May 22, 2013 by DC
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I am a paid subscriber to many, many ideas. For instance, I believe that you never, ever tug on Superman's cape. This belief isn't based on the reasons that you think it might be based on. You don't tug on Superman's cape not because you don't want to bother him, but because, in the event that you met Superman you'd want to sit down and talk with him, ask him about flying, lasers, etc, and you wouldn't waste your time tugging on his cape. Who would do that? Not me. That's why I follow that rule.
I also believe that lakes are not created equal. If they were, there would be no great lakes, no oceans, no ponds, no roadside ditches that fill with water. There would only be lakes. We would call Walden a lake and the Indian Sea a lake and the small pond outside of a condo in Geneva National that I have an inspection at this morning? Also a lake. So lakes, they are not equal, and I believe this. I also believe that Sasquatch, while unlikely, has to be based on something. What are these people seeing? And I don't mean the people in general, I mean the credible people out there. What did that police chief see on that night, so late that he was a bit tired but not so late that he had trouble making out an 8' tall hairy man leap across the road? What are these people seeing? I can't say they are wrong, but until I see a Sasqatch bounding across my yard (horrifying), or one killed on the side of the road, I'll just leave it alone.
I also believe that a buyer who might spend $1MM can spend $1.3MM. I believe this in the way that I believe a buyer who can spend $2MM can also spend $2.4MM. I also think a buyer who spends $3.4MM can spend $3.9MM. I believe these things because I know them to be true, and because I know interest rates to be low, and because I know that borrowed money is easy to pay back these days, and cash money is easy to spend. And it's because of these things--the lakes, the money, the tugging on the cape, the Sasquatch-- that I'm making a plea to vacation home buyers who are presently in the process of seeking a vacation home on another area lake.
These lakes are many: Buelah, Powers, Mary and Elizabeth, Delavan, Como, Lauderdale, and so on and so forth. Some of these names might be spelled wrong. All are capitalized, which is to suggest a proper noun in perhaps the wrong context. Should these lakes be treated the same as King Geneva? No, they shouldn't be. Nevermind that Geneva is rife with enchanting history, and never mind that it is the epicenter of all things fun and cool, let's put those attributes aside and judge these lakes purely for what they are. Geneva is large, wonderful, and a vacationing individual can find plenty of things to do at any given time. There is activity, yes, but there are quiet moments of generous peace as well, and for this, Geneva is the reigning king of balance. Other lakes? Not really so much.
The other lakes are cheaper, and this is their primary calling card. If you don't want to spend $1.3MM to buy a basic home on Geneva, you can indeed spend $700k on another lake to buy a similar home. This is important, and this is where these other lakes will be necessary additions to the Wisconsin real estate market. If you must find lakefront of the private variety, and you simply cannot spend more than $700k on that lakefront home, then these other lakes will do just fine. They will provide water to boat on and swim (yuck) in, and if the discernment of the buyer finds these two qualifiers as the only of importance, then the goal has been met. But what about the buyers that can spend more, and just don't feel like it. Is $800k on Lake Mary as good of an idea as $1.3MM on Geneva? The question mark is rhetorical.
If a vacation home buyer wants nothing more than to sit on their dock and watch the smallish water around them, this is fine. But tranquility mixed with more tranquility overtime grows annoying. That's why every movie that features a man moving to some remote tranquil environment ends up turning into a horror film. All that peace is boring. If I want to sit in my shaded front lawn at Geneva Lake, or sit on my pier and soak in heavenly sun, then I can do this for as long as I wish. But then, if all that relaxing has me bored, I can jump in my boat and cruise to the Riviera where I can tie up and walk into town for a coffee or an ice cream, or I can walk to Estreet and buy some jeans with holes in them to replace the jeans with holes in them that I'm wearing. I can do this, and intermix with people and things and then I can return to my pier and my lawn and rest. Similarly, I can leave my restful hammock and sit on my pier to watch a scow regatta, or I can sit and watch fireworks, if the weekend has cause for celebration, or I can jump back on my boat and motor to Pier 290, to Gordy's, to Chuck's to Cafe Calamari, or to the Abbey Springs Yacht Club and I can tie up and then sit down and have dinner.
While I'm doing that, the other guy in that quiet cottage on that quiet secondary lake is likely at home, bored, thinking about sharpening his ax. This weekend, this glorious, holiday weekend, it's time to get up to explore the area. Drive to Geneva, drive around it and rent a boat to drive over it and put on your swimsuit and dive into it (water temp 65 degrees), and live the lake. Then, drive to another lake and do the same thing. When you get bored, come on back to Geneva.
