage and a $3.975MM asking price. I sent it around but didn’t think too much of it, and then it sold. The market doesn’t always care what I think, which is probably good, since I tend to be conservative in my valuations. A small lakefront in Williams Bay listed just over a buck is pending sale, but there’s nothing more I feel like adding to that one. A level lakefront in the Narrows is under contract recently, listed in the $2.3s.  Rounding out the lakefront activity, there are three remaining 2017 contracts left out there waiting to close, those of lakefronts listed at $3.85MM, $6.5MM, and $12.5MM. It’s going to be a terrific 2018, and we’ve only just begun.  For a full list of available lake access and lakefront homes, CLICK HERE. Feel free to share this post with anyone you know who also might appreciate an accurate list of inventory.

I’ve added some new lake access inventory this month, including a large home in Indian Hills.  Listed at $675k, it will give the new owner an opportunity to engage in the Fontana scene, with very little effort. The home is spacious, with two story foyer, main floor master bedroom, and five total bedrooms. There’s also a two car garage, along with those private Indian Hills lake rights.  I added another home in the lower price ranges this month as well, that of an off-water home in Geneva West. This is about a mile north of the lake in Williams Bay. That home, pictured above, offers a charming spread for a buyer looking for a primary residence in the Williams Bay School District, or perhaps a vacation home owner looking to find privacy at an affordable price.

A particular sale of note involves a large condo in Fontana at the Fontana Club.  I sold this unit to the original owner, when I represented the developer back in 2001. The first sale was of a single unit, then the buyer bought an adjacent unit and remodeled the space into one large residence. I sold that combined unit for him in 2006 for $1.125MM, at the time that would represent the obvious peak in the lakefront condo market. That new owner  has offered the unit for sale off and on over recent years, while the price steadily eroded. That double unit closed this month for $685k. That’s a terrible thing.  The good news for the Fontana Club is that with this sale, and that of my single unit that closed last fall for $390k, the aged inventory has finally and mercifully been cleared from the market. The best situation for the Fontana Club would now be to withhold any inventory from the market so that demand can slowly build.

Overall, I like the way the market is behaving so far this year, but I’m increasingly wary of over confident sellers. I’ve often told you how I personally behave when I’m a seller of my own home. I recognize the fact that I need that buyer more than that buyer needs me. My particular home is the only home I need to sell, whereas that buyer has several different homes he can choose. Sellers so far in 2018 are negotiating from a position of strength, which they have understandably earned.  There are some buyers, as evidenced in the market today, that will pay a seller’s price, no matter if it’s 15% too high or not. But most of the buyers are still smart, even if they choose to work with an agent they found on Zillow, because Premier Agent’s must be amazing! (or willing to pay huge sums of money to buy leads) But these buyers are still reasonably concerned about their investment, and they’re not pushing prices quite as high as sellers would like. I’ve heard of and been part of several negotiations over the last six months that featured buyers and sellers in odd standoffs over insignificant amounts of money.  Should buyers come up? Maybe. Should sellers come down? Maybe. Should you stop working with any agent who isn’t David Curry? Duh.

Above, my listing in Geneva West. $499k.
New Geneva Lakefront Listing

New Geneva Lakefront Listing

It is no secret that the South Shore Club is an exclusive development. Anything numbering just 40 in total would be viewed as exclusive. While this is known, what isn’t so well known is that exclusivity does exist here on a higher level. The homes are each unique,  each impressive. The slate, the stone, the imported this and hand hammered that, it’s all very intoxicating. There’s plenty of reason why the South Shore Club is entirely sold out, with no available inventory as of this writing. Whether the home is on Forest Hill near the tennis court, or right on the semi-circle that rings the lake like a modern day Congress Club, the structure is divine and the home a veritable castle for its fortunate owner. But this is the obvious.  This is what everyone, no, anyone, can see with their own two open eyes if they so much as drive past, or perhaps through, the South Shore Club.

But what is a higher prize are the select homes that line not just the circle of lush grass where a swimming pool and clubhouse reside, but those homes that rest immediately adjacent to the lake itself. These are the few lakefront homes of the South Shore Club, and these are the homes that compete with private frontage in such a way that they are not just a different option for those seeking private frontage, they can indeed become the better option. In this hunt for the exclusive within the exclusive, we find ourselves at the door of 1621 East Lakeside Lane.

We’ve already established that each home in the SSC is a shining jewel in its own right, but what we miss when we paint with this wide brush is that individual homes do stand out among this spiffy crowd. Some homes are larger, as is this one. At just over 10,000 square feet, this home is large enough to meet any square footage desire, and yet boasts a design that is approachable with rooms that feel airy but not so large that they become unnecessary or somehow irrelevant. This home has more privacy, more outdoor space, more this and more that.  The floor plan here is delightful, with everything a discerning buyer might require for a true lakefront home. There are finishes that exceed the highest of expectations. The Ralph Lauren interior design works perfectly at the lake.

In spite of all this perfection, the location of this home might be its most important attribute. Nestled on the extreme eastern edge of the club, there is more space between this home and its lakefront neighbor to the East. This spacious side yard is a result of superior site planning, and it’s this side yard that makes this home feel less like just another home in the South Shore Club and more like one of the finest lakefront homes you’ll ever lay eyes on. The views from the home rival or exceed that of any lakefront home on Geneva, with unavoidable lake views present in many of the rooms, and most pronounced from the epic lakeside stone patio.

