Blog : South Shore Club

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.

Geneva Lakefront Market Update

Geneva Lakefront Market Update

This market has a way about it.  Sometimes the market feels slow to me. It feels sluggish, lifeless. It feels as though the last seller has sold and the last buyer has bought, and the rest of the days we’ll just while away, wishing for the way it was. It feels as though we’ve done everything that we were going to do. We’ve sold the last big house. Sold the last lot. Sold the last cheap house. It feels as thought we’ve run out of tricks. And then a new week begins and the market proves why it is the single most robust vacation home market in the entire Midwest.

This week was one of those weeks. New contracts flying. New listings selling. A fresh contract on my lakefront home in the South Shore Club ($4.595MM). A fresh contract on a baseball player’s house ($4.995) in Fontana. A new contract on an entry level house ($1.195MM).  I wrote on that house earlier this week on behalf of a buyer, only to be told the house had just the day before gone under contract. A listing on 68′ in Lake Geneva for $1.799MM, under contract within 24 hours of hitting the open market. A contract on a spec home in Cedar Point ($3.85MM). Two more contracts are still pending,  those on my listing on Jerseyhurst ($2.895MM), and a lakefront in Knollwood ($3.325MM). The market, just when it seemed as though the summer lull was taking hold, has surged.

Of the 28 lakefront homes available today, 7 are pending sale, leaving just 21 available homes.  Lest you think all of the good homes are sold, consider that there’s still a lakefront home available on Geneva Lake priced under $1MM.  We’re going to run out of those homes someday, so if you have vision, it’s time to snap up this remaining bit of aged, cheap inventory. My listing in the Elgin Club ($1.975MM) has no reason to be available today. It should be sold. Perhaps I’m not very good at this game, because I’m failing on that house. It’s a large house on 50′ of level frontage with private pier and fantastic features, and it’s available today.  You should come see it this weekend. My listing in Fontana for $3.2MM is turn key perfection. My Loramoor lakefront for $5.995MM couldn’t be replicated for the price it’ll sell for. The market might be active, but there is value still to be discovered.

Aged inventory has a way of weighing heavily here, and today there is still plenty of it. There are properties entering their second autumn on market, and those homes, in spite of the market conditions, appear ripe to sell right. Let’s go look at those together. Let’s revisit the things the market has passed up time and time again. And let’s be first in line for the new offerings that are bound to make their way to market this fall. Remember, September is only fall in our minds, it’s still summer on our skin.  For now, let’s rejoice in the summer that we’ve had. Let’s be proud of this market, and of the recent spate of sales that will let 2017 be our sixth fantastic year in a row. And let’s realize that in spite of all this activity, there are still deals to be had. Here’s to this place. Here’s to us. Here’s to the last Labor Day weekend you’re ever going to have to spend in the city.

New Lakefront Listing

New Lakefront Listing

The South Shore Club is all quite nice. The pool and the entrance, the tennis courts and the piers. There’s nothing like it here, and likely never will be anything like it again. Within the South Shore Club there are nice homes, some better than others. Some new, others older, some by the pool and some near the tennis. But beyond the typical homes in the SSC there are the elite. There are the select homes that do not merely angle over lawn and towards the water, but those that sit right up on the water. The front row. There are four of these built homes that match this description, the last having sold in 2014.

But of those front homes, only two were built in a sunny lake home style. Two have white trim, light cabinets and brighter exposures that feel more like a typical lakefront home on Geneva.  Today one of those rare lakefront homes is available, light and bright and ready for a new vacation home owner.  N1619 East Lakeside Lane features eight bedrooms and four full floors of finished living space. The lower level is a walkout to the lakefront, with a large family room anchored by a full masonry fireplace.  You’ll also find a bunk room with three adjacent baths. If you have a large social circle and feel the need to entertain, this house was built with you in mind.

The current owner (who is the original owner)  has a very large family, and when working with Orren Pickell and the architects to design this lakefront, he made certain that his entire family would have space of their own. That’s why the elevated bedroom and bath count. That’s why the fourth floor finishes into an office/den with an additional bedroom and bath. That’s why the lakefront deck is oversized and wide. That’s why the garage is deeper, with 8′ garage doors so your SUV can actually fit (a rarity given some of the tiny garage doors that plague certain SSC homes). That’s why there’s an elevator and a main floor bedroom suite.

