A week from today it will be March. March is a month that I grew up loving, but it’s a month that as an adult I’ve learned to really hate. March has a serious attitude problem, and it all starts with the silly “in like a lion out like a lamb” or vice versa nonsense. This old wives tale serves as an enabler for March, and March takes full advantage of the axiom. No other month is as sneaky and deceiving as March, probably because the other months have some level of self respect. March is a spaz filled with presumption. When I was in grade school, March was a month full of promise, and of possible coat-less recesses. I can still remember that the temperature had to be sixty degrees for the teachers to let us out for recess without our coats. I remember playing foursquare on those warming spring days, back when foursquare was played with four painted squares and a ball, not when it was some odd reach to make money off of Twitter. As badly as I wanted to recess without my coat on, I remember it was March when those first magical days arrived.
Only now do I realize that we probably had one or two such days in March, and that March is a month filled with the never kept promise of spring and the spastic lurches of a winter that refuses to die. At least January knows who he is. For all of my March hatred, the arrival of March will at least move me one month closer to my adored Lake Geneva summers. The fact that March is a mere week from today also means that throngs of Lake Geneva vacation home buyers need to get off their suburban rear ends and get their vacation home loving game faces on. March is a great month to buy a vacation home here, as the transitional month affords buyers an opportunity to negotiate a contract, delay closing until May if they desire, and still close in time to be settled in for a long, lazy, water splashed summer.
The market as of today is still sluggish, though signs are pointing to a fairly active March. The Cedar Point REO that I told you about last week had several offers on it within 24 hours of hitting the market, so that shows there are still bargain hunters with motivation out there. No, I didn’t think it was a screaming good deal, particularly if the purchaser is a speculator. The rest of the lake access and lakefront market on Geneva appears to have only four pending deals. There are roughly 120 lake access and lakefront properties available today, and simple math tells me that having only four pending properties isn’t a great thing for our market. I do have an accepted offer on the cottage at 34 Lower Loch Vista that you should have bought, and that deal is proof that buyers will still favor location over condition- if they have the vision to do so.
The entry level lakefront market might be the most intriguing right now, as values have inched ever closer to the million dollar market. The broader lakefront market still lacks quality inventory, as most of the homes, particularly at the upper reaches of the market, remain overpriced and under motivated. The slippage of value for entry level lakefront homes means the rest of the lakefront market should adjust, but it hasn”t. The most obvious individual market in need of adjustment is the upper range lake access market.
The upper range lake access market is priced from around $900k to $1.3MM. These homes are not lakefront, but do posses lake access, including possibly a view or a boatslip, or both. During the market climax, these second tier homes were desirable largely because entry level lakefront was so stinking expensive. If you came to me in 2006 and I only had a dumpy lakefront home for sale at $1.8MM, and you could buy a beautiful lake access home that was close to the lake and had a boatslip for $1.3MM, you felt like you were saving a half a million dollars for your compromise. Fas forward to 2010, and you’ll find that entry level lakefront much closer to $1.2MM, and yet the second tier home is still around a million bucks. It doesn’t make much sense to me, since private frontage should almost always be the goal if the price is similar. If entry level lakefront has slipped between 25% and 40%, it stands to reason that the market segment immediately adjacent should slip as well. But I’m just a kid from Lake Geneva, so what do I know.
Now you know I don’t care for the pricing in the upper end lake access market, but you should know that I still see value in active inventory. Lakefront condominiums have adjusted upwards of 20%, and a buyer should be able to find a deal in that limited market right now. The entry level lake access market, those vacation homes priced between $250k and $450k, also looks like it’s ready to give up a deal or three this spring. The more expensive lake access market, those homes priced between $500k and $750k also has some stellar properties on the market. The lakefront segment provides value right now, particularly at the low end and some lakefront homes priced in the mid $2MM’s. Again, the lakefront market needs to add well priced inventory if it’s going to have a year worth remembering.
All in all, it’s a good time for buyers. I hate mentioning interest rates, as the mere introduction of the term to this post makes me feel too much like a normal agent. (Buy now!! Before rates go up, up up!!! Prices are low, low, low!!! Check out my awesome graphics on the side of my super awesome car!!) That sort of thing. But the reality is that interest rates remain silly low, and they simply cannot stay this way forever. Or for another year. Anyone looking to finance a deal should at the very least take interest rates into consideration, even if they aren’t the motivating factor for a purchase. No, the motivating factor should be the thought of the warm summer sun finding you lakeside at Lake Geneva, not covered in sun tan oil on your suburban deck. See you at the lake.