This is the appeal of this exquisite home. It is part of the South Shore Club, and along with that membership it enjoys the unrivaled trappings of such luxury- the free and varied boats, the tennis court, the pool and hot tub, the clubhouse.  Think you need to buy a life vest for your daughter here? Think again, they’re included as it’s all part of the South Shore Club experience. These are the amenities, and when a home like this requires the use of those, they are available at any moment. But what is different here is the ability to detach from the South Shore Club and live as a true lakefront home. If the activities are needed, they are there. But if they are not needed, and the new owner requires little more than a comfortable lounge chair to rest on and the sound of lapping waves as their soundtrack, this is also available. It’s in the ability to live as a true lakefront home with the wide array of South Shore Club activities available when they are wanted and out of sight, and perhaps mind, when they are not.

 

This is the only available home in the South Shore Club, and it just so happens to be one of the most special. If you’re looking for lakefront and want to purchase something that’s both beautiful and easy to own, this is your chance. I sold the house next door in less than three weeks last summer. Available for private tour with notice.  $4,850,000

Clear Sky Lodge Home For Sale

Clear Sky Lodge Home For Sale

You don’t really want to be me. Some of my friends think they’d like to be me. To work a bit and make money a bit and drive a nice car a bit. To have nice things and to sell this place. It’s luxurious, they think. It’s fun, they imagine. But they’re wrong. Everyone is wrong. What I really do is take nice people out in my car and show them this lake. I show them this lane and that drive. I take them here and down there. I show them what it is we do here, how much better it is.  The scene is easy to love. The water, same. The boats and the woods and the sails, it’s all rather intoxicating, and nearly everyone agrees with this. The problem is the real estate. Do you know how deflating it is to show someone homes that cost millions of dollars that are, as a point of fact, awful homes?

This is the Lake Geneva problem. This is my problem. This market is expensive, there’s just no getting around it. But it’s expensive for a reason, for many reasons, and it’s worth it.  But whether it’s worth it or not, the homes that buyers can buy are often disappointing. They need significant updating. Or a wrecking ball. Or they lack this and that. They always lack. I’d buy this house if only it had (insert anything here, anything at all).  With this housing deficiency understood, imagine now my delight in bringing you this new listing at 1100E South Lakeshore Drive in Fontana.

This house measures more than 5000 square feet. It has a two car garage. Five bedrooms. A large great room with tall ceilings. Four fireplaces. Huge outdoor patio space. 1.78 acres of wooded privacy. Two driveways with ample room to park as many as a dozen vehicles. It has a shared pier with a canopied slip. The current owner keeps his 27′ Cobalt there. I suppose you could put yours there as well.  There’s SubZero and Wolf.  Stone and granite. Big wooded doors that swing on huge steel hinges. This isn’t so much a mere lake house in Fontana as much as it’s an Adirondack Lodge in Fontana.

But this is the house, the big, beautiful house. That’s not what really sets the property apart. It’s that privacy, that delicious, rare, wooded privacy. It’s the Fontana location with water and sewer and an easy walk to town or the Lake Geneva Yacht Club.  It’s these things, but it’s much more.  Here we have an inground swimming pool, set back in the woods surrounded by lush perennial gardens. There’s a Lord and Burnham Greenhouse, one that causes me to green with jealousy every time I enter. The current owners don’t use it as a greenhouse, they just use it as a pool-toy storage center, but I’d use it as a greenhouse if it were mine. Once you buy this house, I’d like it if you’d use it as a greenhouse again.

It’s not just a big house with all those fireplaces and a pool and a greenhouse and so much wooded privacy on all that land. There’s a tennis court, too. A tennis court with lights and basketball hoops. The current owner holds the Spotted Cow Open here each year. I’m surprised you’ve never heard of it. The sponsorship by Spotted Cow isn’t official yet, but they should appreciate the free advertising.  If you’re tired from tennis you can retreat to the pool, and when you tire of the pool you can enter the greenhouse. The tomatoes need picking.

This comes back to the price. $2.99MM for all of this lakeside luxury. This house gives you what other homes in this price range can’t. You can buy a lakefront home for this money, easily and often. But you can’t buy an estate with these country club amenities. Even if you could, it wouldn’t be in Fontana and it wouldn’t have a pier, and it certainly wouldn’t be walking distance to the Yacht Club.   My job typically forces me to sell around what isn’t there. In the case of this Clear Sky Lodge property,  there’s nothing I need to sell. The property does it for me.  Available for private showings this weekend.

2017 Geneva Lakefront Market Review

2017 Geneva Lakefront Market Review

Several of our vacation home segments finished 2017 without a particular narrative. They were nice markets that had a nice year. Nothing more, nothing less. No major breakthroughs, no particular oddities. The other markets have been on a roll, and we have no choice but to pat them on the back and tell them they did well. The lakefront market, too, had a nice year. It built on volume and built on price as inventory disappeared. But this is where the lakefront market says goodbye to the other markets and wishes them well. The lakefront market is on to bigger and better things. The lakefront market has a different story to tell.

That story, in case you’re new to this blog or new to the Lake Geneva media mentions, is a dramatic increase in upper bracket sales activity.  This is the story that needs to be told. This is the difference between Lake Geneva and all other Midwestern vacation home markets.  If this sounds like a common refrain coming from this site, that’s because the refrain is historically rare and is worthy of this praise. Consider the prior market peak. That peak was between January of 2007 and January of 2009. During those months the lakefront market on Geneva printed three sales in excess of $4MM. The top sale for that period closed for $4.95MM. Now consider the current market cycle and the sales that have occurred between January 2016 and January 2018. For those 24 months, the lakefront market printed 10 sales in excess of $4MM and three sales over $7MM. The top sale was $9.95MM.  For my part, I represented either the buyer or seller in seven of those ten sales, and each of the top three sales.

