Summer Homes For City People- Winter Edition- Issue 16 by Geneva Lakefront Realty

CARRIE KOSTER

genevalakefrontrealty.com

Just a Dusting

Ice Out

Gray Again

Cover art an original work by Neal Aspinall. Magazine title, Summer Homes For City People was borrowed from a 1898 real estate brochure called “The Story of Geneva Lake,” written by F.R. Chandler, under the auspices of the Lake Geneva Village Association. This magazine was printed by David Curry of Geneva Lakefront Realty, LLC. Any questions relating to this magazine or to future advertising may be made directly to dave@genevalakefrontrealty.com. Reproducing any of this content without owner consent is prohibited.

Major Storm

31 Kids

This magazine is published for information and entertainment purposes only. Geneva Lakefront Realty LLC is not responsible for any claims, representations, or errors made by the publisher, author, or advertisers. For specific details, please consult your attorney, accountant, or licensed Realtor. Geneva Lakefront Realty LLC is a fair housing broker and limited liability company in the state of Wisconsin. Listings are subject to prior sale or price change.

SUMMER HOMES FOR CITY PEOPLE

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think it’s time you took a walk on the shore path in the winter. It might be slippery, and it’ll probably be cold, but there’s something about that summer-time path in the middle of a Wisconsin winter. You can see the shape of the lake in a way that isn’t obvious in the summer. Little bays here and there, nooks over there and crannies around that next point. The lake feels different in the winter, but does it feel any less captivating? I would argue that it does not, and that it’s winter when the lake reveals its true form. The year just ended was yet another spectacular year for the lakefront market at Lake Geneva. There were three closed transactions with list prices north of $10,000,000, and as you might have already guessed, I was thrilled to represent each of those three properties. With more than $146,000,000 in closed transactions for 2023 I finished the year as the top agent in Walworth County for the eighth consecutive year, and will likely end up as the top agent in the State of Wisconsin for the fourth year in a row. I’ve spent my entire life cheering for this market, and I couldn’t be more proud to represent not only the finest properties, but the discerning individuals who buy and sell in this, the most powerful upper bracket market in the Midwest. If the story of 2022 was that of inventory, then the story of 2023 was the same: but with a wrinkle. Our year end volume for 2023 was impressive, but for the first time in several years we saw a segment of inventory that failed to be absorbed in typical recent fashion. The market has softened some as we head into 2024, but with a rally in the equity markets and continued constricted supply, we just might have enough strength to overcome high long term interest rates that have damaged other, lesser, markets. I do hope you enjoy my 16th issue of Summer Homes For City People. My promise is that you’ll never find stock photography in my magazine, you’ll never read something written by AI, nor will you peruse photographs of houses that I didn’t personally sell. If you find yourself at the lake this winter and you’d like to discuss buying or selling Lake Geneva, please consider me at your service. No matter the season, there are deals to be made and I’m here to help you make them.

David C. Curry Geneva Lakefront Realty, LLC 323 Broad St Suite 101, Lake Geneva, WI 53147 262.245.9000 | dave@genevalakefrontrealty.com

SUMMER HOMES FOR CITY PEOPLE

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CARRIE KOSTER

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A world class vacation home market deserves world class representation. David C. Curry

#1 Agent STATE OF WIS CON S IN 2016 , 2021, 2022

$780+ Million TOTA L SA LES VOLUM E 2010 -2023

M A RKET S ERVED

#1 Agent

WA LWORTH COUN TY 201 4 , 2016 , 2017, 2018 , 2019, 2020, 2021, 2022, 2023

$4+ Million AVERAGE SA LES PRIC E 2020 -2023

$146+ Million TOTA L SA LES VOLUM E 2023

#1 ranking based on total transaction volume. State ranking per Real Trends + Tom Ferry The Thousand. Statistics deemed reliable but in no way guaranteed.