May 20, 2013 by DC
I have spent more time wandering than you have. If you've hiked the Appalacian Trail without a map, you have not wandered like I have. If you were lost in a desert for, say, 6 months, your feet have not logged as many painful steps as mine have. If you were to walk from California to New York and back again, you'd have to do this many times, perhaps without end, before you will have spent as much time on your feet as I have. But my wandering has been in the aisle of Lowes and Home Depot, so at least I'm not in any immediate danger from predators, unless you count the guy who came up with the MSRP on a lithium impact drill as a predator, which I do.
Hands on construction projects force these visits to these large box retailers, and now that most of the hands on portion of my project is done, I find myself no longer in need of anything in bulk. Instead, I need a package of drywall anchors, and I don't mean the sort that one hammers in, I mean the sort that screw in, of course. I need these, and I need a small package of felt pads for the bottom of a chair--felt pads that I only realized I needed once a scarring 6" scratch was etched into the middle of my living room floor. I need a bag of rags, and I need a single drill bit that's just a tad smaller than the screws that I needed the day before when I came to buy 4 screws of an undetermined thread and size. I don't need a bunch of anything anymore, I just need a few things in small quantities, and I need them quickly and without walking such a great distance. This is why I need a hardware store.
I have only recently enjoyed hardware stores. By recently, I mean I have only enjoyed them for approximately one week. I have spent my entire life logging miles in the aisle of mega retailers, and I have only now reached the point where I despise those stores and those aisle and the smell of it all. I have always parked on the sidewalk in front of those big stores. At the Lowes I park in front of the contractor door, always making sure to keep my eyes down while I hurriedly walk from illegally parked car and in through the sliding glass doors. I do this so I avoid the disapproving gaze of the store workers and of the other store patrons who walks many miles through the Wally World sized parking lot before even gaining access to then walk down the similarly scaled aisles. I do the same at the Home Depot, parking on the sidewalk nearest the No Parking sign. If you'd walked as many miles in these halls as I have, you've also earned the right to sidewalk park. It's a bit of an unspoken rule, even if no one else knows about it, including the people that make the rules.
Even so, I have now made it my life's goal to avoid large stores at any cost. I don't do this out of some increased level of retail consciousness. I am not an objector to large scale capitalism. I will not complain about how these large stores may or may not treat their employees, and I have never cared about the fact that the workers in each department rarely know anything about the department that they work in. This doesn't bother me one bit. I am staging this boycott for the simple reason of logistics. If I need four screws, why do I need to walk a mile to buy a bag of ten screws and then walk all that way back? This isn't about corporate morality, it's about efficiency, and my feet are tired.
The hardware store scene at Lake Geneva is bustling. There's Dunn Lumber in Lake Geneva, one of the newer feeling, nicer looking hardware stores. I go to this store because I use their contractor department for my construction needs, but I also go there because their power tool selection is better than the power tool selection at most hardware stores. Dunn Lumber is a good store, run by good people, in a great town, and I count on them when my car is in the 53147. Heyer Hardware is the Walworth hardware store. It's similar to Dunn, but different. It feels a bit older, and the aisles are a bit tighter. The people, however, are very helpful, the selection of chrome plated and stainless steel screws dazzling, and the house cleaning type supply section is immense. Best of all, I can squeeze my car into the spot that lies between two handicap parking stalls and walk a mere six steps from car to store door, and that's winning no matter how you cut it.
But these are hardware stores that have twisted their aim to serve the vacation home community surrounding Geneva Lake, and as such, they are a bit fancier than some hardware stores. For me, for my buck, my new favorite store is the Delavan Ace Hardware. It's older, this store, so it feels more like an old-timey store. Items are stacked high and pushed together tightly, in a way that suggests magnificent selections of everything without actually offering magnificent selections of anything. I've been going there, a lot. I went there the other morning for a chisel, because apparently door hardware doesn't just screw on like it should. There is chiseling and marking and pilot hole drilling involved, which is annoying. So I bought a chisel, and then a wire stripper, because my electrician left last week and now I can no longer peruse his tool bag to find what it is that I need to complete whatever task needed completing. I also bought some bolts, first small ones, then on a subsequent visit roughly 3 minutes after those screws didn't fit into the holes in my new headboard, I bought larger bolts, and those fit.
When I bought a new shotgun to protect this new farm, I forgot to buy some ear protectors. Instead of driving to the sporting goods store where I bought the gun, I just drove to the hardware store, asked the friendly fella where the ear protection was located, followed him a few aisles to the designated ear protection section, and picked between four or five different offerings. I bought the cheapest one, a diet coke, and two million dollar bills for two dollars because I am the person who late-sale retail offerings were engineered to attract. I skipped a few skips to the car and drove home. It would have taken longer to walk one time down the hardware aisle at Lowes in the time that I found, bought, and left with my hardware store finds.
When you're in Lake Geneva this summer, or Delavan for that matter, skip the big box store. Find your toolish treasures at the local hardware store and avoid the wandering. You'll feel like a different person, a better person, and if you need only three bolts and two washers, then gosh darnit three bolts and two washers is all you'll have to buy.