Currently we have five more properties pending sale over $4MM and one pending sale over $12MM. This is no longer a market that struggles to provide one or two sales over $4MM annually. That’s the old Lake Geneva, and this is the new Lake Geneva. Increased upper bracket activity, a stronger overall buyer, and a top end that has been completely and thoroughly redefined. While there are questions about the long term strength of this particular segment, I think there is one nagging question that has been answered. Can Lake Geneva provide liquidity to owners who have homes justifiably valued in the $10-15MM range? Yes. A follow up question with more devastating results: Are buyers buying lakefront houses for too much money, in part because they don’t seek qualified counsel in the decision? Also yes.

For the year just ended the lakefront market closed 26 single family properties (MLS). These sales registered $27,578 per front foot, up a bit from the $27, 193 from 2016. In total we sold 2455 front feet on Geneva, down from the 2882 front feet sold in 2016.  I’m finding the traditional price per front foot metric to be increasingly antiquated, even though the market still likes to point to that number as the best and easiest way to identify value.  I’ve started to add in a price per square foot of structure ($560.96) and price per square foot of land ($58.09) so that buyers have additional means by which to understand the value of a particular property.  There is no particular means to measure value, but these three metrics combined with nuanced understanding of desirable locations and attributes can help narrow down the valuation range.

Entry level lakefront traded with some vigor in 2017, and I did find it curious that this segment offered strong value even as the broad market accelerated. Five lakefronts traded under $1.325MM last year, including two under $926k. Those sales represented a nice entry point into this lakefront scene, and I continue to believe that we will find ourselves in a position where the market runs out of sub $1MM homes. These sort of basic cottages only exist on the lake is certain areas, and with each sale these are properties that are typically transformed via renovation or reconstruction. If you’re an entry level lakefront buyer, you’d be wise to move on properties and not miss out on  purchases over small negotiation points and percentages.

The story for 2018 will be inventory. Today, there are just ten Geneva lakefront homes available (private frontage, without offer). If the stock market maintains this incredible level (note, it doesn’t need to keep moving higher, just not correct significantly), Geneva will see another terrific year. Heck, the way buyers are buying in January, maybe we don’t even care about the stock market anymore.  New construction is rampant at the moment, and while the upper end values currently support these builds, it’ll be interesting to see if this upper bracket market hits resistance in the coming years.

For now, expect inventory to remain low, and cary-over sales from 2017 to close during the first quarter 2018.  The market is clamoring for inventory in each segment, including that lofty $6MM+ range. New construction in any price segment will be of interest to current buyers, so long as the parcels match up with the price. That’s a key.  I’m expecting inventory to build over the coming months, as opportunistic sellers see a market rife with activity. Some brokers are telling sellers to name their price, but that’s ridiculous. The market is hot, but buyers and sellers still need to understand basic fundamentals of market valuations.   If you want an agent to tell you every house is the right house, then I’m not your guy. If you want an agent to help guide you through this increasingly active and competitive market, I’m here to help. 

Above, the lakefront at my Loramoor listing. Pending sale at $5,950,000
2017 Market Reviews

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.
South Shore Club Sells

South Shore Club Sells

In the South Shore Club, there are 40 total lots. Most are built on, a few are not. At present, there is one new construction underway.  To date, there had been one sale, that of an aged inventory home near the back of the lakeside circle. While there are 40 total, there are only four built homes that play as true lakefront homes. Those are the front homes, the homes you walk into and see the water, unavoidably.  Those are the homes that function as their own market, and the home I sold this week is part of that elite group.

There is some confusion over the South Shore Club, and how to come to a valuation. Will the market pay lakefront prices for these lakefront homes? The answer is yes, and no. The yes part is obvious, because there’s a sales pattern now that didn’t exist prior to 2012. The no part is less obvious, and it might not be a negative in the way you’re suspecting.  The market won’t pay true lakefront prices for these homes because the prices paid for them represent a discount to what those homes would trade for if they were on their own private lakefront parcels. So the market respects the South Shore Club, but buyers still expect a slight reduction over private frontage valuations. This is all good news.

Consider one way to look at this closing at $4,175,000. The last front house sold in 2014 for $3,591,000.  For 2014, the average price paid per lakefront foot was $21,144.  2017 YTD through October 10th, 2017, the average price paid is $27,743. That represents a 31% increase in valuation. If we apply the same appreciation increase to the South Shore Club lakefront four, we’d see a valuation $4,704,210.  Is this the only way to compute value? Of course not. A lakefront in Fontana sold in the high fours this fall, and that home, with a very small lot, sold for $713 per square foot. The South Shore Club home was 8736 square feet, which comes to a $477 per square foot.

A sincere thank you to the buyer and seller who let me help with this transaction. It was not the easiest deal I’ve ever worked on, and that comment may win Understatement Of The Year. That’ll put a wrap on my 2017 sales production, unless someone needs to close on a new house by the end of the year. Put a big red bow on it, like a Lexus. The year ends for me with $44MM in sales, which makes me the #1 individual Walworth County agent for 2017, and in that top slot for the third year in the past four. Combined with the 2016 volume that’s $106MM in the past 24 months. And that isn’t so bad. The address being written wrong on the property below that just sold, now that’s bad.

Bluff Lane

Bluff Lane

Buyers have a unique tendency to focus on one or two aspects of a purchase, and in doing so, convince themselves to proceed with the transaction. This is true of jeans. If you love the fit but hate the color, you might buy them anyway. If you hate the fit but love the price, you might buy them anyway. This is why we have closets with jeans that we don’t wear. Sometimes it’s because we started working out and have, as a curious result, gained weight. But usually it’s because whatever jean we bought wasn’t quite right, but we bought it anyway. Houses are like this, too.