Beyond the sheer size, there are finishes here that are both expected and unique to this home. Waterworks faucets and marble floors. Wood-Mode cabinetry and Wolf ovens. Sub-Zero refrigerators, both in the kitchen and the butler’s pantry. A solarium, constructed on the south side of the home in a classic English style, would make a terrific office or reading room.  There’s nothing lacking here. No space concerns, no quality issues, and obviously no location issues. This is the front house. The best house. The lot that faces the water fully, with a slight western tilt to take advantage of the sunsets.  The location on the water is tremendous, opening to the widest section of the south shore, offering dramatic viewing of the nearby Lake Geneva Yacht Club regattas.

Offered today for $4.595MM. It will be on the MLS later today and available for tour this Sunday. If you’d like a tour of this home and the remarkable South Shore Club property, I’m here to help.

 

Geneva Lakefront Market Update

Geneva Lakefront Market Update

I’ve been writing 2017 on my checks with solid consistency for the better part of a month now. There are no more sixes that have been scratched into sevens.  It’s 2017 and we know it, the shock of a new year has worn off.   Spring is racing towards us, or it’s here, or it’s not, no one is sure.  The year isn’t old enough to judge yet, but at seven weeks, the market is ready for a 2017 assessment.

The best way to judge an early year market is not by watching the closing data. Closings in January were sales from November or December. They are hold overs that pay testament to the prior year activity, and so they aren’t important. No matter, there haven’t been any 2017 lakefront closings to discuss. But there have been some new listings to review, and in those new listings there’s a bit of a story. The market can be measured by sales, measured by inventory, but also measured by the market reaction to new inventory. Let’s discuss that.

Last week a new lakefront in Cedar Point came to market in the $1.5MM range. A few days later, that lakefront property had sold. A magnificent sales job by the participating agents? A super rare piece of inventory that throngs of buyers had been anxiously awaiting? Not really, just an entry level lakefront that came to market cheap, and sold quickly.  Every property has a price at which it will sell immediately, so there’s no secret to that particular sauce.   But the sale proves the entry level market still has considerable legs even after the high volume year that was 2016. The quick listing and sale is a good sign for our market.

Two other lakefronts were brought to market this year, one being my listing in the South Shore Club that you’re looking at in the above photo. That’s a great house, but I haven’t sold it yet. It’s only been on market for three weeks, so by now it’s only fair to recognize that I didn’t price it as a fire sale. Another home in the South Shore Club that hasn’t sold for years came back to market as well, leaving two available homes in the club.  Remember, these aren’t association homes priced as lakefronts. They’re $5MM lakefronts priced as $3MM association homes.

Another lakefront in Fontana hit the market at just under $6MM. That’s a nice lakefront home to be sure, and it’s only been on market for the past two weeks or so.  Three new listings in total, one sold immediately, the other two for sale.  No carry over sales from 2016 yet, although there are a couple that will be closing over the coming weeks as there are currently five lakefront homes pending sale (including new contracts on the Solar Lane lakefront and the harbor front home in Country Club Estates).  So where does that leave us? Do we have the makings of a dynamic 2017 or are we seven weeks into a dud? The quick sale in Cedar Point tells us that buyers are ready and willing to pounce, but the two available at the higher ranges suggest buyers are still measured, still cautious, still paying attention. After all, this is the Midwest and we do measured very, very well.

The only thing we know so far is that the market is low on inventory, which is the same thing we knew at the end of December. Without new inventory, there’s no fuel for this fire.  The stock market stability is wonderful for our real estate market, and interest rates remain low, albeit it at higher lows than last year.  And there are buyers, plenty of buyers. All we need now is some more inventory, and I expect the market will find a way to provide that in the coming weeks. If you’re a buyer in search of something you haven’t yet found, let’s talk.