May 17, 2013 by DC
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There was a day during 2008, just before the market was to shift, that buyers would look at homes, make offers on homes, and then buy either that home, or, if the deal didn't work out, they'd buy another home. Then, on some cold day in March of 2009, when the market shift was apparent and unavoidable, that behavior changed. Buyers then would find a home they liked, make a bid on it, and if that bid didn't work out for one reason or many others, then they'd retreat back to the sidelines, waiting for their number to be called again.
Many times, their number wasn't ever called. They pulled back from the market to watch, to wait, to reconsider and to consider again. If you were a seller with a home that the now-retreated buyer was contemplating, you still held out hope. Maybe that buyer would come back. Maybe they just needed time. Maybe, just maybe, things were still going to work out. Often, that buyer never came back to the market. They made a bid on some sort of a whim, then they felt their feet grow cold, not from sneaking death but from growing fear, and they stepped back. They may have moved on to another home or a lesser lake or a worse state, but they made a foray into our market and then left, forever.
This is how things were from some strange day in early 2009 until some time last spring. Then last summer came, and fall followed, and winter too. Things changed. Buyers made bids, buyers pursued properties with purpose, and deals came together. Many, many deals. But this general improvement isn't the topic. Buyers recently have made overtures at properties, and written offers. They have negotiated. They have tried their very best to succeed in purchasing a vacation home. The shift now is that these buyers will make bids, and then, if met with seller resistance (which is a growing condition), they will retreat. This is how it has been through the crisis. But these buyers today will retreat and instead of sulking and lurking and finding ways to do anything but buy a vacation home, they retreat, regroup, and then they go and hunt down another property. The market, has changed.
For sellers, of course, this poses a problem. Buyers are no longer content to sit and wait on indecision. They want action, quickly, and then they want to either reach an agreement and close so they can move in their furniture that they haven't yet bought, or they want to wash their hands of the experience and move on to the next most potent object of their affection. They will not wait any longer. They write, they contemplate, and then, if the mood isn't right and the seller isn't game, they take their offer off the table and they drive down the road to the next seller will very well may be in the mood to negotiate just a bit more.
The lesson in this is for sellers, but in a way it's also for buyers. Sellers are growing increasingly confident, which, if you'll remember posts from the dark days of 2009, is the most important aspect of any market. Seller confidence is bad for buyers, just as seller apathy is the best thing that could ever happen to them. Today, apathy is low, and expected to go lower. If there were an Apathy Index, it would be low, and we'd still short it. The problem with seller confidence is that seller confidence can be based on fact, on comparable sales and on true market conditions, or it can be based solely on emotion. Seller confidence that is based on emotion is toxic, but most unfortunate is that it is also contagious.
Buyers, you have 7 days left before your lake-less Saturday mornings are going to feel absolutely horrible.
May 15, 2013 by DC
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It's true that the lakefront vacation home market has an epicenter. The impact zone, in this vernacular, is the lake itself. The market immediately surrounding the lake, those desirable lakefront homes, that's the primary goal that lies closest to that watery bulls eye. But the shockwaves extend far beyond that initial row of the fortunate, back one home and two, back one road deep and then beyond. The association homes that surround this lake, and surround the immediacy of the lakefront home itself, those are the homes that make up the bulk of our Lake Geneva vacation home market. Those homes are as varied as the lakefront homes that rest in front of them, with price points ranging from $180k on the low side to $1.4MM on the high. There are associations that offer slips and others that offer little besides a grassy patch of shared lawn that leads to a white pier, but perhaps less important than the association itself is the location of the home.
Last week, I closed on the home at 647 Hazel Court in Glenwood Springs. This home was one that you've seen around these margins for quite some time, and we finally found the right buyer one day during our rainy April. The home was in Glenwood Springs, which is a great association by any measure, and the home was clean, neat, and ready to live in, if still basic in finishes and style. The true appeal of this home, however, was not in the trim detail or the association, or the way the apple tree blooms in the spring just perfectly through that dining room window. The appeal here was in the location. This home was just three homes from the water, affording the new buyer the opportunity to walk from home to lake in less than 45 seconds, assuming they're walking slowly and deliberately in a manner that suggests they're savoring each step.
The location reminds me of the location of a cottage I sold last fall in Wooddale. If the Wooddale cottage ($417k) was a tad further from the lake, it had a slip and a view that was a tad bit better than the view from Hazel Court. The Hazel sale closed at $395k, putting the values pretty much in line. There are benefits to each and detriments to each, but by and large the two sales are of similar properties that might be in very different associations but are tethered together by the one thing that supersedes any association allegiances: proximity.
