If I were to write about those woody things that grow from the ground, those things with bark and branches and leaves, I would probably call them what they are: Trees. I would describe them, with the bark and the roots and the branches that push back and forth in the summer breeze, and then I would use the word that this fine English language of ours has decided to call them: Trees. I’d write trees, trees, trees, probably many, many times throughout the course of my article about these things. Imagine my surprise that the Chicago Tribune wrote about vacation homes, again, and decided to avoid the most obvious vacation home destination for the most discerning Chicagoans: Lake Geneva. If the Tribute ever writes about woody things with bark and roots and so many leaves, do not be surprised if they leave the word with the T and the R and those two E’s, out.
The article, written more clunkily than most of these morning posts, makes many statements of supposition as fact. The article tells us that vacation home volume is down, that distressed sales are up, and that buyers who are considering Galena or Harbor Country are somehow similar to those sharp individuals who consider Lake Geneva. On most fronts, the author is wrong. Sales volume is off from the peak? Really? Would you believe that the lakefront and lake access sales between 4/14/13 to 4/14/14 are up 25% over the same sales from the same period of 2006/2007? The article dives shallowly into National statistics and tries to bend them into applicable local context, especially when it tells us that 42% of vacation home sales over the past year have been distressed sales. Would you believe that at Lake Geneva just .024% of lakefront and lake access sales during the past 12 months were distressed?
This is why I don’t like national context for local markets, because they skew buyer and seller sentiment by introducing facts that have nothing to do with the market in question. This follows my writings last week about the nature of subjective headline hawking when looking for facts and trends for any national segment. Did you see a lakefront property in Greenwich sold last week for $120MM? So did I. Did you know that it doesn’t have anything to do with your lakefront home on Geneva? I know you did, I was simply asking for the benefit of those national real estate writers who may not know the answer.
The Tribune piece works off of a few national statistics, a few local (Galena, Green Lake, and Harbor Country) Realtor’s anecdotal tales, and efforts to tell us that the Chicago vacation home buyer has a lot of options, and they are in complete and utter control. It’s a buyer’s market, after all, and if you don’t believe me, well, then, you certainly didn’t read Mary Ellen Podmolik’s definitive essay on the topic. She tells it’s a buyer’s market at Lake Geneva, because at Green Lake, a lake that is twice as far from Chicago as Lake Geneva is, it’s that sort of market. And at Galena, a resort area for people who don’t like large, clean, lakes, it’s that way, too. Harbor Country, a market that is represented by a photo of a Harbor, because that’s the only place you can keep a boat there, it’s like that as well, and buyers have all sorts of options at their disposal. It’s a buyer’s market, except when you’re in a different market, say, like Lake Geneva.
Those local inaccuracies aside, the real discussion this morning is about rentals, and their strange, tight ties to the vacation home market. The Tribune article cites rental properties not as some unique segment of the vacation home market, but as a standard issue inclusion, as though vacation homes are as much about rental income as they are about beach towels and sandals. I have always marveled at the close connection between vacation home discussions and rental prospects, and perhaps this personal confusion is due to the fact that Lake Geneva is not a rental fueled vacation home market. Sure, we have rentals at the Abbey Villas and at some of of the time share/ condotel type developments, but these are not the properties that make up the Lake Geneva vacation home market. Single family homes and residential condominiums, used as weekend homes for their owners, that’s what drives the Lake Geneva market.
Much of the discussion of rental properties as vacation homes stems from proximity issues. If you live in Hinsdale, and you think it’s a great idea to buy a vacation home in Aspen, then perhaps the rental possibilities are extremely important. Similarly so if you live in Barrington and you’re considering a vacation home in Georgia. Such purchases are subject to the very heavy, damning, travel tax. It’s not a real tax mind you, not yet anyway, but it’s the fee you’re levying upon yourself by buying a property that requires such an inordinate amount of effort to even get to. If this is your aim, then I understand the need to rent the property. It’s not easy to make a horrible decision palatable, but some rent may offset your egregious financial and personal mistake.
It’s because of Lake Geneva’s incredible proximity to our clientele’s primary homes that we do not need the silliness of rental to make this ownership work. Other markets, perhaps, but not here, not now. We’re a market for active home owners who wish to use their homes themselves, and have little interest in showing up to sleep on sheets that Joe Blow Renter just slept on the night before. To further cement Lake Geneva’s disdain for the vacation rental, Walworth County has imposed a 30 day rental minimum for nearly all residential homes here. Most of our lakefront condo developments limit rentals to long term tenures, or they ban them altogether. Rentals are not our thing, but then again, neither are distressed sales and low volume.
Photo by Michael Moore Photography.