New South Shore Club Listing

New South Shore Club Listing

There was nothing like it in 2002 just as there is nothing like it in 2017. A lakefront community engineered to attract high end buyers, in a high end setting, on this, our high end lake. It was a fresh take on lakefront living, combining the traditional layout of the Congress Club, albeit on a much more impressive scale, with the sheer size and quality of a true lakefront estate. The South Shore Club might have been a bit before its time in 2002, but by 2013 its time had come. The market saw this development and recognized just how special it was. Buyers who might otherwise buy a $3MM piece of dirt on Geneva were instead inclined towards buying a $3MM house with all of these rich amenities and so much style. Today, a blast from this short-term past.

The Original Vacation House, or so it was then called, was built by Orren Pickell to encompass all of the best that the South Shore Club could muster. The lot was special, set into the woods on that East side, but still prominent and capable of delivering a unique lake view. The style was lighter, brighter, more intricate, more involved, and as time wore on there was one house that kept looking new and ideal. It was this house, the Vacation House, the house that had all of the toys and all of the upgrades. The house was sold originally as a spec home, and enjoyed from that day until this day by the current owner. Alas, the property has run its course and the family has decided the time to move on has arrived. Today, I offer you the Original Vacation House, as wonderful now as it ever was then.

But it’s better now than it was then. The market has enjoyed consistent sales over the last five years, and so the faith that the initial buyer displayed way back in 2002 is no longer required of a new buyer. It’s just a beautiful house and fits the market, and it fits the style and it’s ready to be sold. The home has been lovingly maintained, and as the construction on either side of it is complete, there will be no disruption to the new buyer’s summer caused by backhoes or nail guns. The finishes as what you’d expect, with Wood-Mode cabinetry, Sub-Zero and Wolf kitchen appliances, Rohl fixtures, Lutron whole-house control, and more. The South Shore Club is complete, it’s functioning as it was intended, and it offers a lakefront buyer a luxurious retreat at a fraction of what such a home would cost on private frontage.

That’s really what the South Shore Club is about, by the way. It’s not about an association home with association home amenities. These homes were built and the association was designed to stack up against private frontage competition. If you have $3.275MM to spend on a lake house, you cannot buy anything of any reasonable scale or quality possessing a good amount of private frontage for that number. To put it another way, this new listing in the low $3s, if given a 1.5 acre lot and 100′ worth of frontage, would easily sell in the $5.5-6MM range today. You’re not paying lakefront prices for a South Shore Club home, you’re paying a discount to that cost and you’re achieving a much easier vacation home experience.

What’s easier? Well, all of it. Boats are included, no need to buy, maintain, and depreciate your own. The pool is there, included, a lifeguard as well. The tennis is there, ready, green with clay and ready for you. The lawns are maintained, the snow is plowed, and in the winter, if we have a winter with some normalcy, there’s an ice rink, too. The South Shore Club doesn’t just give you a lakefront experience, it gives you that experience at a discount, and it allows you, the owner, a much more convenient and leisurely weekend experience.

For today, consider this new offering. It’s wonderful and it’s available and I’m ready to show it this weekend. If you or anyone you know might be interested, please do let me know. Sometimes I list homes that I know require a tremendous amount of creativity to sell. Other times, I list a home that I know will make my job considerably easier and just sell itself.

South Shore Club Sale

South Shore Club Sale

Last month I listed a home in the South Shore Club. This month, I sold that home in the South Shore Club.  This doesn’t seem like a big deal, but it kind of is. Imagine the South Shore Club of before, of pre-2012. It was a nice place, with boats and green lawns and that pool and a tennis court. It was a beautiful place back then, just as it is today. But back then the market was struggling with the concept, struggling with the idea that something off the lake with so many vacant lots could ever find its place in this lakefront scene. In spite of finished roads and amenities, in spite of fanciful built homes and happy owners, there was a dilemma: Would this place ever hold its own?

The answer, admittedly, was not then known. It couldn’t be known. There were too many vacant lots, too few sales, too much uncertainty. Would the developer go bankrupt? Of course not, but the question was still asked.  In 2012, these question that was the South Shore Club started to find answers. The lots were selling, the houses, too. Inventory was shrinking,  distressed owners were leaving. When I took over the marketing of the SSC it was an uncertain place, but by the end of 2015, when the last bit of old inventory was cleared and the last lot sold, it was obvious that the South Shore Club was on solid ground. Market acceptance is a wonderful thing.