SUMMER HOMES FOR CITY PEOPLE

Just a Dusting

t’s snowing again. And the coffee

tasted the same. The man at the corner with the portable Stop sign waved, but he didn’t want to. The FREE AIR at the gas station was still free, the hose coiled on the ground, dirty and wet. The man on the television said it would be just a dusting, maybe an inch, two tops, but probably just a dusting. That’s what he said last week, Saturday. The wind blew and blew and the snow came in bands, alternating the sky between bright blue and dark with snow. Just a dusting he promised, but it was more than a dusting, it was an inch. My car has a low tire. It’s had the low tire for a month, maybe longer. The tire is new, which leads me to believe that there’s a nail somewhere in the tread, maybe a screw. Whatever it is, it’s sharp and it’s stuck in that tire and that’s why I leave the car in my garage most of the time. I washed the car a month ago, under an intense spring sun, so bright and so big that the water dried on the car too fast and now I have hard water streaks and spots. The snow today will help with that, but the snow might be hard, too, even though there’s barely a dusting in the forecast. There’s more than that on the hood of the car already. The fire is on again. I say it’s on, rather than it’s burning, because it’s a fire for lazy cheats. There’s a gas line under all that soot, and so when I make the fire it’s really just about turning a valve and then sparking a lighter. I bought the lighter at the gas station two days ago, about one month after the last lighter gave out. When I bought the lighter, I felt nervous, like a kid buying a lighter because I

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was going to go have a smoke with the cigarettes I found on the side of the road when I was walking home from school. It was spring then, too. So I told the gas station clerk that the lighter was for my fireplace, because I didn’t want her to wonder. The fire burns but it only burns because of the lit gas. I don’t have kindling here. There’s paper, some of the local one with my name in it because I’m a rebel who doesn’t like mass development when there aren’t masses of people to buy the mass produced vinyl sided product. But I don’t burn that paper because I throw it out. I mean, I recycle it. Yes, I recycle it, that’s what I meant to say. The fire burns wood that came from Black Point, from the back yard of a client’s house where he cuts down small, dead trees and stacks the cylinder-like logs. I load those into my fishing truck that’s really a silver Lexus and I drive those to my office. My son loads the wood into my open storage containers and when he’s done I give him three dollars. It’ll snow for a while still, I think. The man on the TV said it was only going to snow for a little longer, but no one believes him anymore. It might snow all day, it might not. It might be like last Sunday when the temperature rose 40 degrees during the day and then started the next morning where it had started the prior one. What sort of warm front only lasts a few hours? I asked the weatherman through his Twitter account but the question stumped him, so he didn’t answer. It’s spring now and it’ll only be a dusting. Originally Written April 8th, 2016. I don’t like weatherpersons.

CARRIE KOSTER

SUMMER HOMES FOR CITY PEOPLE

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PENDING F O N TA N A $13,900,000 SUMMER HOMES FOR CITY PEOPLE

Ice Out

y now even those who loved it had

started to hate it. The snowmobilers were over it, having long since fogged their engines and stowed away their sleds. The ice fishermen, once the biggest proponents of it had decided that they would no longer sharpen their augers. The guy who lives down the road some ways—the one who ice skated across the Bay as if he hadn’t a single land-based care in the world— he didn’t even feel like looking out his window anymore. This is why the town devised a plan. It had been decided that enough was, by now, enough. The ice had grown thick and strong, and the townspeople had skated over it, drilled through it, sledded across it. They had loved it. But that was then and this was now, and now no one had any time for it. There was so much sunshine and some tepid warmth, so some thought the ice would simply go away on its own. One old man said he hadn’t a doubt in the world that the ice would be gone by the first day of spring. The week that the first day was to occur, it was obvious to all, except that old man, that the ice was not going to leave by then, and in fact, some wondered if it would leave at all. At the meetings that followed, the once confident old man was no where to be found. At first the plan wasn’t all that clear. The ice would need to be removed, everyone agreed upon that, but how? One veteran of some peace-ship told of how he and his crew long ago would clean up oil spills by lighting the oil on fire and watching it burn. When some woman in the front row suggested that this couldn’t be true, and that she had seen commercials about how Dawn soap is what they use to clean up oil spills, everyone laughed. She continued, and so did the scorn. The peace-shipveteran spoke again. One time, he said, in the north seas they were cleaning up the oil by fire when he noticed that the fire not only consumed the oil, abut also the oil soaked birds and seals and even some fish, with it (the crowd gasped), but that it also ate away at the ice. He suggested that if we could drop a sizable amount of oil onto the ice, then light that