On the lakefront, it’s often less about what a house has than what it doesn’t. It has a fantastic stove. Yes! Shiny! But it has one bedroom. It has a big level lawn, sweet! But the foundation is an assortment of neatly, dry-stacked bricks placed at random intervals. Every house has good, and every house has bad. There is no perfect house. Not here, at least. Every property has something wrong with it.  Buyers like to focus on garages. Lake houses and garages have a curious relationship.  On one hand, a lake house doesn’t need a garage. Not at all. On the other hand, at a certain price point, the lake house demands a garage. It needs one. What’s that price point? That’s for you to decide, but I think it’s somewhere just north of $2MM. If I’m a $1.6MM lakefront house buyer, I should understand that a garage is an extravagance that my budget might not afford. If I’m a $3MM lake house buyer, I likely find a garage to be a requirement of the purchase. This is the way the market tends to behave.

That brings us to my newest lakefront listing, N1939 Bluff Lane. Follow the road through the little stone entry, and you’ll end up on the dead end of Bluff Lane. A few lakefront houses, not much more. It’s quiet, down here on Bluff. If you think the name is cute but not meaningful, you’d be wrong. Bluff Lane is indeed a high lane, with elevated frontage. That frontage creates steps, yes. But that elevation creates a most unique perch through which to absorb the lake. It’s a tree house setting, which is unique on this lake but highly interesting.

The house has five bedrooms, four baths. A two car detached garage is a newer addition to the property, along with a full lower level that opens to the lakeside for water toy storage. There’s off-street parking,  a small lakeside yard, and 76 feet of private frontage. The house was renovated and added onto in 2009, leaving this once basic property with a fresh look and a beautiful new master suite. There are three fireplaces here, which should interest you if you like the idea of sitting in a tree house overlooking the lake while the snow piles up outside. It’s a good feeling, a good scene, and with a 30 day close you could be enjoying New Year’s Eve in that exact fashion.

At the lakefront, there’s a massive pier, complete with oversized canopied boatslip and a large swim deck. It’s Linn Township, so the taxes are just $16k and change. This home is in terrific condition, ready for immediate use.  Why wait until May to join the race for summer? Start the race now. Tweak your new house over the winter.  Some new paint colors here,  some new couches there. Do the work in the off-season that so many people put off until the in-season. Take the winter to enjoy the scene, decorate the house, and prepare. When Memorial Day Weekend rolls around, you never again have to wonder which suburban BBQ you’re going to attend.

 

465 Outing

465 Outing

When David Bowie died, it was hard to scroll through Twitter and find someone who had not, at some point, met him. In line at McDonald’s. Rushing through Heathrow. Buying shrimp to soak under the Anna Maria fishing dock.  Well wishers wrote RIP, I’ll never forget that time I saw Bowie buying eggs at the Mobile in SuchandSuch, NY. This is what happens when famous people die. In the same way, everyone has a story about a lake house.  A friend’s lake house. The weekends there in high school. An uncle’s lake house. The August fishing trips.  The grandparents’ cottage, so far up north that it was just one long weekend every summer. No matter the duration of the exposure, no matter the quality of the water or the size of the fish, a lake house weekend imprints a permanent memory.

But what of that lake house.  What does it need to be? Does it need to be 5500 square feet,  with a four car garage and a three slip pier?  Does it need to be all shine and polish, large and kept, perfect? Or does it just need to be on a lake? Is this the only real requirement of a lake house? Is this why families with lake houses on obscure awful lakes still make the pilgrimage to their terrible water every summer?  We pretend to know why we seek out and buy these homes. It’s because we want to make memories. We want our kids to love us when they’re older. We want to experience weekends in a different way. We want something else, something different, something that we know other people have. These are the motivators that begin the search, but once the search is underway, these tend to fall by the wayside in favor of appliance make and bathroom material.

There was a little house at 465 Outing Drive in Williams Bay. This house is a few doors West of George Williams College, where Music By The Lake strums each summer. The cottage wasn’t big. It wasn’t nice. It wasn’t clean. In fact, it wasn’t habitable. But it was lakefront, and that’s what caused an investor to buy it and begin a thorough and significant renovation. New this and new that. New everything, almost. New hardwood floors, new windows, siding, roof. Insulation. Trim, appliances. Kitchen, baths. Marble. Patio. Parking. Everything new. The process took several months, and when the home was completed it represented the finest of blends. A lakefront home with vintage cottage charm, outfitted with modern conveniences and luxury appointments.

The home came to market this past summer for a few dollars less than $2MM. The property was, after all, a perfect example of lakefront charm. Still, the market pushed back, and the price was forced to adjust. Today, I’ve brought this property back to market for $1.699MM. A price that fits into the entry level segment of our market without requiring anything of the new buyer. Purchase this home and change something if you wish, but there’s nothing required. Just purchase, move, and enjoy your weekends in an entirely different way.  There’s a private pier, beautiful wide water views of Fontana Bay, and an easy shore path walk to Chuck’s, Gordy’s, and the Fontana lakefront scene. You could buy a cottage on the lake and renovate it yourself. You could. Or you could just buy this place and save yourself the frustration, expense, and delays that accompany such a significant project.

Lake Geneva Lakefront Market Update

Lake Geneva Lakefront Market Update

I read an article yesterday about slowing home sales in the Hamptons. Hamptons’ Homes See Double Digit Price Drop. Sounds terrible, unless you don’t care about the Northeast, which I don’t. In fact, I root against the Northeast as a general practice.  I read the entire article, but I didn’t really need to. The first graph told the story.