This summer, the first real test. New inventory, new pricing, new product. Would the SSC absorb this quickly, or would the development stall at its first opportunity to show that it has indeed turned the corner? When I listed this home on Lakeside Lane in July, no one was more interested in the answer than I was. Yesterday, that home closed for $2.75MM, and that answered the question. The South Shore Club makes sense, the market understands it, and the woes of prior years are squarely in our rear view mirror. For the South Shore Club, no two sales have ever mattered more than the first sale of 2012 for $3.575MM and the first sale of 2016 for $2.75MM. The 2012 sale kickstarted a nervous market, and the 2016 sale proved that the SSC can compete with lakefront homes for the attention of new buyers.

I was pleased to have represented this seller, and am grateful for the opportunity to continue the momentum that the South Shore Club has worked so hard to gain. I’m always happy for these sales, but some do mean more than others. This sale doesn’t mean more to me than the sales that have come before and the sales that will follow, but to the South Shore Club this sale means the world. If you’re interested in being part of the South Shore Club scene, my vacant lot offering on Forest Hill listed at $598k is your best bet.

Lake Geneva Lakefront Update

Lake Geneva Lakefront Update

August.  It’s August now and it’s too late for you. If you’re at home and your vacation home dreams are there with you, then you’ve already blown it. This August will not be special for you. It might be special for you if you enter into a contract to buy a vacation home during this month, but otherwise it’ll be uneventful and horrible. You went to Lollapalooza over the weekend? Terrific, that also sounds boring. The good news is that while this August is a complete and utter waste, next August can be spectacular. And next July, too. June, sure. May, and its Memorial Day, delightful. And so it goes, a summer still underway but an August already wasted. That’s your upbeat Monday morning message. Enjoy your week!

The market is remarkably active today. The lakefront in particular. A few weeks ago I sold my large lakefront listing on the North Shore near Pebble Point. A buyer paid $3.93MM for 181′ of dead level frontage and four acres of fabulous depth. This lot is likely the best vacant lot to sell on this lake in quite some time. I prefer it over the lot that sold near Alta Vista a few years back for $6MM. That lot is sold, and with it I’m back to where I belong in the MLS rankings for Walworth County- Number One.  Another large lakefront on Basswood is under contract with an asking price just under $4MM. That home had been for sale for quite a while, and finally found a spurt of activity this summer before finalizing a contract last month.  Two hundred feet of frontage with an old house will always find a buyer, assuming the price slowly succumbs to the market’s expectations.

The South Shore Club has had a nice injection of activity, as I listed and then almost immediately went under contract on a large home just to the lakeside and west of the pool. At $2.99MM this was the first home in this sort of location to come to market since I sold a foreclosure two years ago on the east side of the pool. The home sold quickly because it’s a large home, with elevated finishes, and a most beautiful lake view. The other listing in the South Shore Club is farther towards the back, with less of a view, but I expect that home to benefit from my soon-to-print-comp, and that home will sell this year as well. If you’re looking at the SSC and don’t want to swing the $2.7MM+ price to be on the circle, I have my lot on Forest Hill Court available for just $598k, including home plans.

Just last week a home on the Abbey Harbor came to market, and then this last weekend that home went under contract. Do buyers love harbor front? Of course not, but buyers do love new and fancy and if you’re a buyer who loves large boats and new and fancy well then you’ve met your ideal situation. At $2.8MM the seller was rewarded in large part because of the lack of quality lakefront inventory in that price range.  The SSC home is a similar beneficiary. If the lakefront had more inventory in the $2-5MM segment, buyers would absorb much of it with little delay. If you’re a seller sitting on a home in that segment and you’ve thought of selling, now is the time to call me. Actually, email me, since my return phone call habits are terrible at best.

Entry level lakefronts continue to be shown regularly, but are failing to attract contracts. I just reduced my lakefront on Lakeview to $1.419MM, and that’s likely the best entry level property on the market.  With just 27 lakefront homes available, and two more vacation lots (my Loramoor lakefront being the best option there), buyers have few options to choose from. The good news for buyers is that aged inventory is already starting the reduction process. Sellers know that while this market is a 365 day market now, buyer traffic will slow by November, meaning there’s just 90 days of solid market time left for 2016. Smart sellers are evaluating their position in the market and reducing. It’s not a desperate move by any means, it’s just smart business. Watch for the savvy sellers who have experienced significant market time to reduce soon. Of course the smart buyers are the ones working with me to both strangle deals out of this aged inventory and pounce on the new inventory.

