Blog : Just Sold

Loramoor Sells

Loramoor Sells

Most of the players in this game are endless and unflappable cheerleaders.  I did this! They say. I’m amazing! Others chime. Such is the business of self promotion. Without this promotion, no one would know anything about any of these players.  Aside from a news article once in a while, no one will spend much time considering your success. In the real business world, this is fine. To quietly go about mining dollars is the preferred way, but alas, the rules of this game do not allow quiet success.

I engage in this self congratulation often. I write this blog to educate and entertain, but also to make sure the reader knows which player in this game is indeed the most meaningful.  Heck, I write a whole magazine dedicated to this market, and as a fortunate aside, this player. Some pose with their real estate signs as though they’re prom dates, others plaster their names on their cars, while others still want to watch you while you grocery shop. No matter the platform, we’re just playing by the rules.

But sometimes, there’s no praise to be given, no praise to be asked for. There’s just a sale and a seller and a buyer, and that’s that. This is what happened last week when I finally closed on my aged listing off of South Lakeshore Drive. I first listed this home two years ago, and throughout that time I asked for listing extensions and price reductions more than I’d like to admit. I worked to sell this house, and ultimately I did sell this house, but I did a miserable job at it.

The market is, by all accounts, back to the prior market peak. In many instances, prices have pushed above that peak. Now consider this house that I just sold. It previously sold during the prior market escalation for $1.5MM and change. I just closed on it last week for $925k. That’s a terrible thing, and while I feel relieved that the property is no longer on the market, I know I was rather unsuccessful in selling this home.

The issue with the home was a complicated one. It wasn’t one issue at all, really. It was the perfect storm of trouble. First, a high prior print to chase. Second, an initial and subsequent list price (with another broker, by the way) that was sky high. After that initial list, the market was lost and the owner spent the next several years chasing buyers in the only way that actually makes a material difference: price reductions.  By the time I took over the market had written the property off, and while I thought I might be able to put some shine on the listing I ultimately failed at doing so. The price of $925k was a reasonable market price, but in this case, the buyer won.

I closed on another property last week, also somewhat of an aged piece of inventory. This was my vacant land listing in Loramoor. The lot was quite lovely, just one home from the water with slight views and proper lake rights through the East Loramoor Association. That lot was on the market for a year or two before closing last week for $625k.  In this market, that sale makes perfect sense. It was a nice market rate, with seller and buyer both doing well for themselves. Why would a buyer buy a home in a cottage neighborhood only to significantly renovate or rebuild it, when they could buy this lot in a high end neighborhood and be surrounded by high priced homes? Expect a new home to be built there soon, one that will likely make proper market sense.

These sales prove one important thing about the state of our market. As the lakefront inventory dries up (the lowest priced true lakefront home available today is my listing on Bluff for $2.145MM), buyers will look off water for reasonable values. If the cheapest lakefront is $2.1MM, it only makes sense that buyers in the low buck range will seek alternatives to sparse lakefront inventory. Expect this trend to continue for the foreseeable future, as off-water homes in the $900-$1.7MM range find favor with inventory hungry buyers.

South Shore Club Sells

South Shore Club Sells

In the South Shore Club, there are 40 total lots. Most are built on, a few are not. At present, there is one new construction underway.  To date, there had been one sale, that of an aged inventory home near the back of the lakeside circle. While there are 40 total, there are only four built homes that play as true lakefront homes. Those are the front homes, the homes you walk into and see the water, unavoidably.  Those are the homes that function as their own market, and the home I sold this week is part of that elite group.

There is some confusion over the South Shore Club, and how to come to a valuation. Will the market pay lakefront prices for these lakefront homes? The answer is yes, and no. The yes part is obvious, because there’s a sales pattern now that didn’t exist prior to 2012. The no part is less obvious, and it might not be a negative in the way you’re suspecting.  The market won’t pay true lakefront prices for these homes because the prices paid for them represent a discount to what those homes would trade for if they were on their own private lakefront parcels. So the market respects the South Shore Club, but buyers still expect a slight reduction over private frontage valuations. This is all good news.

Consider one way to look at this closing at $4,175,000. The last front house sold in 2014 for $3,591,000.  For 2014, the average price paid per lakefront foot was $21,144.  2017 YTD through October 10th, 2017, the average price paid is $27,743. That represents a 31% increase in valuation. If we apply the same appreciation increase to the South Shore Club lakefront four, we’d see a valuation $4,704,210.  Is this the only way to compute value? Of course not. A lakefront in Fontana sold in the high fours this fall, and that home, with a very small lot, sold for $713 per square foot. The South Shore Club home was 8736 square feet, which comes to a $477 per square foot.

A sincere thank you to the buyer and seller who let me help with this transaction. It was not the easiest deal I’ve ever worked on, and that comment may win Understatement Of The Year. That’ll put a wrap on my 2017 sales production, unless someone needs to close on a new house by the end of the year. Put a big red bow on it, like a Lexus. The year ends for me with $44MM in sales, which makes me the #1 individual Walworth County agent for 2017, and in that top slot for the third year in the past four. Combined with the 2016 volume that’s $106MM in the past 24 months. And that isn’t so bad. The address being written wrong on the property below that just sold, now that’s bad.

Jerseyhurst Sells

Jerseyhurst Sells

There are nice locations on this lake. We know most of the nice ones. If we get to drive down Snake Road while en route to our lake house, this is a wonderful thing. If we turn off of South Lakeshore Drive onto Basswood, this also makes us happy. If we drive down Linn Pier and get to turn left onto Lackey Lane, we know we should celebrate that we were able to turn left instead of just right. There are roads that deserve our praise, and each person who has ever driven these curving lakeside roads knows it. 

But the roads we know are not the only roads. There is one road that most people don’t know. Tell them to find Jerseyhurst without the assistance of GPS. Tell your older friends to find it without a the help of a Rand McNally. It’s a road we know about, because we once heard someone at a nearby dinner table mention it. Or we know about it because a friend once went on a garden walk down that lane, though most invitees became lost along the way.

Once you do find Jerseyhurst, just to the West of the Elgin Club, it requires no creativity to understand why it’s so special. There are several homes here, but not so many really. Just a handful, each unique and each manicured and each representing the best that Lake Geneva has to offer. This is a unique lane, short and curved and limited, but why it’s special is apparent to anyone and everyone who has ever wandered down it.

This is why my Jerseyhurst listing sold, and sold so quickly. I was pleased to represent the seller and work directly with the buyer in this transaction, and the print price last Friday of $2,795,000 represents a fair ransom to find ownership on this most lovely lane. To the new owners, a big congratulations for becoming the new stewards of this wonderful lake house. To the sellers who spent many fine years here, a most sincere thanks for allowing me to handle this sale, and best wishes for whatever comes next.

As a self-indulgent aside, this sale has pushed my 2017 sales volume to $34MM and change, which leaves me alone at top of the Walworth County leaderboard. So that’s neat.