I was showing a property in Fontana to a client on Sunday, when the conversation turned to the South Shore Club. As I sit this morning, searching the vast expanses of my brain for a subject matter, the only thing on my mind, besides the fog outside and a hope that I don’t have to use the Z key, because the Z is now missing from the keyboard of my aging laptop, is the South Shore Club. I’ve chronicled here how I didn’t care much for the South Shore Club when it was first developed. I never saw a reason to share a pool and a pier and a tennis court and a putting green and a fleet of boats, but that might have been simply discernment on my behalf given the price structure and how the SSC originally fit into our broader market. At the time the South Shore Club was developed, $4MM would buy someone their own pier and pool and tennis court and boat, and I couldn’t quite figure out why someone would prefer to share all those amenities with others when they could own them outright.
That was then, this is now. The market has changed significantly over the past seven years, and not in the way you’re thinking. The estate level of the lakefront has escalated in price from where $4MM would have bought an “estate” in 2003, to a price structure that now largely demands prices in the $5MM+ range if a buyer is seeking a true lakefront estate. At the same time, pricing in the South Shore Club has fallen from original values in the $3.75MM to $4.5MM range, to a much more reasonable $2.5MM to $3.9MM. I’m taking some liberties with that pricing, as current active inventory runs from around $2.5MM for a home on Forest Hill (not on the horseshoe that makes up the lake view homes), to mid and upper $4MM’s for some of the better located homes. I still think values have a ways to go in the SSC before the market there will rebound, and it wouldn’t surprise me to see 2010 finish with extremely anemic sales totals in this prized association.
Much of the problem lies with the cost of new land in the club. There are nine vacant parcels currently on the market, all but one look to be owned by the developing partners. An example of the strange price structure exists on Forest Hill Circle, the southern-most road in the development that ends up by the tennis court and playground. This road has a handful of parcels, including a couple of homes that are already built. One home on the road is on the market in the mid $2.5MM’s, making it the cheapest home for sale in the SSC. This home, by the way, is quite beautiful. But I’m not interested in the home today, I’m interested in the vacant land.
There are at least two lots for sale on Forest Hill Circle, one priced around a million bucks, the other, less than $600k. Two lots, in the same association, with access to the same armada of boats, membership at the same sparkling swimming pool, admission to the same clubhouse, on the same street. A price difference of around 40%, for what reason? I see. So you don’t know either.
The reality of the South Shore Club as I see it is this. What was once a club with a perceived price of admission of at least $3MM, has now seen that figure cut by as much as 50%. I’m here to tell you that you very well may be able to be all in to the South Shore Club, the most impressive association on the most impressive lake in the Midwest, for a total price of around $1.5MM (+/-). How so? Consider purchasing the vacant parcel in the upper $500k’s. Build a 4000 square foot house, modest by lakefront standards but still more than ideal, for a cost of around $1MM. Total package price for your brand new, overtly magnificent South Shore Club manse? Possibly around $1.5MM. Not including the cost of your golf cart, which you’re going to load the kids or your friends into for the short motorized jaunt to the lakefront or the pool. You came to me looking for value, and here it is.
Of course, I’m not a builder, nor do I own any of the lots in the SSC, nor do I work for the SSC, so this is simple a theory with some hypothetical numbers, so don’t call me asking about the $1.5MM package. I can however negotiate a vacant land deal for you, hook you up with a builder, and pat you on the back when you’re spending your weekends lakeside at the South Shore Club, content to swim and boat your way through your summer in the most discerning of atmospheres. If the SSC has always seemed unapproachable to you, as it has to many, it’s time to pull back the curtain and look at the association for what it really is. What is it that it really is? It’s a dynamite association with unheard of amenities, on the best lake in the entire Midwest, and the price of poker, 2010 style, just might be to your liking. Long term, the development will be a stalwart on the lakefront, in the mean time, the growing pains might be presenting you with an unbelievable opportunity.
(Remember, I’m not a builder, and I’m not associated with the SSC other than through my ability to sell the properties there. I do not represent the developing group, nor do I currently represent any of the active inventory in the club. These opinions on pricing are simply my opinions based on the way I see the market, and are given with implied pre-agency. Happy now? )