 

Above, the boathouse at my W4160 Lakeview listing. Yours for $1.419MM.

 

New South Shore Club Listing

New South Shore Club Listing

Within the South Shore Club, there are several market segments. First, the homes up front. The homes on the water. Those are the kings of the SSC. There are four homes that play that way, and those homes have demonstrated that they sell at premium prices. Then, the second tier homes, those from the lake to the pool, but not behind the pool. Too close to the pool isn’t ideal, so you’d like to be close but not too close. The difference is subtle. Then, behind the pool. There are normal lots, and one special lot, but mostly the behind the pool properties fall into their own segment. Then, finally, the homes on Forest Hill Circle. Those homes lack lake views of any real variety, and so they generally sell in the $1.5-1.9MM range. I have the only vacant lot available in the SSC listed there, and I just dropped the price to $598k. If you’re interested in building in the SSC, that’s your chance. G6

But if you don’t want to build and you don’t want to have a limited lake view, and you don’t want to be right on top of the pool, you’re in luck. N1592 Lakeside Lane is on the market as of yesterday, and my newest vacation home listing offers a multitude of benefits for the $2.99MM asking price. First off, you’re in front of the pool so the view is rather divine. Secondly, you’re close to the pool, but you’re not too close. This matters. Thirdly, the house is pretty huge at 7700+ square feet. It’s wide and it’s deep and there are all of the rooms you’re expecting and then a few extras. It’s long been known that the South Shore Club offers superlative finishes, but there are several homes that do not stack up to the original, more ornate, more luxurious builds. This home is as ornate as it should be, as luxurious as you want it to be, and positioned in exactly the right spot to find some favor with the market.

If you’re unaware of the South Shore Club’s rich list of amenities, a recap for you. Boats, they’re included. There are lots of them and they’re nice and when you’re an owner here you just reserve one for the day and time you’d like it, and then you go for a boat ride. There are dock hands (the only context that calling a pier a dock is acceptable, by the way), so if you’re a novice boater you have plenty of help with the process. There is a swim pier, a dedicated, quiet pier, far away from the boats, so if you want to indulge Geneva Lake in the way that it prefers, you can jump right in and swim. If you’re less inclined and need the chlorinated comfort of a pool, the South Shore Club has you covered. There’s also a fire pit with grill area for parties, a tennis court and playground, and in the winter if the weather is right you can ice skate on their association rink.  Also included in the dues is your lawn and driveway maintenance, making ownership here an absolute breeze.

G5

The market has, over the past 24 months, eliminated any doubt about the future of the club, leaving behind a normalized market that lines up nicely with lakefront inventory. In the SSC you can buy a home for $2.99MM that would cost $4MM or more if set on even a 100′ lakefront lot. If you’re in search of a lakefront home and you’re disenchanted with the inventory in the $2-5MM price range, consider this new listing. High attention to detail, enough space for everyone, and a view that rivals that of most private lakefront homes. Pack this into the amenity blessed environment of the South Shore Club and you’re set.

South Shore Club Lot

South Shore Club Lot

Increasingly, buyers build what they want, where they want, oblivious, either ignorantly or happily so, to the fact that their build is pricing them right out of the market they’ve chosen. This happens on the lake quite often, but it doesn’t matter. If you’re a lakefront buyer and you wish to build a $12MM home that you might someday wish to sell, it might not matter that you’ll only get $8MM for your home.  There was a recent article in the Wall Street Journal on this topic, and to spare you the click, it basically explained that if the super rich want a $2MM workout room, or a $1MM master bath, then that’s what the super rich get. In the same way, wealthy folks might buy a yacht for $20MM that they’ll someday trade in for $7MM, assuming they’ve kept good care of it.  This is why the super rich can do what they please; because it just doesn’t matter.

