Blog : Luxury Real Estate

Lake Geneva Market Update

Lake Geneva Market Update

Now that I’ve predictably sabotaged our lovely fall weather by writing about how much I love it, and how much longer it will last, let’s get up to speed on the market conditions at the lake. It’s the time of year where two distinct things happen. Well, three, if you count our impending snow. First things first, the market wraps up fall closings. Deals that were struck in September, while summer was still hanging on, and those deals that were bridged in October, when the colors were bright, those deals close now. The second thing that happens is nonchalant buyers take some time off from their search, which is why most nonchalant lookers make huge mistakes by sitting out the prime time.
The closings on the lakefront have been pretty consistent this fall. 2015 is going to end up being one of the best years (of all time) for lakefront sales. I fear this may skew the impression of the market as felt by sellers, but it’s a good thing no matter how you slice it. There have been ample deals in all segments, though the entry level market is still trapped in a bit of a funk. The good news for the broad market is that the activity has been comprised of both new inventory that has sold quickly, and aged inventory that finally fell to a suitable price and was absorbed.

Along the lines of new inventory, the large lakefront parcel at pier 514 came to market this summer and sold this week for $3.95MM. It was originally listed in the mid $4s, which is a price that made sense. The parcel was 186′ along the water and 3.7 acres deep, and it was deserving of the attention the market paid it. I should have sold it, as I had several parties interested, but alas, I wasn’t involved in the transaction. At $3.95MM that’s a reasonable sale price, and we can now expect that the home will be torn down in the coming years and replaced with some new ode to importance.

Other sales this month include my listing on Bonnie Brae- $2.65MM for 2.75 acres of Snake Road woods, and 100′ of dead level frontage. The parcel on Oakland sold, that of an unremarkable ranch with 100′ of elevated frontage, closed for $1.7MM. The entry level house in the Highlands that I wrote about earlier closed for $1.305MM, and three off water properties in Cedar Point (2) and Academy Estates (1) sold between $615k and $1.2MM. All good sales that make sense, excepting maybe one of the Cedar Point houses because I don’t love houses in the $600s that lack good views, slips, or anything unique. The small ranch in Cedar Point that feels like lakefront but isn’t is now under contract in the low $1s. I sold my Eastbank listing this week for $1.195MM, a fully furnished, highly polished gem with slip, view, and short walk to downtown.

Activity remains strong, as sellers entice buyers with slight price reductions to make sure they know the market is still open for business. One such maneuver occurred on Lackey Lane. A pretty Pickell house hit the market this summer for north of $5MM. The market, even in its sometimes irrational state, didn’t bite. $5MM+ is still rare air here, no matter if a few homes that had no business selling north of $5 did just that. The Lackey house dropped a few times, settling last week in the mid $4s. I brought in the buyer last weekend and that property is now pending sale. I sold it because the seller wanted to sell and a buyer knew that it didn’t matter what time of year it was, a good house is a good house and a good price is a good price. Thanksgiving season or not.

For the remainder of 2015 expect very little by way of new inventory, though that doesn’t mean there won’t be any. Expect buyer activity to slow, bearing in mind that motivated buyers will be active and will, most likely, secure a reward for being active while others sit out the season. If you could plan a time of year to be a successful buyer here, it wouldn’t be June. It wouldn’t be February. It would be right now.

Real Estate 201

Real Estate 201

I fear this job of real estate is a no-win proposition. There is very little left to do here, little left to prove, little that can be done to change the outcome. The profession is a miserable one. It is miserable because it must be, because any profession that so easily takes the blame cannot ever be a noble profession. If I were a plumber, this would be noble. I could hang out a sign, Dave’s Plumbing. What a sign it would be. I would have a truck, a big four door truck with leather seats so that when I was done with work on Friday I could clean the seats and take my family to Chili’s. Then, on Monday, the phone would ring and I’d need to go fix a leaking sink. The lady who would call would be frantic. I’d rush over, fix the leak, be a hero. And I’d charge $129 for the visit, which would be paid quickly and happily by the leaky sink owner. My effectiveness would be tangible. When I showed up the faucet leaked, then I fixed it. I fixed it. Without me, the sink would still be leaking. I’d do that five days a week, this hero work, and then I’d clean my truck and I’d go to Chili’s. That would be rewarding work.