 

The softness in pricing was mainly due to an oversupply in the luxury market…The luxury inventory is still expanding, noting that there were 322 active listings during the last quarter, a 22.4% increase from a year ago. ~ Jonathan Miller, Douglas Elliman

Well then, that sort of takes the mystery out of it all, doesn’t it? Why is the market slowing? Oversupply. Why do my shorts get wet when I swim? Because of the water. News sorts like to look at localized headlines like these and paint a national segment with the same brush. Unfortunately, the real world doesn’t work that way.  But the article does bring up an interesting topic, that of supply. If supply is overwhelming the demand, we all know markets have to drop. Why will they drop? Because if there are 322 active listings in one segment, you can bet that at least 30 of those chowder eaters are going to want to sell, and they want to sell now. That puts downward pressure on the list prices, which results in lower sales prices, which results in Mansion Global running an article, which results in David Curry writing another article in the response to the article.

The month of October was again kind to the Lake Geneva upper bracket. Four lakefront homes sold last month, with many others heading under contract.  Today, there are just 17 true lakefront homes available on Geneva Lake (with private frontage). That means we have the opposite problem that afflicts the Hamptonites.  Though this will also cause our volume to shrink, even as our prices remain stable or increase.  The four sales on Geneva from this month are unique, in that three of the four had experienced elongated market time. Did the list prices soften or did the market rise to meet the seller demands? Both, sort of. Kind of.

A Congress Club cottage sold for $1.53MM. That house had been for sale for two years, on and off, and finally sold after a series of price reductions.  The property is not private frontage, rather it shares a wide swath of frontage with the other Congress Club cottages. It’s a unique set up, something that the market finds both appealing and strange.  This particular home sold for a similar number several years ago, effectively putting a cap on the prices in the Congress Club. Do people mind sharing frontage and sharing piers and having to abide by all sorts of rules? Yes. Do they mind as long as the price is mid $1s or lower? No.

Another old cottage, this one with 84′ of private frontage, sold recently. Main Street Lake Geneva is a location that the market didn’t used to find as appealing as it does today. The traffic, the noise, the scene, were mostly left off of buyer’s want lists until this most recent cycle. Now people like the action, they crave the scene, they tolerate the traffic. The house that sold was one that I had for sale a year or two ago. I failed to sell it, for similar dollars. But that wasn’t because I’m not good at selling things, it was just that the market has increased since then and the increase allowed the seller’s number to make some sense to a buyer. The home closed for $2.1MM and change.

In September, I wrote an offer for a client on a lakefront home in Cedar Point Park. The house was okay, not perfect, but okay. Our offer was followed by another offer, and when our reasonable offer was rebuffed, my buyer stepped out and the other buyer bought. $2,775,000 was the closing price for a modest home on the hill in Cedar Point. I thought this to be a high number, but that’s just like, my opinion, man.  This property sold in 2004 for $2,025,000, again in 2009 for $2,575,000, and now in 2017 for $2,775,000.

Lastly, a sale near the Lake Geneva Country Club for $2.85MM. This home had been for sale for what felt like my entire life, though I’m sure that’s not accurate. The house was nice enough, the 125′ of frontage, good enough. But the house was plagued by a location next to the LGCC maintenance building and paddle courts. The market didn’t love these conditions, but as with any lakefront sale, these are each unique and certain buyers prioritize amenities and detriments differently. I’ve sold lots of homes that the broad market didn’t love, but when you find the perfect buyer their perfect house, deals happen. In the context of price per front foot, this sale was the most affordable of the other three private lakefronts to have closed recently, so that’s worth something.

If the market is expected to slow, 3% GDP, all-time index highs, and low inventory aren’t the conditions that will lead to that slowdown. Will the possible elimination of itemized deductions hurt us, as the Crain’s Chicago Business article this week claimed? Maybe, but I don’t think so. Buyers aren’t here because they’re combing over every last dollar. They’re here because they love it, because it means something to them, because it means something to their families. They’re here because they want to be, and they keep coming even when the price of admission is on the rise.

 

Above, my new listing at 434 Oakwood in Fontana. $1.295MM for so much perfection.
Lake Geneva Market Update

Lake Geneva Market Update

When times were particularly bad and getting worse, I hatched a particular theory.  The theory supposed that in spite of the various factors that we know prod consumers to buy and sell homes, things like interest rates and employment and marriage, there’s really only one thing that makes real estate markets move. In bad times, it’s fear. If you have $10MM in the bank and your $2MM home is only worth $1.7MM, do you need to sell it? Of course not. Then why sell it for $1.6MM? The answer, which we can only know now, is that you sell at $1.6MM because you’re afraid next month it’ll be $1.5MM. That’s why this market moved like it did from 2009 through 2012, because of fear.

And if it’s fear that drives a declining market to lower lows, then it must be the opposite that drives an escalating market to higher highs. Job growth is great, but it doesn’t fuel the top end at Lake Geneva. Interest rates are important, but are they? Stock market return are incredibly important to this vacation home market, and with steady returns piling up it makes sense that consumer confidence is as robust as it is. The opposite of fear is confidence, and it’s that confidence that’s driving the Lake Geneva market. And it’s driving super fast.

Another week, more contracts. More offers. More sellers wondering if their house is next, more buyers buying homes they didn’t know they needed but now can’t live without. There are 30 lakefront homes available this morning, per the MLS. Of those 30, nine are under contract. That makes just 21 available lakefronts.  Of those 21, several have active offers being negotiated. 20 true lakefront homes have already sold in 2017, leaving us to assume that we’ll break the 30 home mark for 2017.  Last year was a banner year, and we only closed 24 true lakefronts (MLS). If we break 30 this year, it’ll be even more important to remember that in 2007 we only sold 17 lakefronts. This new norm is really, really something.

