Here's something you don't see everyday in Lake Geneva.  This home is located in Fontana overlooking the Abbey Harbor and was in the process of being torn down when I drove by it yesterday.  Because vacant real estate comes at such a premium in the Lake Geneva area, especially if it is on or near the lake with a view of the water, often homes with prime locations are torn down and rebuilt by the current owners or in some cases purchased for just the land and then rebuilt by the new owner.

As I’ve indicated the last few weeks, the signs of an increase in calls and inquires continues and I think we will see that resulting in more showings in the near future, but it hasn’t really happened as of yet.  Knowing that the average time between accepted offer and closing tends to run between 30 and 45 days, it is still too early to have any measureable signs of an increase in the actual closings YTD. 

I’m having lots of conversations with potential Buyers of various types of property and various price ranges in the Lake Geneva real estate market and there continues to be a concern by many about whether this is the right time to move forward with a purchase.  I even had a conversation with an appraiser yesterday who called me looking for some help with a refinance appraisal he was working on and he came right out and asked how we are able to come up with price recommendations these days with such mixed signals in the market and a lack of actual recent sales to go by.  It’s actually a good question. 

I had occasion to sit in on a speech this week given by an economist for Stewart Title whose credentials includes a PhD in finance with a minor in statistics and a master’s degree in land economics and real estate from Texas A&M University.  He had some very interesting things to say about the real estate market, not all of it positive and many comments about what’s going on in Washington these days with spending.  His outlook for the future of commercial real estate was extremely negative but he had a rather mixed message for residential real estate.  I don’t tend to put too much stock in prognosticators these days but his talk was filled with a lot of very specific charts and statistics.  His main point of focus was on the number of home sales as a leading indicator of the future and not on average sale prices, which is what much of the media tends to focus on.  His point being that with a high number short sales and bank owned property being sold, it is only natural that the averages will go down as those sale numbers are reported.  Getting that inventory sold and off the market is actually a good thing and it doesn’t necessarily mean that overall values are declining.  If you have any interest in viewing his Power Point presentation, drop me an Email message and I’ll be happy to pass it along.

We would “normally” expect the next month or so to be relatively quiet with many prospective Buyers attention being diverted because of the Holidays.

I hope you and your family have a wonderful Thanksgiving and for enjoying family and friends.

Usatoday.com Existing Home Sales October 2009

Realtytimes.com Real Estate Outlook          

A couple of interesting articles are linked below.  The first indicates that in a poll taken by Home.com, 5% of the respondents indicated they plan to make a real estate purchase this coming year, a possible indication that the perception is that prices have bottomed out and will be on the rise again in the future.

The second article discusses the extension of the $8,000 tax credit that was due to expire on November 30^th and details of the expansion of the program.

5% of Americans plan to buy a home next year

Tax Credit Program extended and Expanded

Existing-home sales – including single-family, townhomes, condominiums and co-ops – jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.09 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Existing-home sales in the Midwest jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price in the Midwest was $147,600, which is 1.0 percent below September 2008.

Contact Bob Webster of Keefe Real Estate with any questions or for further informtion on the lakefront market in the Greater Geneva Lakes Area including Lake Geneva, Delavan Lake, Lauderdale Lake, Whitewater Lake, Lake Beulah, Powers Lake and Twin Lakes.

This year has presented us with some of the most difficult times in terms of trying to accurately get a handle on what’s happening in the real estate market and what direction the various parts of the market are headed.  We’ve had some exceptionally nice weather since Labor Day, probably more nice days than we did in the “summer” and there seems to be somewhat of an effect on certain parts of the real estate market.  The $8,000 First Time Buyer Tax Credit being offered by Uncle Sam has had a positive effect on the lower end entry level priced homes in many parts of the country.  That program has an expiration date, similar to the way the Cash for Clunkers program worked, coming up at the end of November with some Buyers now scrambling to get to closing.  In some areas of the country it has definitely worked and been responsible for an increase in Buyer activity and the sales numbers being reported.  The second home market in Lake Geneva continues to be soft, despite many Sellers adjusting asking prices down to the point where there are some very attractive values available to Buyers willing to ignore all the doom and gloom talk and step up and take action now. 

