Well, it seems that most of Chicago was scared away from the lake this weekend by that forecast. Thanks a lot, weather personalities. The weekend was rather perfect, with that big, bad snow storm barely dropping 3″ on the Lake Geneva area. A few more inches of snow are forecast this week on Tuesday night, and with the continued cold you will have an opportunity to take advantage of our forever-long Winterfest and come up this weekend. It’ll be great, I promise.
While most stayed home to count their money and watch that miserable football game yesterday, at least two savvy Chicagoans made the trip to the lake on Friday with money in their pockets. There were two lakefront closings on Friday, and while I probably should have been involved in both of them, I was pleased to be in attendance in one of the closing rooms at Chicago Title. The two closings were both fine enough properties, but it shouldn’t come as a surprise that I love the deal I was part of and can only sort of, barely, tolerate the other deal. The details:
My deal was on Oak Birch in Williams Bay, that of an attractive shingle style home with 80+ feet of frontage and a beautiful park running adjacent the property to the North. It was a home that sold in June of 2008 for $2.85MM. In reviewing comps from that year, it’s obvious to me that our market peaked sometime during June of 2008. I helped a terrific family close on that home last week for $1.81MM. That, my friends, is a deal and a half. Past values are not the only indicator of current values, but they sure are a nice guide. The home that we just sold was listed last August for $2.4MM, then was reduced to $2.15MM, which signaled to me that there was a possible deal to be had. I speculated privately to clients that $1.85MM may be an outside possibility on this deal, and when the right buyer stepped forward to seize this opportunity we ended up at $1.81MM. That’s a win in this market, and it’s a win for that family when they realize just how special a summer spent lakeside truly is.
There are market naysayers who will pounce on this sale, and in light of the prior high price and this new low price, they’ll say that real estate is a bad thing. That real estate destroys wealth. That real estate is best rented, never owned. To those I would offer up a remark made by the kind seller of this home. He told us that the property may have been a bad financial decision (as most purchases in 2008 proved to be), but it was the best family decision he ever made. This isn’t an endorsement of the concept of vacation home ownership coming from me, someone who is paid to bring you to these shores. This isn’t a tourism ad, cooed to you over some string music set to Photoshopped scenery. This is an owner, who was in the process of losing a significant sum of money, who said it has all been worth it. I’m not sure what further data points you need. (That owner upgraded lakefront homes, which is why he was a seller of this home.)
The other sale was one that I had an initial shot at, when I found myself at the listing appointment for this parcel of land to the East of Black Point, to the East of the Highlands. This property was nice, but I didn’t think it was nicer than a $2MM sale price. That was my opinion of value, and my opinion was wrong. The property was listed with another, more price-optimistic agent, and that agent reaped the benefits of a hot market when that property closed last week for $2.325MM. I wasn’t far off of my value, but I was 10% light, and that cost me the listing and the ultimate sale. While I represented neither party in the transaction, I’d have to guess the existing home will be torn down in order to make way for a new build. The lot is wide, at 150′, but the large home to the East is somewhat tight to the lot line, meaning the density there may look a touch disproportionate. Then again, I’m the guy who was wrong on the value, so perhaps I’ll be wrong on the outcome as well. Either way, a great sale for the market.
Two sales last week, four more lakefront sales pending at the moment, and undeniable momentum for this lakefront market. To the buyer whom I was lucky to work with on his new lakefront purchase, I’m grateful. Some lakefront buyers are prior Lake Geneva vacation home owners, and some are as this buyer, new. When you purchase a lakefront home here in January, it’s possible to envision a summer playing out on the frozen lake in front of you, but it isn’t all that easy. It takes faith to buy in January on a lake that you’ve never bought on before, and that faith will be rewarded on that first June Saturday that’ll be unlike all the Saturdays that came before.
Photo by Matt Mason Photography.