This real estate business is not rewarding. If you hear of a Realtor who says their reward is in the smiling faces of their clients, they must not have very many clients. It’s very easy to be happy in the business when you get to sell a few houses a year, and each one is a splendid surprise. It’s different when you must sell many, constantly and without pause. There are no victories in this business, only temporary breaks from the battle. The breaks last hours, if that. That’s because the industry has never, ever, created an environment of respect. There is no respect for the Realtor. This is not a grievance, nor a litany of self pity, this is only an accurate observation. There is nothing noble about this profession, about this work. There is no level at which the job of Realtor could be elevated to be something meaningful. It is a position filled by those who either have little else they are capable of, or by those like me, who felt they could excel at the post and perhaps, just perhaps, change a few perceptions along the way. I was right about the excel part, wrong about the shift in perception.

No level of proficiency can shift the perception. No level of effectiveness, of success, of individual service. I closed a transaction recently that was a win for all parties. The buyer found the rare bit that fit their needs. The seller sold quickly, easily, efficiently and at a market rate. There were no losers in this sale, only different sorts of winners. The job of Realtor was administered by this guy, and the job was done with proficiency. Everyone succeeded in this sale, yet, for the success, there is a bad guy. Lest you not understand the business, the bad guy is always, without fail, the Realtor. That’s not because Realtors are, by nature, bad, it’s because the Realtor is the link that holds these individual transactions together, and it’s the Realtor that bears the brunt of the unrealistic expectations that the different parties bring with them through a transaction. Realtors might make lots of money on television, and they might wear super pointy shoes and drive sportscars, but the business, even at that outrageous level, requires a serious dedication. Dedication to the deal? Sure. But really it’s dedication to being treated poorly, as an overpaid, unnecessary cog in the transaction. The irony here is that most times the transaction would not exist without that cog.

Most of the trouble in a real estate transaction involves perception. Buyers and sellers, perceiving what they will, understanding the business and the process as they will. Their understanding is not universally accurate. The customer is always right, except when the customer is usually wrong. But it’s about the perception and the way different parties enter into an agreement to sell a home. There are showings, which are good and tedious at once. There are offers, some bad, others good, most requiring work to bridge. The game of real estate is, up until the point of accepted contract, just that, a game. It is a game to find the properties, to list the properties. It is a game to negotiate a deal. Negotiations are games with serious outcomes, but they are most obviously a game. This is the game that some clients love to play, and this is a game that I’ve become quiet capable of winning. But the process ceases to be a game at the point of contract. What comes next is the work of actually selling a property. The point of contract is not the end of the process, but it is the end of the game playing.

When a party to a transaction adopts the juvenile approach that sees the entire process as a game, the transaction will, without fail, turn ugly. Will the buyer see the seller turn ugly? Will the seller see the buyer turn ugly? Well, that depends on the Realtor. If the process is being handled correctly, the ugliness that is pettiness will be masked by the go between, by that unnecessary cog. This morning I am not intending on whining, though I can hear the whine coming through the keyboard with each new letter. This morning is intended to serve as a reminder to the parties of a transaction. There is a goal in this game of real estate, and that’s to sell or buy whatever real estate is in focus. Play the game, negotiate, win. But once the dust of a contract has settled, recognize the task at hand. Complete the transaction. Be flexible to understand the situations, be attentive to a buyer’s request. When selling real estate, do so with a grain of salt, knowing the goal is not to win each individual battle but to win the war. When buying, think of the process in the same way. But just know that if you’re unreasonable or otherwise inflexible, it will, at the end of this day and every day, be the fault of that unnecessary cog that made the entire thing happen.

Basswood Sells

I’m really bad at selling homes I don’t like. I show homes I don’t like, and then I think, I don’t like this house. I have to play along as though I think it’s fine, but generally I don’t play along all that well and my personal opinion is obvious. This is also the reason I’m not that good at advertising. I can’t speak to the lowest common denominator by utilizing font sizes and words that are statistically proven to motivate buyers. Words like DATA.

A few weeks ago, I read a real estate description that said something about “this breathtaking house will take your breath away”. It’s uncertain if the house takes your breath, then gives it back before taking it again, but the consuming masses might like that sort of thing. Then last week I read a description that promised the most dazzling house you, or I, have ever seen. In fact, we wouldn’t believe this house if we did see it. The house that generated this superlative narrative? A super crappy farm house on a highway.

My write up would have been, “That highway isn’t really a big deal. It’s not. In fact, I stood out there once and barely a dozen semis drove past, and most were coasting and all were recently washed.” I just can’t fake my way through this real estate game very well, which is a serious flaw in any Realtor’s character and will, ultimately, lead to a complete absence of business and a starting position at the Lake Geneva Starbucks, assuming I can work my way up from coffee bean bag stacker guy.