It just seems that many folks are being extremely cautious right now about making financial decisions and many are just not comfortable taking on additional debt in what the media seems to enjoy referring to as these “troubled economic times”.  I really dislike that term, because I think if people hear it enough over and over, it can become a self-fulfilling prophecy.  Despite this, I remain hopeful that some of the signs of increased levels of activity we have begun to see recently will continue and that the market will respond in a positive way to what I believe is a great time to be in the market for the long term.

 
I’m not giving up on 2009 as the Fall season can be a beautiful time in Lake Geneva with lots of visitors to the area.  I’m determined to make the most of the next couple of months to see if we can get some additional business done and end the year on a more positive note.

We are mid way through the month of September, isn’t it great that summer has finally arrived?  We had an exceptional run of nice days last week and the weather over the weekend was as nice a weekend as I can remember in a long time.  I had occasion to attend our statewide Wisconsin Realtor Convention last week and had an opportunity to brainstorm with a number of agents from across the state on the current market conditions.  Many areas, especially the in larger markets, are definitely seeing signs of the market picking up and much of that credit is being given to the $8,000 tax credit being offered to first time Buyers.  That program is due to expire at the end of November and there is some talk of a possible extension or expansion of the program in the works.  That would be good news for those of us in markets with higher price ranges, especially if the program is expanded to go beyond just first time Buyers.  The second home market here is the southern part of the state as well as the northern part of the state remains sluggish with lots of questions in terms of what it will take to give the second home Buyers the confidence to decide to move forward and take some action now.  With much concern about job losses, healthcare debates, talk of higher taxes and the possibility of increasing deficits, it makes the job of selling people on the idea of considering a second home purchase at this time increasingly difficult.   I’ve had several discussions the last couple of weeks with potential Buyers who think that they can come in with extremely low, unrealistic offers and that Sellers should be willing to give them serious consideration.  There was an article in the Chicago Tribune recently that I have been able to use with many of these types of Buyers that basically says Sellers in several of the resort markets are not giving their properties away and that Buyers need to keep this in mind when it comes to second homes.  There was a local real estate agent interviewed who has done very little second home business around the lake but in spite of that, he made some good points and the author of the article did not seem to try to change the basic message he and the agents from the other markets seemed to be making.   I’ve included a link to that article below.  I remain hopeful that this will be the year that the post Labor Day selling season will outperform the traditional summer season and that we’ll end the year on a high note. 

Chicago Tribune Article

It is an ongoing, literally everyday struggle to work with Buyers today in this market who are anywhere from simply afraid or concerned about making a move to being downright negative and pessimistic about the real estate market, all as a result of everything they hear and read and have been told about these challenging times.  Our only response is to try to point out the favorable interest rates and some very attractive asking prices that have been adjusted by some Sellers in response to lengthy times on the market and the reduced number of sales taking place across the board. 

Some segments of the market have been extremely slow as far as activity and showings, in spite of our advertising and marketing efforts.  The only good thing is that both the showings and the lack of showings tend to run in spurts, so we often have the possibility of making up for lost ground in a short period of time.  We’ll continue to push forward and remain optimistic that the market will respond favorably to some of the recent news, and that we will be successful in finding a Buyer for your property in the very near future.  I’ve included links to some of the articles I mentioned for your review.

USATODAY Article on Pending Home Sales

USAToday Article on Manufacturing

CNNMoney Interview

USATODAY Article on Housing Rebound

USATODAY Article on Best July for the Dow in 20 years

This year continues to be a year of struggle for almost everything from finding Buyers who are willing to take action to challenges with lenders and the whole appraisal process, which has changed dramatically over the last few months.   I’ve attached the graph below that is supposed to represent the “normal” cycle in real estate.  I hope we are at the point of the cycle where we have passed the bottom and are on the move upward and that we’ll be able to look back a few months from now and say this was the turning point.   Here are a couple of interesting articles I ran across this week:

Unusual weather for summer of '09

The Buyer activity has shown some signs of picking up, but not to the same level and extent as with Sellers, at least so far.  The Buyer activity is also very spotty with no real trend that I have been able to discern between the various property types and or price ranges.  The same is true with the number of showings or lack of showings that I am seeing with some of my listings, some are being shown but many are not, in spite of our efforts. 

