Imagine writing an article on the 1982 baseball season with a specific focus on stolen bases and not interviewing Ricky Henderson. That’s what the freelancers at the Wall Street Journal just did with the Lake Geneva market. Never mind their use of construction prices from 2012 as some sort of accurate market component, I appreciate the market attention from this publication.
As the WSJ article noted, the market at the lake is indeed tight. We all know that. But it would be a grave mistake to not see beyond the current state of our limited inventory. Consider that today we have seven lakefront properties available on Geneva. Seven. Not a single one of those homes is under contract. The WSJ article failed to mention that little tidbit. The reason the inventory isn’t being absorbed is because the ownership here is largely unwilling to recognize the cracks in the national real estate market. The same WSJ wrote a glowing article on the Whitefish, MT market last month and yet most of the emails I receive from a broker there are touting price reductions. Bloomberg had an article yesterday about the Austin, TX market where price reductions are quickly becoming common after being entirely absent from the market for the prior 30 months. Mansion Global reported today that the Manhattan market is trailing off due to the downturn in the equity markets. The markets are moving, and if you want to know if Lake Geneva is immune, just check on our seven available lakefront properties that are heading into Memorial Day Weekend without pending contracts (per MLS).
Does this mean the cracks represent the initial signs of a significant downturn in these markets? Not likely, but even interjecting doubt into an asset class that spent the past 24 months mocking doubt will, as a point of fact, create some market headwind. If sellers were able to dictate pricing without any buyer interjection, we’d have seven pending lakefront sales this morning. That said, I am confident that this upcoming summer at Lake Geneva will be a robust one. There is still pent up demand. But sellers are going to need to read the entire newspaper, not just the freelance fluff, to understand where buyers’ expectations are and where they are headed. The market is hot, but perhaps it’s not quite that hot. Maybe, just maybe, buyers are following my advice which is to pay up for blue chip lakefront homes and leave the others alone. That’s solid advice in this market and in any other, at this time and at all times.