While it's fun when a buyer can afford lakefront, and it's fun when a buyer can afford a beautiful home with a boatslip, what if the aim is simply to find a cottage for $400k or less that boasts, as its primary attraction, easy proximity to the water? I've said many times before that I'd trade a slip and a view for ridiculous proximity, as I know the true magic of a lakefront experience doesn't generally take place inside the home but, instead, occurs on the pier and in the water and on the edge of a diving board with your toes wrapped over the edge. That's where the action is, and that's what I want to be close to. For $400k or less we're rarely going to find a slip, and we're rarely going to find a view, but what about the best candidates for those in that price range who just want to make that walk from their lake home to the lake in the absolute least amount of time possible?
Here's everything priced under $425k with access to Geneva Lake
, per the MLS this morning. I extended the search to $425k simply because I may be naive, and I'm not entirely sold on this whole "we need to buy homes for more than they're worth, and quickly! well, because, um, because the market has been magically healed!"
On this list, there are homes that fit our proximity goal quite nicely, and others that have lake access at the end of a long and arduous drive from the home to the water, and for the sake of brevity and generosity we will not pick on those homes today. The ones that are close, those are the ones we want.
Without a doubt, the best home on this list, today, in my opinion, is the listing on Upper Loch Vista for $339k. This home is an easy walk to and from the lake, and the association is divine, in a simple sort of way. Best of all, my parents live by this home, so a summer spent here just might feature snippets of me either hooking myself in the arm while fishing, or dumping over a sailboat, repeatedly. I like the price point, I like the location, and I like the home well enough. Another home on this list is in the Club as well, and deserves a similar look. The small cottage on Cain in Wooddale is close to the lake, and has a slip, but it is indeed a very basic and very small cottage, so the buyer will need to be somewhat unique to decide that the cottage as it is currently configured will work.
There's a listing on Park Ridge for $419k on this list, and that home has easily the best proximity to the water that one can expect for $400k or so. The home is one off the water, with lakeviews that will last throughout the year. The access is steep, so the buyer should not be afraid of a huffy walk back up from the water to the house, but the porches are ample, the style somewhat vintage, and that location is quite wonderful. The house needs work, as will most of those homes in great locations in this price range, but the reward of incredible proximity is well worth the effort.
May 13, 2013 by DC
Remember Jeff Goldblum's character in Independence Day
? You don't have to admit that you do, but you do. That character was personally flawed; his marriage either in trouble or over, his father meddling, his appearance slightly disheveled. Yet, for all his apparent shortfalls, he was the guy who understand what was going on before everyone else did. He wasn't exactly what everyone wanted, but he knew how to save them. This is important.
Last week, I went on a listing appointment. I wore what I always wear, with an elevated twist. This time, jeans were replaced with summer linens, a polo shirt was replaced with a button down variety, and my hair was at least somewhat molded and pushed into a shape that at least vaguely resembled a hair style from at least one historical era. I strode in with the confidence that tends to accompany me in most public settings, and when the hour or so was over I was content that I had secured another bit of business. My pitch included market knowledge, market statistics, personal knowledge and personal statistics. I laid out several anecdotal references to the lake, to my family, to my life. I offered what I knew and how I knew it and when it was done I skipped up the steps and drove off to the next appointment. The home was lakefront, nothing particularly noteworthy, but lakefront. As my business name suggests, lakefront isn't only something, it's everything.
Imagine my surprise over the weekend when that seller called to tell me they didn't like me. They didn't say, "David, we don't like you", but that's the interpretation of any denial of business partnership. I was shocked, truthfully. Honestly, shocked. I may have been too direct with my pricing truths. I might not have oohed or aahed at the right time. I might not have done either, at all. I might have just toured a home that fits only into the very bottom of the entry level lakefront market and called it as I saw it. I might have failed to verbally pad egos, or I might have missed the seller's internal price target. That, or I might not have worn a sport coat.
I own one sport coat. It is blue. It does not have gold buttons. I wear it only when absolutely required, which, so far, has been once. I look fine in it, but I don't feel fine in it. I feel like I'm trying too hard. I feel like I'm asking someone to approve of my sport coat, and then, perhaps, if they have some approvals left over, consider the content of my speech. I am 35 years old today. I have many gray hairs to prove it, along with a crushed disc that more closely mirrors a pier bolt washer than a vibrant and cushiony element of my spine, and a moderating weight condition. I also have been so fortunate as to amass over $60MM in Lake Geneva vacation home sales over the past 36 months, and that, to me, means far more than anything else ever could. If I had a sport coat on and combed my hair with a 50s purpose, yet I didn't have more than one or two lakefront sales to my recent pedigree, would I have had a better chance of walking away with that listing? Likely.