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oil on fire, we could easily remove most of the ice. After some deliberation, it was decided that this was not a well thought out plan, and both the man who suggested it and the woman who interjected that Dawn soap was how oil spills were cleaned up were removed, he for his outlandish idea and she for her naiveté. The ice persisted. At the next meeting, ideas were bandied about, with none carrying any particular heft because they were either entirely detrimental to the environment or because they were simply absurd. One idea, however, did stick, and great conversation and debate ensued. A young man in the back row mentioned that he had a helicopter, and that during prior efforts to thwart Western forest fires, he had piloted this chopper into the teeth of the fire to drop a payload. In the case of the Great Western Fires, or so they became known, he would drop a chemical fire retardant, and the fire would smolder and eventually go out. He said he still had the series of straps and pulleys that held that chemical container, and that this container weighed quite a lot and that his helicopter was strong and agile, and that he was a most skilled pilot. He continued by asking his fellow citizens what breaks up ice the best. People shouted, Fire! Sunshine! Rain! Then someone shouted Oil that’s been set on fire! and he was removed from the meeting. One child, a boy who couldn’t have been more than 12, spoke up. Rocks, he said. Rocks. The crowd quieted. He explained how he had sat on the shore just the day before, throwing rocks at the ice and watching each one plunk down to the slushy surface and then through it. If we could drop a large enough rock, during a most windy afternoon, the rock would break a huge hole in the middle of that lake, and the wind, with that new foothold to whip waves, would be able to do the rest. One environmentalist shook his head and explained how the fragile ecosystem of a lake such as this couldn’t be tampered with by adding one giant rock to the bottom of the lake. He tried to go on but he was removed immediately.

CARRIE KOSTER

The pilot said that his chopper could indeed hold a rock of this size and weight, but where would such a rock come from? It would have to be big enough to knock a hole in the ice, and that hole would need to be very, very big. There were rocks around town, sure, but none big enough. The crowd stirred. There was one rock, obviously, that everyone knew of. It was a large rock, round and smooth, worn down from so many teen-aged kissers and elderly leaners. It had been there forever, and there was no one in town that had known a life without it. It was a huge rock on the shoreline, and it had been featured in postcards from the turn of the last two centuries, and senior pictures and wedding photos. It was a rock, sure, just a rock, but it was more than that to so many. The meeting was adjourned and everyone was tasked with finding a suitable rock, but not that rock. The next night, some rocks were in the parking lot. None of them were big enough, none up to the task. So it was decided, we had lived with this iconic rock for long enough, and it was time that the rock gave something back to us. The rock would need to be sacrificed to the depths. There were protests, shouts, tears. One elderly women started to tell a story of how her father had come home from the war and how he proposed to her mother…

Security removed her before she could finish her story, because no one had time for that. The rock would be tied up to the helicopter, carried out to the middle, and dropped. There would be a pot luck at the village hall after. This was Friday, and the rock drop was to take place Monday. Anyone north of Geneva Street was to bring a main dish, while those to the south were to bring either a dessert or some bread (rolls, loaves, or otherwise). The town was full of nervous energy over the weekend. People called relatives, friends. Old village residents who had long since moved away made plans to travel back for the Monday morning drop. Everyone was excited, some were nervous, others cried. The young pilot was the hero of the town, and every man slapped his back and every woman kissed his cheek. But on Monday, it snowed too much and the chopper couldn’t fly in such limited visibility, so the entire thing was delayed. By Tuesday, everyone had realized what a horrible idea it was in the first place, and the town voted to just wait a little while longer. The ice wouldn’t last forever even though it really did seem as though it would. Originally written March 23rd, 2015. Sometimes, it seems as though the ice is never going to melt.

