The lakefront market in late June of 2012 feels very much like it did in late June of 2011. We have sales pending today, plenty of them, but we also have individual pockets of relative weakness caused mostly by seller fatigue. It is not easy to try to sell a lakefront home for a very long time. It isn't just tough on the broker tasked with delivering liquidity, it's also an exhausting emotional and sometimes financial exercise for the homeowner. Some days, even on these hot, sunny days of summer, an owner just wants out.
That isn't to say that these owners have soured on Geneva, as owners rarely, if ever, do. But it is to acknowledge that life runs in cycles, and there are times where a Lake Geneva vacation home fits and other times when it does not. I added the part about a vacation home not fitting sometimes, but it should be noted here that I say this only in theory. If a Lake Geneva vacation home cannot fit into your life, then your life is miserable and over scheduled. But alas, I cannot convince everyone to re-shuffle other aspects of their lives, so the Lake Geneva aspect can end up as the aspect easily eliminated. Though, on a day like today I'm guessing anyone and everyone who might have at one point or another had a Lake Geneva vacation home wishes they had one again, or still.
Even so, it wasn't too many years ago that seller apathy was the key to a righteous buy side sale, just as it is today that the apathy can turn squarely into fatigue. A tired Wednesday seller is a great seller to find, as long as you're finding her on that Wednesday. The lakefront market today has activity- plenty of it. There are pending lakefront sales on Basswood (still), 700 Club (still), and a new pending sale on Harvard Avenue in Glenwood Springs. This pending sale in Glenwood is curious. The list price of the home, $1.9MM+ isn't anything terribly exciting. The home itself isn't thrilling either. Competitive inventory in that range has private frontage where this home has just Glenwood Springs frontage. With our detective hats on we must then deduce one thing from this pending property: It's going to sell cheap.
Or, at least, if we want to applaud the sale instead of cringe at it that's what must happen. The entry level lakefront on Geneva is to me, right now, the most exciting segment of the lakefront market. There is inventory- LaGrange, Sauk, Circle, Oak Birch, Bluff- all that might sell at prices that will be celebrated by buyers and derided by sellers. The danger in this segment for the sellers is that someone in this line up will sell cheap. One or more of these sellers are going to sell their property to able and willing buyers, and if the number isn't great, so be it. The first seller to sell is likely the smart seller. Better to set the market than to be forced to react to it. Remember our long, intimate talks about defensive selling? Well such a selling move is still prudent, and it still matters.
Look for the entry level lakefront to give up deals between now and the end of 2012. I expect three sales in the sub-$1.5MM range before the year is out, and that's just counting on current inventory and not taking into consideration the possible addition of more entry level listings. I see a few of the listings in the low $2MMs poised to sell in the upper $1MMs, and the definition of "upper" depends deeply upon the agent you're working with. My definition of upper is $1.51MM. I joke!
There are big lakefront listings. Massive ones. There are 8 lakefronts listed in excess of $5MM. Some of these can command their prices. Which ones? The ones that combine appropriate parcels with suitable residences. I am not interested in spending $6MM+ for a lakefront that has anything but the perfect parcel. The imported this and whale tusk that, this is fine and dandy, but it does not create value. If we're truly on the hunt for value we will discount the finishes- the gold toilets- and we will look first at the parcel. What does a $6MM parcel look like on Geneva? Well, for starters it better have 160+ feet of frontage, and it better be a deep parcel- perhaps two acres or more. It also better be void of any shared driveways or sticky easements. It should also be in a narrow geographic region where such other value exists or could easily exist in the near future. The parcel needs to be spectacular. The current inventory over $6MM? I see a couple that represent realistic pricing and a couple in search of a buyer who values a driveway paved in baby seal teeth over a magnificent lakeside lawn.
Expect more sales this year. Some sales are going to be unreasonable, others will be fabulous. Lakefront inventory on Geneva is a bit tired right now, and a new property here and another there will make for an exciting market. There are buyers out there, but many are ambivalent and looking for the next great value. Some sellers will wilt in the hot July sun, just as others find their target buyer with ease.