For today, a fair warning. I do not wear suits to work because I do not work in Manhattan. I also do not wear a nametag, nor do I have my picture on my business cards or the side of my car. I sell real estate because of the joy of selling real estate, and I work to achieve success based on what I know and how I say it, not based on the recent wax job on my car or the style of my haircut. I want to prove my worth to your transaction by what I know to be the truth of this market, not by the press on my pleated slacks. I am as informal as any broker ever has been, but the results are incomparable and the benefits that I can bring to any client's transaction far outweigh the cut of my coat.
Now, I must move to magazine editing. The fourth issue of Summer Homes For City People prints Friday, and as with the prior three issues, you won't find a picture of me in it, anywhere. Not of me in a suit with a gray photo backdrop behind me, not of me leaning up against giant letters that spell my name, and not of me pretending to talk on my phone while captaining some boat I borrowed. It'll just be a magazine, filled with content about Lake Geneva and Lake Geneva only, and hopefully you like it. Look for it Memorial Day weekend everywhere cool things are found around Lake Geneva.
Photo by Matt Mason Photography
May 10, 2013 by DC
The problem with my Hype-O-Meter from the other day is that I didn't properly take into account all of the segments of the Lake Geneva vacation home market. I left out a couple, and I'm sorry. So today, like a ref with who made a bad call in the first quarter, I will make up for my error with an equally overdone make up post at this stage, much later in the game. The Abbey Villas are most certainly part of our vacation home market, yet I ignore them from time to time, or, all the time. Abbey Hill makes up a portion of this broad market as well, and yet, with my flippant style, I ignore that association as well, unless I have just sold something there, in which case I'll tell you how wonderful it is and how smart my buyer is. Onward.
The Villas, those two bedroom condominium units that flank the southern end of the Abbey Hotel property, they have not had a nice run. Not of late, not of sort of late, not, in fact, since sometime in 2007 when that entire market reversed with a wicked shove of the throttle. The market here is still not well, and any attempt to make it seem so is an attempt at speaking life into death. There have been two sales this year in the Villas. It can not be ignored that the two sales there this calendar year have both been of REO properties. Both of these sales were at the lowest levels tolerated here- the $150k range. Yet, the market presses on, and after some reasonable sales during 2012, it shouldn't be unexpected if the market somehow finds its footing in 2013.
There are roughly 14 of these villas available, including one that I'm representing that was listed around $380k a few years ago and has just been reduced to $229k. These reductions are common in the Villas, and I can't see how it will be anything but a very long time before these prices return to the ranges that they enjoyed during the 2005-2007 peak. It makes sense for this reduction, given that the lakefront condo market is slow and units with boatslips at Vista Del Lago have been trading in the upper $200k range, which is a price point they hadn't seen since pre-2000. If the condo market is suffering, it stands to reason that those condos immediately off the water should suffer too. This is shared sacrifice, and the only winners here are the buyers who have been mulling a purchase in the Villas but have, over the past five years, been justifiably nervous about grabbing hold of that falling knife. I think things will improve here as this year moves on, not because of some fabulous narrative or marketing plan by some Realtor, but because prices have gotten so low that buyers can't help but take notice.
Abbey Hill, I like. I like it as much as, or probably more, than I like the Villas. I like it because it isn't trying all that hard to be anything except what we already know it to be. The Hill is what we thought it was, to paraphrase Denny Green in a much less funny, much less blood-pressurey way. There has been just one sale in Abbey Hill so far this year, also of a low priced REO property. There is one property pending sale here, so for a small development that isn't expecting too many sales during any given year, this is nice activity here. Since the spectacular fire that claimed a building in Abbey Hill, activity has been slow and steady, just the sort that I like for building sustainable momentum inside an association. Abbey Hill is a nice place, and any buyer seeking a simple vacation residence in the $200k range would do well to at least consider this development on the hill to the southwest of the Fontana lakefront.
Now lastly, a plea to the meat fishermen that will spend the next two weeks plucking bass and panfish off of their gravel beds inside the Abbey Harbor. Don't do it. Leave those fish to spawn, which, in case you didn't know, is how more fish are made. It's an important cycle, and yes, it's more important than you eating those fish unless you're straight starving and this is the only way you know how to put food on your table. And if it is the only way you can provide, then please go to Delavan Lake to do your bed-snatching. I hear the fishing is great over there.
Photo by Matt Mason Photography
May 08, 2013 by DC
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I've listed one of my great regrets as my unwillingness to play basketball in high school. As I move farther from this decision, the regret grows. Of all the things I have put off or not done, this is nearly paramount. If, for instance, I had aim to travel to Africa, where I might ride an elephant, this goal might be somewhat difficult to achieve, but it is still achievable. I can book a ticket on Air Africa, and I can book a tour on Elephant Riding Tours For Americans, and then, after some considerable expense and many vaccinations, I will have accomplished this goal. I cannot, however, go back and play basketball in high school. I can never feel the rush of a break away where I might try so desperately to time my dribble with my steps, and I can never know the joy of a dunk or the agony of the failed attempt. No matter what I do from this day forward, I cannot go back and capture that opportunity.