This week, a lakefront closing. That of Kerry Wood’s house in Fontana. At $4.7MM it’s an okay sale. I don’t love it, and I don’t hate it. I’m ambivalent, which is how I feel about baked cod and maple syrup.  It’s a lofty sale for the frontage (102′), and the location (mostly homes valued under $2MM in the immediate neighborhood). It’s proof, once again, that our market loves new(er) homes, and will do just about anything to own them.

More contracts this week as well. A new contract on my listing in the Elgin Club. A new contract on a large Fontana lakefront listed in the $6s. A new contract on the non-lakefront modern home ($1.85MM) that sits on the cliff overlooking Fontana Bay.  A new contract on the house next to the Lake Geneva Country Club ($3.095MM), and a new contract on the Main Street, Lake Geneva lakefront ($2.495MM) that sits near the Library Park.  Hillcroft, that big estate with an older house that anchors 415′ of Snake Road lakefrontage is still pending ($12.5MM), as is the spec home in Williams Bay ($3.85MM) and the Circle Parkway lakefront ($2.95MM).  My South Shore Club lakefront also remains under contract ($4.595MM). Rounding out this flurry of activity is the small home on Marianne Terrace in Lake Geneva that’s under contract ($1.799MM).  The market is searingly hot. Breathlessly hot.

Do you think every deal is a good deal? Absolutely not.  Some of the deals I see are pretty awful. Embarrassing, really. But that ties in with Monday’s bit, so you already know how terrible this is. Still, the market is moving and there’s plenty of room left in 2017 for it to move further. Are prices increasing? Well, yes, they are. The wood sale just printed at $47,000 per front foot. That’s not the average, but a few of those in a year will skew our 2017 average to the very high end.  Continue to expect sales as we finish the year, and continue to expect many of these sales to be carried out by buyers who really should have done some more homework before they docusigned on the dotted line.

Above, my dynamite Loramoor listing.

 

Lake Geneva Agent Representation

Lake Geneva Agent Representation

We know lots of things. We know that if we don’t cut our grass once a week it will grow too tall and too thick, and when we cut it after the week off we know that the cutting will be difficult. It would have been easier to mow it last week. Once in a while, it’s good to let it go and struggle through the off-week cutting, to remind oneself not to skip the lawn. In the same way, we know we should floss our teeth. It’s a good habit, this flossing. I floss, sure, but when sitting in the dentist chair I have to both admit it’s not twice a day and then endure the chastising reminder. Flossing, it’s good.

In the same way, there are certain real estate things that everyone needs to remember. This is your Monday reminder. In an attempt to make this exceptionally easy reading today, I’ll distill the reminders down to just one.  What I’m asking you, no, what I’m begging you to remember, is so simple. It’s nothing complicated. It’s not painful like mowing too-tall of grass, or annoying, like flossing stupid back teeth. It’s so easy, anyone can do it. Best of all, this thing you must do doesn’t cost you any money. In fact, it will likely save you money, and also save you from the heaps of shame that accompanies the forgetting of this thing.

In part, I blame the internet for the way it has made all real estate, and all markets, feel the same. When zooming over a map of a county on Zillow, all the consumer sees is a “market”. A house here for $4MM, a house over there for $400k. A house down the road for $1.1MM and one over here for $200k. The market, when viewed through the lens of a smartphone, looks small and quaint. In the same way, an agent in Middleton is the same as an agent in Madison, is the same as an agent in Milwaukee. It’s all one state, and it’s a midwestern state at that, which means it must be simple and it must be easy.  For the Zillow tells us so.

I’ll tell you a secret about Lake Geneva. When an agent has a listing that he or she knows is overpriced and/or a very difficult sale, guess what we hope happens? Of course we hope the listing sells. That’s our job, to work and to hope. But we really hope a buyer shows up who is tethered to an agent who isn’t from our market. Make it an agent from out of state and our eyes light up at the naivety of it all. A buyer working with an inexperienced agent, or one who isn’t from our market, is a buyer that will likely make mistakes. If we’re the listing side of a grossly overpriced property, we hope you make the mistake soon.

This is the problem, and this is the reminder. Stop working with agents that don’t know the market. It seems so obvious, so elementary. Yet the market is full of buyers working with agents who aren’t active in the particular segment they’re attempting to sell.  There’s a reason I don’t go to Door County and sell real estate on Thursdays. There’s a reason I don’t go to  Bayfield on Wednesdays and Elm Grove on Fridays. I’m pretty good at this real estate game, and I know my limitations. If I don’t know a market I’m not going to represent myself as an expert in that market. It’s just that easy.

If you’re a lakefront buyer seeking a Geneva Lake property, is it in your best interest to walk into a real estate office on a Saturday and sign up with the agent standing in front of you? Would you visit the walk-in clinic to have your kidney transplant performed? Real estate is not as complicated as surgery, but the analogy of a surgery taking place is indeed accurate in that real estate surgery involves removing too much money directly from your pocket. If you’re looking for a $3MM home in  Hinsdale, work with an agent who routinely sells $3MM homes in Hinsdale. If you’re looking for a $200k condo in Lake Geneva, work with an agent who routinely sells $200k condos in Lake Geneva. And if you’re looking for a $3MM lakefront home on Geneva, work with the agent who routinely sells $3MM homes on Geneva. And if you have a dentist appointment tomorrow, start flossing right now.

 

 

 

Fall At The Lake

Fall At The Lake

Of the things we know to expect during an autumn here, 95 degree sunshine is not among them. The heat is rare, but in a summer devoid of any lasting heat, I don’t know how we could do anything but welcome this heat with open, sweaty arms. It’ll be cold soon, consistently cold, where the days that hit 60 will be the summery ones. We’ll delight in those days, saying they’re too warm to wear a sweater, and we’ll sweat just a bit and we’ll be happy. For now, the green is fading but the summer remains, which leaves us little choice but to hold onto it like grim death.

