I’m not going to say what I want to say. I’m not going to say that a house with a modest 110′ worth of cliff frontage shouldn’t sell for five million dollars. I’m not going to talk about the work required to take a basic parcel and turn it into an estate-type parcel; the landscaping, the tennis court, maybe a pool. I’m not going to talk about fit and finish, about what constitutes high end construction and what does not. I’m not going to do any of those things, because a sale is a sale, and the market tells me what it expects and doesn’t really concern itself with what I expect.
The house sold last week for $5.1MM (I wasn’t involved in the sale). That blue house, the one high on the hill just north of Gordy’s. It sold. It was first listed in 2014 for $6.25MM. Was the home worth $6.25MM? No. And the market proved it, allowing the house to sit and stir on the market for the majority of that year and into this one. Throughout that time, buyers presumably came and went, opting for other things, or for nothing at all, over this house on the hill. But the house had some style, and it had some polish, and it was new and of a contractor pedigree that means something here, and so the house attracted interest but failed to achieve the only measure of interest that matters: A sale.
What happens next is some intrigue, some subterfuge, and disappointment. The listing expired and was removed from the market, but the market knew the home was still for sale. And so it went, a house off the market, an aged asking price that never fell below $6.25MM. If you were simply computer screen watching, as 90% of agents do, you might have been surprised to see this property print in the MLS this week with a $5.1MM closed price. We do not computer screen watch.
The sale now closed was handled by an agent other than the agent that brought the property to market at that lofty price in 2014. The agent who closed the transaction was not the agent who toiled at the high price. This was not the agent that knew the market would react differently to the property if it were listed in the middle to upper fives, rather than the low sixes. The agent who did the fine job of selling this home last week was not the agent who introduced the property to the market, who broadcast it to the agents, who made known the quality and the importance of the home (even if I didn’t agree with the level of importance). The property sold via another agent, and the market, those uninitiated who follow from afar by watching Instagram screens and Facebook posts, will assume that some heroic event was made possible by the introduction of a new face.
When I took over the South Shore Club marketing in 2012, and promptly began selling both homes and lots with a regularity that the market there had never experienced, was it because of me? Was I so much better than the prior representation that I somehow convinced the public that this South Shore Club was worth their time and money? Was I a star who brought with my power of personality and made this development matter again? Or was I just the guy who came on the scene, with messy hair and pointy shoes, and convinced the sellers that the price structure was wrong, and that if they would oblige my suggestion they would find success? It’s the latter, which is why I didn’t take out full page ads telling you how tremendously effective I was. I was merely the person at the helm when the market heated to such a level that success was the only possible outcome.
The same likely applies to the blue house on the hill in Fontana. Was this some feat? Was this a sale that wouldn’t have happened if not for a change in agent or broker? Of course not. This was a sale, like most sales, that had everything to do with price, and had the price of that $6.25MM home been dropped to $5.3MM (the ultimate list price when the property sold) I would suggest that anyone of a 100 different agents in this town could have played the star role. And all of that goes back to this. On television, red carpets and Burning Man parties sell houses. In Lake Geneva, just hack off your price a bit and make your agent a star.
As a market aside, this sale was high. There were multiple parties interested in it, but it was still high. The premium was paid because Fontana is a desirable locale, and new construction in the $5MM range generally doesn’t exist. Buyers can convince themselves to spend $5 something much easier than they can convince themselves to spend $7+. No matter that $7+ gets you a product like 1014 South Lakeshore, a property so vastly superior to the blue house on the hill in every possible measure. Compression is the high end buyer’s friend here, and if you can swing $5 something, better reach a bit and spend $7 something, because that two bucks you left in the market is now worth $1.6 bucks, and a house is so much more fun.