I was hyped at the time, as much as any high school of maybe 80 kids can hype anything, and the hype was my drug. I enjoyed the attention, I craved it. I loved playing against the basketball player types and defeating them. But I didn't play because the fear of not living up to the hype was greater than my desire for accolades. I remember, a few years after my window had closed, playing basketball in some winter league against many of the kids that I used to play 21 against during our lunch hour. I was slower by then, clumsier than I remembered being. On one particular play, I was fouled. I proceeded to the free throw line, dribbled twice, bent my knees, and shot the free throw. It was short. Like two feet short. I had just thrown up an air-ball. Whispers ensued, and whether I actually heard it with my ears or just heard it in my head, someone said, "Dave Curry just air-balled that free throw".
I made the next one, but the damage was done. The hype, that great hope that I lived with for many high school years, was rendered unwarranted. I wasn't deserving. And that's the danger of the hype- the inability to live up to it. In our markets today, there is plenty of hype. I fall victim to it at times, particularly if the hype is warranted. If I tell you that a new listing will sell quickly, and that, if you're interested, you should proceed to its doors quickly, then this is me hyping a property. If that property sells quickly, I will be proven right, and if it fails to sell, I'll have shot my own air ball perhaps 14 years after I shot that last one. The hype is a Realtor's best friend, but shouldn't it also be a Realtor's worst enemy?
It should be, but it rarely is. If an agent screams about a property and waives their arms and tells you to BUY BUY BUY, that's fine. But what happens when that property doesn't sell, not quickly, or sort of quickly, or ever? Doesn't this count as a strike against that person? It should, but too often consumers do not demand honesty with consistent accuracy. There is much hype today surrounding our real estate markets- much of it coming from Florida and California. Much of the upper bracket is a buzz with mass purchases from Larry Ellison and Ken Griffin and the like, but these real estate fantasies fail to take into account one major sticking point- the market is not rife with billionaires.
This hype, how can we tell if it's legitimate, warranted, worthy of our consideration? I suppose we could just continue to speculate and point to the purchases of billionaires, and point to the influx of foreign buyers in markets like Manhattan, South Beach, Tahoe and Aspen, or we could actually, you know, check the market activity in our particular market. I know, I know, it seems like too much caution, to measure hype against facts, but how else can we really know if the hype is legit, or if the hype will some day show up and chuck up an awkward air-ball?
A quick scan of all segments of the Lake Geneva vacation home market will give us all the info we need, so here goes. Abbey Springs, per the MLS, has two units pending sale. The lakefront condo market on Geneva Lake has just one pending sale, that of a short sale at Somerset- a unit that has been under contract for quite some time. Geneva National has a bit more activity with 9 properties pending sale today. Not bad, by any stretch, but if Abbey Springs clanked off the rim with aggression, and the lakefront condo market just barely drew iron, then Geneva National had a near miss but didn't qualify for the shooter's roll. Hype Index: Marginally unwarranted.
The lake access market surrounding Geneva has five pending today, including one priced at $1.3MM that I wouldn't have pictured selling in such short order (sold just a couple weeks after coming to market). In a segment with 75 or so active properties, I can't imagine anyone proclaiming 5 of 75 to be a good percentage. The lakefront is doing much better, with three pending sales at the moment, though all three of those are of entry level properties priced under $1.4MM. There are many offers circulating, but those offers are facing headwinds as sellers bolster and buck and cling to their prices a bit tighter than they might have otherwise done. The market is improving and sellers know this, so they are looking to comps and are unwilling to bend below those suggested values. Can we blame them? No. Can we call the hype surrounding the lake access and lakefront market a pure, tickle the net swish? Unlikely.
If the markets are mending, which they most certainly are, this is a wonderful thing. But let's not get ahead of ourselves and waste too much breath hyping the next great thing. Chances are there will be at least a few air-balls thrown up in this very long process.
May 06, 2013 by DC
My name is David Curry, I'll be 35 years old next week, and I live with my parents. In their basement. This is full disclosure, and something you should know, but not because I want you to feel sorry for me and for the fact that I had to take a shower this morning in a shower that left me feeling more like Chris Farley changing clothes in an airplane bathroom, and certainly not because I want to you feel all that much embarrassment for me. Instead, you should know that because my parent's home, however humble it may be and however small and annoying the basement shower might be, is on the lake. This lake, the lake, the only lake that matters today and every morning on these pages and the only lake that should matter to anyone at any point in the history of time itself.