This is something we don’t expect, but there are now market things we should expect. If we don’t expect them, that’s because we’re working with the wrong Realtor, which isn’t so much my fault as it is yours. The things you should expect are both obvious and yet, many of them are contradictory. That’s Lake Geneva in a single sentence. It makes perfect sense as long as you understand that sometimes up is down and often down is up and expensive properties sell so long as they have a Wolf range or so long as you’re the buyer who just latched onto a Realtor that you met because that Realtor was working floor time at the office on a weekend.

Sellers. It’s September, and sellers who haven’t yet sold are a bit concerned. Some are, some aren’t, but the general theme amongst aged inventory is some cautious concern.  There are two things that must now happen. First, asking prices should soften. This is not going to be the case for all sellers, but for some, prices will adjust as sellers look toward the off season. Second, what off season? Our market will remain vibrant up through Thanksgiving and beyond, with just a seasonal adjustment being made for Holiday weeks when only the faithful few will be actively buying and selling. The key for sellers is to understand the market remains hot, and will remain so, no matter if our 90s fade to 50s. Lake Geneva is still king, and kings do not relinquish their crowns when the temperatures drop, they just wrap themselves in some fine custom garments.

Buyers.  There are lots of you out there, and lots of you are making terrible, terrible mistakes. I try to warn you, but some of you insist on waltzing into real estate offices and make the assumption that the warm body in front of you is going to be your best chance at securing lakefront, or lake access value. This is sadly not the case, but you keep doing it anyway. There’s a funny game we can play. It’s called look at properties that no one thought would sell for the prices they sold for, and often you can find the selling agent to be an agent that doesn’t routinely work the lakefront market. To be certain, all agents are not created equal, though agents love to attempt to punch above their weight in the lakefront market because the prize money is alluring. Agents who sell $205k ranches in Elkhorn are not the agents who routinely sell $3MM houses on Geneva Lake. I’m begging you to understand this.

But for buyers there are still deals to be had. There is aged inventory that has been fielding and rebuffing offers all year, and those properties might be open to negotiations.  My recent experience is that sellers are still far too confident. Solid offers are being declined, because there is too much optimism. Sellers don’t seem to understand that 9/10s of a bird in the hand is so much better than 10/10s of a bird in the bush. This is what the game has come down to- fractions of lofty valuations- and sellers are proving their lack of real estate prowess by routinely ignoring solid, market bids.

If we’re buyers, does this mean we give up and look to another lake that might more feature more motivated sellers? Just because it’s September does this mean we wear boots and jeans when it’s 95 and sunny?

Above, my Elgin Club lakefront, now $1.925MM. It is, in my infallible, expert opinion, the best lakefront on the market priced under $2.5MM.
Jerseyhurst Sells

Jerseyhurst Sells

There are nice locations on this lake. We know most of the nice ones. If we get to drive down Snake Road while en route to our lake house, this is a wonderful thing. If we turn off of South Lakeshore Drive onto Basswood, this also makes us happy. If we drive down Linn Pier and get to turn left onto Lackey Lane, we know we should celebrate that we were able to turn left instead of just right. There are roads that deserve our praise, and each person who has ever driven these curving lakeside roads knows it. 

But the roads we know are not the only roads. There is one road that most people don’t know. Tell them to find Jerseyhurst without the assistance of GPS. Tell your older friends to find it without a the help of a Rand McNally. It’s a road we know about, because we once heard someone at a nearby dinner table mention it. Or we know about it because a friend once went on a garden walk down that lane, though most invitees became lost along the way.

Once you do find Jerseyhurst, just to the West of the Elgin Club, it requires no creativity to understand why it’s so special. There are several homes here, but not so many really. Just a handful, each unique and each manicured and each representing the best that Lake Geneva has to offer. This is a unique lane, short and curved and limited, but why it’s special is apparent to anyone and everyone who has ever wandered down it.

This is why my Jerseyhurst listing sold, and sold so quickly. I was pleased to represent the seller and work directly with the buyer in this transaction, and the print price last Friday of $2,795,000 represents a fair ransom to find ownership on this most lovely lane. To the new owners, a big congratulations for becoming the new stewards of this wonderful lake house. To the sellers who spent many fine years here, a most sincere thanks for allowing me to handle this sale, and best wishes for whatever comes next.

As a self-indulgent aside, this sale has pushed my 2017 sales volume to $34MM and change, which leaves me alone at top of the Walworth County leaderboard. So that’s neat.

Market Test

Market Test

By now, we all know the last two decades of market conditions at Lake Geneva. We understand the cycle. The market rose steadily from 1997 through 2008. Then the market fell from early 2009 through mid 2012. Today, we know we’re in year four or five of the latest bull market run. How long this run lasts is something we cannot yet know. I’ll let you know when it’s over. For now, we know the history and we understand it, but the biggest test for the market is beginning now.  Not now in terms of September 2017, not now in terms of Autumn.

Every market runs in these cycles. Some cycles are longer. Some are shorter. Some are less aggressive on the way up and less considerate on the way down. What lies ahead is the interesting bit.  I can guesstimate the percentages of appreciation and decline, with relative accuracy. I can tell you that at the bottom of our market cycle in 2011/2012, lakefront prices were off around 30% from their prior peak highs (2007/2008). I can tell you that since the market bottom we’ve regained perhaps 20% of those losses. In some cases, properties today are worth more than their 2008 market highs.  Try telling that to a lakefront home languishing on market in the Highlands for a price that’s not dissimilar from what it would have fetched in 2012. This is the anomaly of Lake Geneva. The market does not rise and fall with uniformity.