SUMMER HOMES FOR CITY PEOPLE

CARRIE KOSTER

genevalakefrontrealty.com

Gray Again

hat, exactly, are we supposed to do with this? We wake to the

dim light, not because it beckons us but because we must. We sleep with the pitter and the patter of ice and water landing on our window sills. We slip over the day, uncertain if the next step will be slushed or wet or frozen, and we return to our homes in the fog of evening, waiting until we can sleep and repeat the day again. Is it Wednesday or Tuesday? It doesn’t matter. Not now, anyway. I hurt my back the other day doing nothing in particular. It hurts today and it hurt yesterday, and without something changing it’s going to hurt tomorrow. It’s been hurting for twenty years. I’m used to it, like I’m used to this suffocating gray, like I’m used to the days blending and the night coming early. I’m used to all of this, and none of it bothers me anymore. There is nothing important to do today, but there are important days to come, and it’s so easy to prepare under this gray. The gray days are important days because they want nothing from us. They urge us to do nothing. They don’t distract, they don’t consume, they don’t ask. They just are and they leave us alone. Sometimes we need the prodding of a sunny day, and we expect to be rushed and to be hurried and when we are we complain that we have too much to do. There are too many places to be, too many people to see, too many bills to pay. Too much of

this and too much of that, and we want to rest. We need to rest. Under the brightest sky we have things to do and those places to find, but we wish we could just rest. We wish we could find our house in the early evening with nothing to do and no where to go, to build a crackling fire and watch it burn. To eat a slowly prepared meal slowly because there’s no where to rush to, nothing to hurry about, no one calling. We hurry and we race and we wish we could slow down until we can, and then we sit here in this darkness and wish we had somewhere to go. I wish it would be colder and sometimes sunnier and I wish the snow would build and the ice would skim and the fishermen would auger and the sailors would affix blades to their boats. I wish these things would happen in this season, but today they won’t. Tomorrow, nothing. Later in the month something might happen, the ice might return, the snow might fall, the men might reel in their tiny fishing poles and boast to the passersby of their pile of flopping Friday fish fry. But none of that is happening today, because today we get to move more slowly. We get to make that fire and eat that dinner and watch that game. We get to do these things and we shouldn’t complain, because these gray days are a gift that expect nothing in return. Originally written January 18th, 2017. Everyone hates the gray of winter, but not me. I enjoy the calm.

SUMMER HOMES FOR CITY PEOPLE

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CARRIE KOSTER

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Major Storm

’m not sure why you’re wasting time

reading this. It’s coming. Can’t you see? It’s not far away now. Last night, it wasn’t even close. No one cared about it, then. Cars drove and people walked, stores sold their goods and life was as normal as ever. Then it wasn’t. Things changed when this thing found its way onto the radar, close now. Nebraska, then Iowa. Eating these big midstates like they were those northeast mini-states. One by one, overwhelmed. Soon enough, the state line. Cars are driving faster now. The gas station is rationing gas. Five Gallons Per, the sign reads. Women are nervous. In the distance, the sound of a man, leaning on his shovel behind his garage, gently weeping, where his children cannot see his tears. Emails to check this morning. I’m trying so hard to find a distraction from the thing. Maybe this email will say something about anything else. Something about the shutdown, about the wall, something about politics or a war or a far away famine. But no such luck, the topic is consuming. News organizations, once enemies battling for clicks and subscribers, united in this front. United in their

warning. A modern day electronic air raid siren. MAJOR STORM COMING. Nothing else matters. And yet there you are, reading this, wasting time when there’s so little left. We might get snow tonight, so much that it’ll stick to the ground and stick to your boots. If you’re out in it, there’s a chance some of it sticks to your hair, or your hat, if you made it to the store before the last one sold. It isn’t just all this snow, so much of it that it might rise to the top of your ankle if you’re short, it’s the wind, too. A mighty wind, some would say, maybe the greatest wind ever. Coming off that giant lake, blowing hard, making it difficult to stand. The snow traps your feet, the wind pushes you over. Oh you’ll lean into it, but you don’t stand a chance. This is how it’s going to happen, the weathermen have foreseen it. Be safe, dear friends. Cling tight to your loved ones, to your life. The snow is coming, and it isn’t just any snow. It’s a Major Snow. If you don’t believe me, check your email. Originally written January 18th, 2019. There was a storm coming. We got a dusting.