The windows in this basement bedroom are at ground level, and they look out over the lawn with the perspective that any small land animal knows very, very well. So these windows look out over lawn, over grass that has grown too tall over the past week, over the grass that since I live in my parent's basement I will not agree to mow until my dad offers me either $5 or the keys to his car this coming Friday night. But the windows look past that grass and onto that lake, and last night as I walked into that somewhat musty basement bedroom, with the lights of the house off, and everyone asleep except me, I couldn't help but lean against the ledge beneath those windows and look out to the lake. It was still and it was glowing, with the outline of the opposing shores visible, and few lights sprinkled up and down the eastern coast. It was a spring night that through those windows looked like a summer night. And I liked it.
These windows face East, like I said. At night, there is no sunset to behold and to snap pictures of and to ooo and ahh over. But in the morning, when these west facing windows and dull and dim, these old east facing windows are alive and bright and full of life. This happens early, even now. It must have been before five when the first light slowly seeped through those windows and onto my face. Then, more of it, buckets and buckets of light, flooding the room and ruining my sleep. I woke up entirely too early, stood to make sure I still could, and looked again out the windows. The glow of late night had been replaced by a sheet of visible, tangible glass. The colors were those of a high gray sky mixed with the pale green shoreline, and the only waves I could see were created by two loons that broke the surface now and again to grab a breath of air before returning to raid the depths for some omega3.
After the shower wherein I bruised my elbows on the walls and the door and knocked the bottle of soap off the too-skinny ledge at least twice, I returned to the bedroom and to those basement windows. The silver lake that I had left 10 minutes before was now alive with color, with oranges and reds and still some silver, but only so much of it that hadn't yet been pushed aside by the sun as it worked and burned and struggled to free itself from the haze of those high clouds. The lake was the same, still, glass, but totally different. It was different the night before too, and much more different in pictures show early during the day before, when the wind tossed the surface and the blue sky reflected perfectly onto even deeper blue water. The lake had, in the period of several hours, changed outfits at least four times and dazzled in every one of them.
I suppose this is the power of a lakefront home. That home can have a musty basement, a small shower, a futon that your son sleeps on that is of questionable origin (garage sale, or just set by the road for the trash man?) but none of that matters much once you stop looking around you and instead look out the windows. The lake is always there, always the same, but always different. Spending the next four days in that basement while I kill the transition between rental and the new home move in date might not be ideal, but the scenery can't be beat.
May 03, 2013 by David
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If we have 100 buyers, some slowly seeking and others desperately seeking the real estate that their heart desires and their wallet affords, how many of those buyers does it take to create market momentum? If all 100 are indeed buyers, even once we've established that they are, as they say, buyers, it's true that 15 of them will prove to be anything but. If they say, I'm a buyer, this is how we know that many of them are not what they pretend to be. Where once we had 100, we now have just 85. Once we look over those 85, some bold and others shy, some in a hurry and others barely aware that there is a housing search in progress, we should likely place 35 of those remaining 85 into a group where we'll justly label them as lookers. They are still buyers, and they aren't the pretenders that the first 15 were, but of all the things they are, most obviously they are not soon-to-be-buyers.
And what of the 50 that we have left? If those 50 are all standing, some sitting, and we survey the group, it wouldn't be a stretch to say that 20 of those buyers are exactly what they say they are, but they are the sort of buyers who find no particular urgency in the search. They are, by my eye, the sort of buyers that are planning to live forever, and even some after that, so they feel no particular motivation to enjoy their life now, because, as they know, there is plenty of time for such enjoyment at a time when they have traveled farther down this road. If they live to be 200, they may find the time to vacation here on their weekends, which is fine by them, because to this select group time is the one thing they have on their side. Of course, they are wrong, but don't dare tell them that. You'll spoil their immortality.
The 30 that remain are true, bona fide, legit, cream of the crop buyers. Of those buyers, 22 are patient, but intelligent and wise. They boast knowledge, fueled by their own research and fueled by this commentary, and hopefully, some of them will actually work with the writer of this blog, instead of just gleaning keen insight here and bringing it to the table of another Realtor. It should be a given that those who read here will reward the writer, but this assumes loyalty and loyalty is nothing if a difficult thing for a few buyers to grasp. This is for their shame, not ours. Even so, of those 22, they are sharp. They are aware. They are fully involved and they know that they too will someday find their piece of vacation home nirvana. They expect that this will happen soon, and they effort for it to, but they cannot control inventory and as such, they must be forced into a patient stance.
The other 8? The other 8 have bought into the feeling that 2013 is once again 2006, and that if they do not buy at this exact moment they will be forever turned away. They are the buyer who looked at a home for $2MM and passed on it only to buy the home next door that came to market for $2.5MM. And they pay ask, or close to it, because they are, after all, in an extreme hurry. They have thrown caution to the wind, which I don't entirely mind, as long as they have plenty of caution lying around and they feel comfortable sparing some of it, or lots of it. No matter, these buyers are rushed, they are excited, and excitable, and they have an agent who will feed them whatever looks right at the moment. They will pounce on a market with low inventory and buy something, anything. They are as the buyers on HGTV and others, and they have 30 minutes to view three homes and then sit on a park bench and make a decision by playing rock, paper, scissors. But this group has no time for childish games, so they abandon the scissors and plan ahead of time to call paper, so they might more quickly cut to this chase.