I have written a couple of offers this week, but getting Buyers to the point of making a decision to move forward is still a real struggle.  Having said all that, I am encouraged by some things that I’m observing in the market.  There were two Lake Geneva lakefront closings this week, and as I go through the Multiple Listing Service doing searches for various property, it’s nice to see the “accepted offer” tag showing up again here and there on some of the properties.  I believe it also sends a positive message to the buying public when we are able to send out a report that shows some of these properties as being under contract. 

With the disappointing weather we had last weekend, I was still very busy with showings on both days and, this has been an extremely busy week for me as well.  Hopefully that is a sign of good things to come.  I firmly believe that there are some very good values in the market today and with the recent slight increase in interest rates, that may help us to get the buying public to step up to the plate and take some action now.

There is much anticipation this time of the year that we will begin to see an increase in activity that will lead to more showings and eventually to sales.  At our weekly sales meeting on Tuesday morning there was mention of a number of accepted offers that had come together over the last week which is always an encouraging sign and can be an indication of good things to come, but is not something that gets reflected in the “closed” statistics that you read about.  Those “closed” numbers continue to be down from past years in many if not most markets and you will most likely hear or read about the average sales prices being down as well.  This is due to a large extent to bank owned foreclosure properties that are selling in many areas, and are often at substantially discounted prices, which in turn brings the “average” numbers down. 

I read an article about a report out this week that talked about a substantial increase in consumer confidence, and its effect on the stock market.  I think the same thing applies to real estate.  In many cases, it is all about perception and timing.  Our job is to help the buying public to understand what is really going on in the market and be able to explain why some of these numbers are down.  Pointing out the differences in our market and how we don’t have many of the negative factors here that are affecting some of the more troubled markets, is what we are up against on an almost daily basis.  Hopefully, the news about real estate will improve over the next few summer months.

We finally had a couple of beautiful days in a row last weekend in Lake Geneva.  Let’s hope there are more to come very soon.  I don’t mean to use the weather as an excuse for seeing fewer showings and less activity than normal, but there is just no substitute for warm spring like weather and sunny days to bring prospective Buyers out to look at real estate.  This applies to both the primary home market and especially to the second home market.  Last Friday we finally finished a week with positive gains in the stock market.  I think if it could be a trend that continues into the spring and summer it would go a long way towards giving the real estate buying public some long overdue assurance and confidence that this is a good time to be in the market.  Buying today at a time with favorable interest rates and some very good values available in the market would seem to be a prudent strategy.  You’d probably be surprised to know how many prospective Buyers many of us deal with on a daily basis who have some level of interest in making a real estate purchase, but are completely misinformed about what is really happening out there in the real world and the realities of where our market is.  Many have an extremely dim view of the present conditions as well as the future and it’s a constant struggle to try to give them examples and evidence that support taking a much more positive and optimistic view.  I continue to believe in that and will continue to work hard on your behalf.  On a lighter note, we’ve been trying a new marketing idea for the last few months with Comcast in Chicago that highlights some of our second home listings to the Chicago market.  If you are a Comcast Digital Subscriber, or know someone who is, you might find it interesting to check it out.  You need to dial in 888 on the TV remote, select Real Estate, Home Listings and begin a search.  There is a category for southern Wisconsin, which I believe we are the only local company participating.  We’d be interested in your thoughts or any feedback you’d like to offer.  

Contact Bob Webster at Keefe Real Estate or go to www.LakeGenevaProperty.com to search for lake front home, condominium or vacant land on any of the lakes in Walworth County and Western Kenosha County.