SUMMER HOMES FOR CITY PEOPLE

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SHARISSE GRANNAN

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Kids

hen you’re a kid from the Bay,

you ride your bike to Geneva Street but never across it. You visit Lake Geneva when you’re 45 and still think of it as a big city. There’s so much traffic and stoplights and noise and sirens. When you’re a kid from the Bay, you stop at your parents' house and your mom is making cookies while your dad listens to a radio program on his phone that he stores in the breast pocket of a button down shirt. If it’s summer, the cookies will be chocolate something or other, but if it’s winter, they might have ginger in them, or they might be sugar cookies with Christmas colors piped around the edges. In the summer the cinnamon rolls are made in a sheet pan, but in the winter, the dough is twisted into a circle and we call it coffee cake and your dad used to deliver them on Christmas morning to people who always appreciated the tasty gesture. When you’re a kid from the Bay, you go to the candle-light service at the old Lutheran church by the school where your dad used to teach. The church where they held the wedding for your aunt and the funeral for your brother. The next morning you wake up at your house and you drive to that old home where you grew up. You open the door and your dad is sitting in his chair watching "A Christmas Story" and your mom is making eggs and bacon and orange rolls and cinnamon rolls. If it’s a clear morning, the sun blinds you in the living room, but the tree is in the corner and the train is choo-chooing around it and your youngest nephew is lying on his stomach turning the dial to make the train go so fast that it jumps the tracks, just like you used to do when you were his age. Your dad reads from Luke while your mom busies about to make sure everything is as it’s always been. There are places to go where the sun never stops shining. Other places where the mountains touch the sky or the sand touches the sea. But when you’re a kid from the Bay, there’s really no place you’d rather be.

SUMMER HOMES FOR CITY PEOPLE

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CARRIE KOSTER

SUMMER HOMES FOR CITY PEOPLE

CARRIE KOSTER

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SUMMER HOMES FOR CITY PEOPLE

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SOLD 40

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• MARKET

LAKEFRONT

SALES VOLUME 140,000,000

120,000,000

100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

2017

2018

2019

2020

2021

2022

2023

After a decline in 2022 that was likely caused by limited inventory, our overall lakefront sales volume rebounded in 2023 to nearly match the cycle high set in 2021. Most of this increase in total sales volume can be explained by a steadily increasing rate of upper bracket sales. For the year just ended, the top three sales presented list prices of $17,950,000, $14,000,000, and $10,995,000. While the upper bracket sales are great for our market, the most potent market is now in the $8,000,000 to $10,000,000 range, which largely features properties that were valued closer to $5,000,000 as recently as 2019. Showcasing the amazing strength of our lakefront market, we increased volume in 2023 while maintaining valuations. Most luxury markets across the country experienced a volume decline in 2023 combined with an overall softening of prices, but Lake Geneva outperformed.

Data from MLS and known sales. Data from 1/1/23 to 12/19/23, residential single family sales with private frontage only. South Shore Club and vacant land sales excluded. Information deemed reliable but is not guaranteed.