But that’s not the test. That’s just the set up. The real test is in the actual prices paid for properties that sold perhaps at the prior market peak, then again at the market bottom, and now again in 2017.  Today Lake Geneva is testing itself. It’s self inflicted, like volunteering to take a difficult exam even though the teacher is on vacation and the other students are still catching up on their week old homework.  The test is to prove, not with my theoretical statistics, or with some silly Price Per Foot averaging game, just how far the market has come since 2012. The only way to really know is the look to the lakefront houses that sold in 2012 and see what they’re selling for in 2017.

We know there have been some resales that roughly align with this timing already. I’ve sold a few homes in the last few years that sold during the market bottom once and then again as the market improved. Many of these have sold under unique circumstances. I sold a home on Folly Lane several years ago at the market bottom that has since resold. But the property resold at a higher price to a  neighbor because the neighbor had to have it. In the same way, the lakefront sale from last fall on the south shore of Fontana. The house that Matthew McConaughey was rumored to have bought (he didn’t). That home sold for a fat premium just one year after it originally sold. Was that a sign of the market appreciation? No, it was just an interested party pursuing a specific property. That sale looks nice in the MLS, but it isn’t a sign of broad market interest, nor does the PPF mean anything.

In order to really look at the gains since 2012, we need sales that have occurred at an arm’s length, under normal marketing conditions. We need an average sale. Moreover, we need several of these sales if we’re going to consider the outcome to be representative of the market. Thankfully, there are a few such sales, but for the sake of our concept, we’re going to need to cast a wider net. Let’s look at lakefront properties that have sold in the past 12 months that also sold between 2010 and mid 2013. In a low volume environment, which Geneva is in good times and bad, we’ll need to open the view to capture a larger sample size. Those MLS sales that match the stated criteria are as follows:

These are the handful of sales that follow our pattern.  The sales are not exact, since transfer prices can fluctuate based on allowances for furniture and other personal property, and the sales are not particularly equal since a sale in 2010 was of a property that likely still depreciated through 2012. Additionally, at least one of these properties was remodeled and updated in between sale dates (1014 S Lakeshore). But this is all we have to base our estimates on. These sales point to an average increase of just 10%.

Is that it? Is that the answer to the question? Well, not really. This is just a small sample size. We sell on average around 23 houses a year on Geneva Lake and this is just a snapshot of five of those sales. I would guess the market gains across the board have been somewhere around 20% since our market bottom of 2011/12. The market hasn’t yet printed enough volume to draw attention to that gain, but that’s my estimate and my eye is fairly keen. The market today is testing that 20% theory with several current listings that had previously sold during that recent market bottom. On average, these sellers are seeking 30% or more over the prior sale prices. The test today is to see if a market that is as robust and active as our lakefront market can indeed support that large increase over such a short period of time.

Do we know the answer to that question? Nope, but the good news is that the question has been asked and the market will answer soon.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

This market has a way about it.  Sometimes the market feels slow to me. It feels sluggish, lifeless. It feels as though the last seller has sold and the last buyer has bought, and the rest of the days we’ll just while away, wishing for the way it was. It feels as though we’ve done everything that we were going to do. We’ve sold the last big house. Sold the last lot. Sold the last cheap house. It feels as thought we’ve run out of tricks. And then a new week begins and the market proves why it is the single most robust vacation home market in the entire Midwest.

This week was one of those weeks. New contracts flying. New listings selling. A fresh contract on my lakefront home in the South Shore Club ($4.595MM). A fresh contract on a baseball player’s house ($4.995) in Fontana. A new contract on an entry level house ($1.195MM).  I wrote on that house earlier this week on behalf of a buyer, only to be told the house had just the day before gone under contract. A listing on 68′ in Lake Geneva for $1.799MM, under contract within 24 hours of hitting the open market. A contract on a spec home in Cedar Point ($3.85MM). Two more contracts are still pending,  those on my listing on Jerseyhurst ($2.895MM), and a lakefront in Knollwood ($3.325MM). The market, just when it seemed as though the summer lull was taking hold, has surged.

Of the 28 lakefront homes available today, 7 are pending sale, leaving just 21 available homes.  Lest you think all of the good homes are sold, consider that there’s still a lakefront home available on Geneva Lake priced under $1MM.  We’re going to run out of those homes someday, so if you have vision, it’s time to snap up this remaining bit of aged, cheap inventory. My listing in the Elgin Club ($1.975MM) has no reason to be available today. It should be sold. Perhaps I’m not very good at this game, because I’m failing on that house. It’s a large house on 50′ of level frontage with private pier and fantastic features, and it’s available today.  You should come see it this weekend. My listing in Fontana for $3.2MM is turn key perfection. My Loramoor lakefront for $5.995MM couldn’t be replicated for the price it’ll sell for. The market might be active, but there is value still to be discovered.

Aged inventory has a way of weighing heavily here, and today there is still plenty of it. There are properties entering their second autumn on market, and those homes, in spite of the market conditions, appear ripe to sell right. Let’s go look at those together. Let’s revisit the things the market has passed up time and time again. And let’s be first in line for the new offerings that are bound to make their way to market this fall. Remember, September is only fall in our minds, it’s still summer on our skin.  For now, let’s rejoice in the summer that we’ve had. Let’s be proud of this market, and of the recent spate of sales that will let 2017 be our sixth fantastic year in a row. And let’s realize that in spite of all this activity, there are still deals to be had. Here’s to this place. Here’s to us. Here’s to the last Labor Day weekend you’re ever going to have to spend in the city.