These are our groups, and it isn't difficult to know how many of these 100 must fall into the last group in order to spoil the market for the remaining 92. It take just 8, or fewer even, to take a market that is mending methodically, patiently, stably, and turn it on its ear. These buyers are out there today, for the first time in four or more years, and they are reckless and indefatigable. They will not be stopped, and they will pounce on over priced real estate in whatever form it presents itself. Of course, the trouble for everyone else is that these buyers can skew a market significantly, and it doesn't take many of them to do so. I'm wildly in favor of market recovery, but I'm in favor of a sustainable one. I'm in favor of market forces working with purpose, and buyers building slowly on the momentum. I'm in favor of a home selling for $1.2MM and then seeing the neighboring home sell for $1.25MM. What I don't like is the thought that a $2MM home sells and the neighbor, trussed with unearned confidence, asks $2.5MM. Worse yet, if one of our gang of eight rides in and the sunset is right, he just might get it.
May 01, 2013 by David
When I was in high school, I mowed a lawn in the Buena Vista Club. That's not entirely true. I actually mowed three lawns, nearly all in a row, spanning from the south by the tennis court and across the lower road and then a lawn that ran from road to road and finally, a small little house on the north end of the club. That house was small. It was white, with green trim, though remembering now might not be the most accurate way to verify that color scheme from the early 1990s. The house wasn't special, the owners not all that fabulous, the lawn mowing revenue generated insignificant. The house reeked of smoke, and on the occasions when I stood in the doorway with my hand out waiting to collect the $40, or $60, or maybe $85 that they owed me, I remember thinking that smoking wasn't the sort of thing I should consider adopting.
Whether or not that home was nice, or the customers friendly, or the grass green and mowed into somewhat straight lines, that didn't matter. What mattered then and what matters now is that the home was in the Buena Vista Club. To have viewed real estate in Buena Vista (herein after referred to as BV, to push off my carpal tunnel diagnosis a few more days), puts the viewer in a fairly select group. In my nearly 17 years of selling real estate, I have shown several homes in the club. By several I believe I mean three. In 17 years. And that's not like some other agent viewing three homes in the club over that time period, because I actually know where BV is, and I can find my way there without a map, a GPS, or a U-turn. The point here is simply: Buena Vista floats above the rest of our pedestrian market, buoyed by that rarefied air.
Today, a somewhat basic BV home in a somewhat basic BV location sold in a less than basic fashion. The cottage sold for $550k, after hitting the market just a month ago with an ask of $529k. The property garnered multiple offers and sold quickly to a cash buyer. The desirability of BV is undeniable at this point, but I suppose we should actually think about this sale in a subjective manner. Did it make market sense for a buyer to pay this much over ask for a cottage with no real lake view, no boat slip, and no real wow factor?
The answer, of course, is yes. If you're the buyer, the answer was, and is, yes. If you were a would-be buyer, the answer is also yes, though by now some bitterness may have set in and you wouldn't buy that house if they offered it to you for free (yes you would, but we understand your hyperbolic point). The house was in a proper price range, and I'd argue successfully that this sale tells us more about the broad vacation home market than it does the specific BV market. The simple truth today is that a property brought to market at the proper list price will sell. It will. It will sell, and while that doesn't seem to be a surprise, the reality is that the proper list price on a home brought to market in 2009 was no sure guarantee that the home would actually sell. This has changed, and this is better.
So the sale makes sense from a supply and demand standpoint, and it makes sense that the buyer paid over ask in the presence of other offers, but how do we like a sale with no slip, no view, basic finishes, and some basic features? For my money, I'd rather find my way closer to the lake, perhaps in Cedar Point Park, or Belvidere Park, or the Harvard Club (2013 marks the first year in four that I have not had a Harvard Club listing in the spring of the year). But I say those things with no deep attachment to Buena Vista, so I do not feel the possible nostalgia that a buyer who grew up vacationing there, or nearby, might feel. If we're viewing this sale completely as the broad market might, I'd say the sale is a good sale at a fair market price, which is enough to say about a sale that found me representing neither buyer nor seller.
I've been pleased with the sales activity in the $400k-$800k lake access market this year. There is life here where there had been just the driest of lifeless desert over recent years. I'm glad to see a resurgence in this category, and think that this middle market activity bodes well for the rest of our vacation home market. The primary difference between this segment and, say, our lakefront market, is that this segment has had quality inventory come to market during 2013. The lakefront market, by and large, has not had nearly as much new product hit the interwebs. For now, let's be happy for this new Buena Vista owner. Lord knows a summer spent lakeside is better than a summer spent anywhere else.