SUMMER HOMES FOR CITY PEOPLE

LAKEFRONT

• MARKET

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PRICE PER FRONT FOOT RELATIVE TO TOTAL FRONTAGE 140,000

120,000

100,000

80,000

60,000

40,000

20,000

100

200

300

400

500

600

700

genevalakefrontrealty.com

PRICE PER FRONT FOOT RELATIVE TO TOTAL FRONTAGE 140,000

120,000

100,000

80,000

60,000

40,000

20,000

100

150

250

500

genevalakefrontrealty.com

PRICE PER FRONT FOOT

• MARKET

LAKEFRONT

140,000

120,000

100,000

80,000

60,000

40,000

20,000

2017

2018

2019

2020

2021

2022

2023

Lake Geneva’s favorite metric continues to be one of my least favorite: The Price Per Front Foot. I generally disapprove of the importance that the market places on this defining metric, but I’d never pretend that it doesn’t matter. This revered metric has increased over the past six years from mid $20K to just over $60K for 2022 to a staggering mean of $72K in 2023. I intentionally left vacant land sales out of this detail, though it would be expected that a significant proportion of our single family sales have sold at land value as the market has a voracious appetite for new construction and sees most aged structures as tear down candidates. Something that’s not well understood is that the price per foot of frontage decreases as frontage increases. You can think of this as diminishing returns to frontage size, or price compression as you consider the larger properties on the lakefront. The idea is simple: If a high quality lakefront home on 50’ of frontage can now sell for $5M, that doesn’t mean an average home on a 200’ lot is easily justifiable at $20M. Do not make the mistake of assuming the price per front foot holds up as frontage increases. There is some noise in the data regarding these lakefront sales, and that stems from the persistence of off market transactions and the manner in which lakefront homes tend to transfer. It is common practice for buyer and seller to allocate a mutually agreeable dollar amount of the contract value to personal property. If a home contracts for $5M including some furniture, the pier and the shore stations, it might be agreeable to the parties to specify $300k of that price to the personal property transaction, which results in a $4.7M transfer of the real estate. The issue I take with the accounting of this practice is that it incorrectly reflects the true contract value of the transaction. In the case of Lake Geneva lakefront sales, this personal property allocation is now a market norm, and if we can guess that the allocation typically amounts to 3-8% of the contract value, then the presentation of comparable sales data is incorrect. Consider that as you review these numbers and if you think the prices are elevated, just remember the actual contract values are often higher than what is visible to the market data.

SUMMER HOMES FOR CITY PEOPLE

LAKEFRONT

• MARKET

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PRICE PER SQUARE FOOT 3,000

2,500

2,000

1,500

1,000

500

2017

2018

2019

2020

2021

2022

2023

Average and median price per square foot held in the $650-800 range for the four years of 2017 to 2020. In 2021 both the average and median gapped above the psychologically important level of $1,000 per square foot and increased to around $1,250 in 2022. 2023 built on that momentum further, with our median registering $1,437 per square foot. This data is skewed by the properties that sell as clear tear downs, and those properties that are highly polished but light on square footage. The price per square foot measurement is historically unimportant in our market, but it helps to know these metrics as we seek to understand appropriate valuations. Remember, any one of these pieces of data is not individually significant when trying to ascertain the value of any given property. However, when all of these defining characteristics are reviewed together there is a usually a clear consensus of value.

Data from MLS and known sales. Excludes Glanworth Gardens 2022 sale. Data from 1/1/23 to 12/19/23, residential single family sales with private frontage only. South Shore Club and vacant land sales excluded. Information deemed reliable but is not guaranteed.

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• MARKET

LAKEFRONT

SALES PRICE 18,000,000

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

2017

2018

2019

2020

2021

2022

2023

Even as the market normalized during 2023, we still managed to keep our average sales price in line with the prior year. One of the many reasons I don’t like trying to explain our market in charts is simply because of our small sample size from year to year. Any particular year can be heavily skewed by the existence, or absence, or outlier sales at the top and bottom end of our market. In spite of this, the data still reveals a nice trend line which shows a steadily increasing average price over the past six years, even though 2023 finished just under the $6.45M average price from 2022. The market has incredible strength at the upper end, a notable shift from just seven years ago when a $10M sale was seen as an outlier. Today, buyers have confidence that there is future liquidity in this range and sales should continue with frequency. The unique strength of the Lake Geneva market’s upper bracket was reinforced during 2023 when three properties with asking prices north of $10M sold (I sold all three).

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LAKEFRONT

• MARKET

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PRICE PER SQUARE FOOT OF LAND MASS RELATIVE TO ACREAGE 600

500

400

300

200

100

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PRICE PER SQUARE FOOT OF LAND MASS 600

500

400

300

200

100

2017

2018

2019

2020

2021

2022

2023

Just as with the price per front foot and the compression that exists as frontage increases, there is a similar relationship to price per acre. You’ll remember this chart and commentary from last winter’s issue, but it bears repeating. You can have a high quality house on a entry level sized lakefront lot and it has a floor to its market value which has dramatically increased over this period. But for very large parcels of land the absolute magnitude of the value means there is a smaller population of potential buyers and thus price compression at this upper end. Data from MLS and known sales. Data from 1/1/23 to 12/19/23, residential single family sales with private frontage only. South Shore Club and vacant land sales excluded. Information deemed reliable but is not guaranteed.

