South Shore Club Market Update

The pool was rather perfect looking. Perhaps one or two groupings of a few individuals hung to its watery edges, but no one was swimming. The life guard was on the chair for a while, then she went around and rearranged one or two chairs. The monotony of the post dictated that she do this. There were a few people milling about near the lake, but a few of those few worked for the Club, so they were milling less and working more. Two women walked, between the lake and the pool, across the lawn at first, and then up the path. It was sunny and warm. The boats were there, most of them anyway. Perhaps two were gone. Were the people out to lunch on those boats? Were they driving them around the lake, showing friends this and that? Or were they just parked somewhere out of the way, drifting and thinking under that brightening midday sun. It was Saturday, August 9th, at around Noon. I was in the South Shore Club.

There was some fear last year that the SSC would not be as it was in prior years. I had placed many new owners in the Club over the past 12 months, and there was some concern that the sleepy nature of this lakeside enclave was soon to change. There was fear that the new crowd would be louder, more active. The old guard feared what changes would come with the new guard. In was apparent to me on that Saturday, as it has been on nearly every Saturday during 2014: The only thing that’s changed at the South Shore Club is the market, and the lake sets perspective of it. The pool is still mostly unused, the boats still mostly undriven. The swim pier mostly un-swum. If you’re a buyer, that’s a very, very good thing.

So what’s happened in the SSC over the past year? Well, lots of stuff. Last year, I sold lot 3 and then lot 18 and then lot 27. Then this year I sold lot 20 and lot 19 and then lot 31. I sold the home for $1.725MM on East Lakeside, and then someone else sold the home for $3.1MM on Lakeside. The home a few doors from the $3.1MM house is under contract shy of $3.8MM, and the rumor mill has it that a deal is about to happen on the spec home that was built on lot 3 ($1.749MM). Additionally, there’s a home for sale for $1.75MM on Forest Hill that’ll be sold soon. Lot 27 hit the market for $700k as a re-sale last week and has a buyer on it already. Remember the South Shore Club? Yeah, the new one is nothing like the old one. Except for the nobody home at the pool thing and the beautiful boats sitting unused bit.

I’d like to take some credit for the South Shore Club resurgence, and perhaps there is a tiny bit due. While the Club waffled around without buyers for a few years, it was obvious to me that there wasn’t any deep rooted issue with the SSC, not with the general concept or with the nearly flawless execution of that concept, rather there was simply growing pains that coincided with a miserable market downturn. Once the appropriate prices were set and the proper narrative was crafted, it was only a matter of time before the market saw the club as I do now- as a viable alternative to traditional lakefront ownership.

We’d be remiss if we didn’t add that somewhat uninspiring inventory in the $2.5MM to $3.5MM lakefront price range has helped push buyers to the club. If you’re a $3.5MM lakefront buyer, you’re probably not all that impressed with what we have available to you. There are unique homes, and there are unique parcels, but there is rarely a beautiful home on a beautiful parcel. The SSC takes the parcel out of the question, and instead allows buyers to focus on what most of them really, truly want: Some form of gilded luxury.

The SSC now has just two developer owned lots left. Those at lot 6 and lot 32. Priced at $595k and $649k respectively, they are fair lots and they will sell. If a buyer is contemplating one of those, he or she will be very pleased to know that I just put lot 20 back on the market as a resale. Priced to sell now at $585k, it’s a heck of a lot. Great views, great proximity to the pool without owning too much proximity, and a tidy little price that’s better than you could do through the developer. Why is that owner selling? Well, because he’s found something else within the SSC that he likes and he’s heading that direction. That’s another important data point- sellers in the SSC are no longer sellers who don’t want to stay in the SSC. Instead, now they’re behaving like many owners of traditional lake access association behave. They’re jockeying for better positioning but staying in the association that they’ve come to love (see Lake Geneva Club for a million different examples of that phenomenon).

Most of the disinterested or otherwise weak ownership is gone from the SSC now, and the fact that all of the vacant lots to have sold in the last 16 months have sold to cash buyers is something that the broad market should notice. This is a strong association, competing with the most impeccable lakefront homes. It’s the SSC, which is just like the old SSC except with a whole lot of momentum.