Last week, another lakefront sale on Geneva. That makes eight lakefronts closed since September 1st, which is rather astounding. That means the summer activity was strong, which we already knew. This sale was on Basswood, that of the large ranchy home with 201′ of frontage. That home originally hit the market at $5.875MM in the summer of 2014, and just sold for $4.835MM. That sale is a nice sale for the market, and it’s a nice sale for the agent who handled both sides of the successful closing (it wasn’t me).

It wasn’t me because that seller wasn’t my client, which is good, because my write up would have struggled to avoid the mention of drywalled arches and so much carpet. The home that sold was on nice dirt. Absolutely nice dirt. But the house was a Baywood Heights ranch on steroids, and so it either found the right buyer who loves the aforementioned features, or it found the right buyer who loves the dirt and figured they could make the drywalled arches go away through some creative trim work.

Two other lakefront sales that I hadn’t previously mentioned include one on Harvard in Glenwood Springs. It’s an old house up on the hill without private frontage, but at a $1.72MM closing price it’s a fine property. The other was an odd home in Geneva Manor that lacked a garage, a yard, and any outward facing style, but it sold because it had ample space and a young family wished to be in that association. That home, as an aside, was one that I had a shot at listing but I blew it because I didn’t love the house enough. I should have gone on and on about all the Oak, and I should have feigned knee weakness at each baluster and stair tread, but I didn’t, and I said it was nice and fine but that it was worth around $1.6MM. The house was listed at $1.75MM by a more Oak-Enthusiastic Realtor, and then it sold for $1.65MM.

My take aways from these sales have little to do with the market. They have to do with me, and how I’m pretty sure now that if I’m going to continue to be successful, I’m going to have to get better at faking it.

Geneva Lakefront Sales

A long time ago, I decided to write a real estate blog. Along the way, there have been some really bad posts. There have been a scant handful of good ones. There have been irrelevant ones, poignant ones, others. There have been times when I wished for nothing than to stop this writing and there have been other times when I wished for more time, to work harder at this, to effort on a different level. The blog was always intended to be somehow different than a typical real estate blog. For instance, I’ve eschewed the use of multiple exclamation points. I’ve also never pretended that posting a picture of a pretty pier was something that an insightful blog would ever do. I’ve made some people happy, and I’ve hurt some tender feelings. Let’s talk about those.

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Every day, all day, stock market pundits talk about stocks. They talk about this company and that company, about this CEO and that CEO. They talk about the things that make a company great, and they talk fearlessly about the things that makes the company bad. They’ll tell you to sell, or to buy, and when enough of them tell the audience to do one of those things in unison, the subject stock may rise. Often, when enough of the talkers tell their audience that a company is heading in the wrong direction, the stock falls. Billions are made and lost on these whims, yet the pundits talk and tell us what they know, hoping that what they know is more than what we already knew. I’d like to be able to do this for real estate.

And I have, to some tempered extent. Increasingly, however, if I say a sale is bad, or a house is bad, or a house is bad and the land is good, I hear the complaints. I hear of angry sellers, or angry buyers, or angry agents and their lemmings. I hear about the tender, easily hurt feelings of people who may have sold a house that I didn’t like. I hear from others who bought a house that the market didn’t like. I’m growing weary of the constant struggle to make everyone happy, and so I think I might stop commenting on the state of the market, on the state of a sale, on the state of this business.

Just kidding.

There was a sale last week on the lake, and I liked it. It wasn’t my listing, nor was it my buyer. I’m shamed by my absence from this sale, and from too many others this year, but not every buyer makes the proper representation decision and I must respect their mistake. The sale last week was of a shingle sided house in Cedar Point that first came to market in 2013 for $3.5MM. It may have been for sale before that, but I can’t recall the price or the year. That price was never right, but when the home finally sold last week for $2.185MM, I liked the sale. 103′ for that price in that location? I’m a big fan, and I always will be.

That sale was the 19th MLS lakefront sale of 2015. There have been two other auction sales, both achieving prices greater that my opinion of their actual value. Three of those sales have been in excess of $5MM. The 21 sales represent a huge swell of activity for the lake, and there are at least six more lakefronts pending sale right now. I’m expecting we’ll print those six, as well as three or four more before the end of 2015, making this year a most epic volume year. Last year at this date we had closed 15 lakefront sales, with nothing priced over $4MM.

For value minded buyers, consider this. November and early December offer some world class bargain hunting. Aged inventory generally feels like selling, and cool dreary days of November, the sort where fall slowly loses the fight against winter, those are the days we can make friends with rare value. While the year has been outstanding and lakefront buyers are milling about in record numbers, there is still value to be had if only you’ll look at those things that you’ve already passed over. Let me help you by pointing out the winners.