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Photo by Stoffer Photography

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LAKEFRONT

• MARKET

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SQUARE FEET SOLD 140,000

120,000

100,000

80,000

60,000

40,000

20,000

2017

2018

2019

2020

2021

2022

2023

2021

2022

2023

genevalakefrontrealty.com

ACREAGE SOLD 70

2017

2018

2019

2020

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FRONTAGE FEET SOLD

• MARKET

LAKEFRONT

3000

2500

2000

1500

1000

500

2017

2018

2019

2020

2021

2022

2023

Of these statistics, the one deserving of commentary is the Total Frontage Feet tally. You can see the total front feet sold tends to fluctuate between 1650 and 2600 feet on any given year. Did you know there is approximately 74,500 feet of private, residential frontage on Geneva Lake? The market likes to say there are 21 or 22 miles of frontage, but that includes municipal, commercial, and association frontage. The 74,500 number is reasonably close to the actual private frontage total, and when considering we sold 1740 feet of frontage last year (excluding vacant land sales), that means less than 2.4% of the lakefront traded hands last year. If you’d like to understand why pricing is where it is on Geneva, it’s imperative you understand just how little of our total market supply trades each year.

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CARRIE KOSTER

genevalakefrontrealty.com

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LAKEFRONT

• MARKET

genevalakefrontrealty.com

CASH DEALS 90

89% 80

81% 75%

86% 74%

64%

61%

2017

2018

2019

2020

2021

2022

2023

For a year where interest rates hovered over 7% for many months, I was surprised to see the rate of financed transactions increase over the prior year. A financed rate of just 26% is still quite low, but considering we had just an 14% financed rate in 2022 I find the number to be curious. If you were buying a lakefront home when interest rates were some variable of 3%, it made perfect sense why you’d wish to lock in cheap long term debt. But with rates over 7%, I would have expected more deals to be paid outright with cash, or to at least present as cash with funding behind the scenes via a PLA or PLOC. Regardless, the cash deal rate remains in line with recent trends, and I anticipate Geneva will always be a market where we close around 75% of our transactions with cash funding.

genevalakefrontrealty.com

• MARKET

LAKEFRONT

%OFF MARKET 60

58% 50

56%

38% 30

2017

2018

2019

2020

2021

2022

2023

If you pay attention to our lakefront market, you know there is a rather heated debate about the persistence of off market transactions. While many market participants decry the practice, you’ll see those same participants gladly engage in the off market process should the opportunity present itself. In spite of the occasional blowback, I remain a steadfast proponent of the practice. If a seller can sell at his or her terms, without subjecting the property to the open market, why wouldn’t they? The argument against this practice is that the open market very well might provide a higher price for that seller, and this is, of course, potentially true. But this isn’t a zero sum game, as a property exposed to the open market has no choice but to suffer valuation destruction if the property endures a lengthy tenure on the open market. Look to luxury real estate headlines the world around and you’ll see examples of open market valuation misses and their ultimate sales prices. Elevated market time does not come without a penalty, and that penalty is nearly always a diminishment in value. For the five year period just ended, we saw off market deals go from 0% in 2017-2018 to making up 58% of the total market volume in 2023. Much to the dismay of some, off market sales are here to stay, although I do suspect they’ll moderate in frequency in the coming years.

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F E AT U R E D

• LISTING

SOLD SUMMER HOMES FOR CITY PEOPLE

S U MME R HO ME S F OR C I TY PE OPLE

S UMM ER 2 01 5 - ISS UE # 7

Summer 2021 - Issue #12

genevalakefrontrealty.com

David Curry $639,341,798

Geneva Lakefront Realty

Compass

$224,741,590

Berkshire Hathaway Home Services

$82,844,000

Sotheby's

$71,256,880

Melges

$47,762,500

Lake Geneva Area Realty

$47,326,800

Remax

$29,652,750

@ Properties

$27,126,888

$50M

$100M

$150M

$200M

$250M

$300M

$350M

$400M

$450M

$500M

$550M

$600M

$650M

Calculations per MLS and known sales 1/1/10 through 12/14/23. Lake Geneva lakefront single family, vacant land, South Shore Club sales only. Information deemed reliable but not guaranteed. Minimum $20,000,000 in top agent Lake Geneva Lakefront sales

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906 SOUTH LAKESHORE DR

PENDING F O N TA N A $13,900,000 SUMMER HOMES FOR CITY PEOPLE

Testimonials “We have had the pleasure of working with David several times over the last few years, both on the lakefront buy side and sell side. His unique understanding of the market, the buyers and the sellers, is unmatched. We always felt the outcome was fair for both parties and the value of pricing or paying the right amount led to rapid transactions. David has also been invaluable in helping us assimilate into the Lake Geneva community, an area we didn’t know well.” – Tim, Park Ridge

CARRIE KOSTER

genevalakefrontrealty.com

"I’ve completed three transactions at the lake with David as my agent. His insight into the lakefront market and advice is unmatched. I think you’d be a fool to have anyone else guide you through this market and assist you with likely one of your largest personal assets." – John, Chicago

Forward Looking

• MARKET

LAKEFRONT

ne year ago I wrote my market forecast and suggested that inventory would remain

tight in 2023 and that pricing would be difficult for buyers. I added that sellers would find continued liquidity if they priced their properties consistent with comparable sales. As I look back at the year now ended it’s apparent that both of those pieces of forward looking advice held true. Inventory was present throughout most of 2023, but it trickled to the market which allowed pricing to remain consistent with 2022 (even though our price per front foot increased more than 15%). The timing of inventory is almost as important as the inventory itself, and Lake Geneva managed to thread the needle in 2023 in such a way that our overall market volume rebounded to 2021 levels even as pricing held steady. Find another luxury market in the country that featured an increase in volume 2023 over 2022 and pricing consistency year over year. The market in 2023 was buoyed by three upper bracket transitions, those with asking prices of $17.95M, $14M, and $10.99M, respectively. I was honored to represent each of those three properties, and two of the three buyers. The remarkable strength at the top end of our market has been on display over recent years, but the lakefront market did have one segment struggle throughout much of 2023. The entry level of the market remains intact with near instant liquidity in the $2.9-3.5M range, and that segment featured several 2023 prints to reinforce the consistency of that pricing. But the middle of the lakefront market, those homes priced $4.5M-6.5M struggled to absorb inventory that was largely available throughout the entire summer and into the fall. I would argue the market rebuffed several pieces of inventory based solely on aspirational pricing that looked to build upon prior sales rather than fall in line with them. If there’s one change in the market that became obvious to me in 2023 and should continue into 2024 it’s that accurate pricing should no longer look to a prior comp as a floor to value. If the last comparable sale was at $4.8M, then the next piece of similar inventory should be priced at $4.8M. This is in stark contrast to the pricing style of 2021 and 2022 when it was common practice to see a prior sale at $4.8M and list the next piece of inventory for $5.3M. For buyers, this should be viewed as a positive. Pricing should start to make more sense for those buyers who understand pricing should follow a comparable sale pattern. For sellers, this should similarly be viewed as a positive, as pricing is no longer wildly subjective. If you are a seller desiring liquidity, look to a prior comp and price accordingly. This shouldn’t be a surprise, but after three years of covid era pricing irregularity it has taken sellers some time to adjust to a new norm. The equity market rally from 2023 and a slow decline in long term interest rates should set up 2024 to be another solid year for the lakefront market here. Buyer demand has softened modestly, but as I write this commentary the lakefront inventory is limited to two active properties. A glut of buyers during the covid-era was nice, but I believe in 2024 we’ll prove that an even pace of supply and demand is more than enough to keep our lakefront prices stable. The key for 2024 will be a controlled supply of inventory and pricing that accurately reflects recent comparable sales. Aspirational seller pricing will likely be met with buyer resistance, but proper pricing will undoubtedly be absorbed with ease. If the equity markets hold up and rates continue to soften, I think 2024 is going to look a lot like 2023. As always, if you’d like to fully understand this deeply nuanced market and enjoy visibility into the on and off market maneuvering of the lakefront set, I’m here to help.

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MICHAEL ABRAHAM ARCHITECTURE a high-end residential firm combining an appreciation for timeless detail and an interest in the latest innovations to bring distinct character to each of our projects. There is always more to discover at michael-abraham.com

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“The hard soil and four months of snow make the inhabitants of the northern temperate zone wiser and abler than his fellow who enjoys the fixed smile of the tropics.” Ralph Waldo Emerson