But when you tear down a home in Cedar Point that you paid $300k for, this should be something we first think about. If $300k is the land basis, that’s fine, assuming you’re on the parkway or somewhere otherwise special. If you’re in the back of Cedar Point, that’s nice, but that’s not a location that I’d like to cement $300k in land cost.  Then, with $300k locked, you build the home for another $400k. It’s a nice enough home, after all, and those marble counters aren’t free.  When the house is done your neighbors gather and everyone gushes. They might not have done that black tin ceiling in the kitchen with those red accent walls, but still, they applaud your remarkable, or at least memorable, sense of style. You’re proud, but you’re also $700k into your home, so when you come to me to sell it I’ll get to deliver the news: No one feels like paying over $500k for a far off water home in Cedar Point.

This is why we have to be smart, and we have to be aware of our surroundings. The South Shore Club might have a higher price point than most associations around the lake, but the theory remains. Take into consideration your surroundings and build accordingly.  When I was selling the vacant lots in here like so many free hotcakes, some existing owners were none too pleased. Why would I undercut the market like that? How dare I! But what they didn’t realize was that the market dictated those vacant lot prices based on the ability to resell the built inventory.  When I sold a built home near the pool for $1.8MM, how could the lot next door be worth much more than $500k? If the home cost $1.2-1.6MM to build, the vacant lot couldn’t really be worth $1MM anymore. The market set the prices and we responded accordingly. The result was a market that has since benefited tremendously from market based pricing.

Today, I have another vacant lot in the South Shore Club coming to market. It’ll be available next week, but because you’re smart and aware, you know about it today. The lot will be priced at $649k, and it’ll be the only lot available in the South Shore Club. Because it’s the only lot available, some owners would like to think the lot could be worth $1MM. It’s the only one available! If you want to play ball in this stadium, this is the price you’ll pay! If you can’t afford it, look somewhere else! These are the utterings of sellers who don’t understand markets. These are the words of sellers who would rather price something at an unattainable level because they have failed to separate their intense love of their own property with the actual conditions affecting their property.  I don’t like sellers like that, but I like sellers like this one in the South Shore Club, because our pricing, even when offering something that is otherwise unattainable, makes complete market sense.

So there you have it, the South Shore Club, back in play. If you thought you missed it, you didn’t. Get in now. You could buy some existing house in the South Shore Club, sure, in some boring location with some odd features and strange this mingled with absurd that, or you could buy this lot and make your own retreat.  If you love huge master suites, go for it. If you need a dedicated ping pong room, who am I to argue? If your wife needs a quilting room because she quilts, so does mine! Once, for a few minutes.  Whatever your aim, bring it here. To the South Shore Club, where I’m offering you a mulligan.

South Shore Club at Lake Geneva

South Shore Club at Lake Geneva

The South Shore Club at Lake Geneva is old now. It’s been here for a long time, or for a lifetime, assuming the life is young and the long time isn’t viewed in any historical context. It’s not new, but it’s not old like the Chicago Club, or the Harvard Club, or the Lake Geneva Club.  But there’s nothing misunderstood about it now, nothing curious, nothing that needs so much explaining. The market was created, the market stumbled, the market found its footing and now the market is doing what’s best for the Club. It’s resting.

Last year, the last two pieces of aged inventory sold. That was my listing on Forest Hill Court, and the vacant lot immediately to the West of it. Those two properties, one build and one vacant, had been for sale for years. Literally, years and years. Then last fall they sold. Both at discounts, both at prices that represented significant losses for the sellers. But they both finally sold and with those sales, the South Shore Club removed the last piece of stubborn resistance.

Over the winter, nothing has happened in the South Shore Club, and that’s exactly what needed to happen. Then, a couple of weeks ago, an old bit of inventory made new again. A home that was built on spec near the tennis court on Forest Hill came back to market. That home had sold for $1.6s but was then improved, so the $1.9MM ask wasn’t out of line with market expectations. That home sold quickly and somewhat easily. Today, if you were only watching casually over the winter, you’d be forgiven if you didn’t know about that sale (it hasn’t closed yet).

The market is quiet now, but it’s only quiet if you’re not on the inside. On the inside, there is at least one home privately offered for sale, though it isn’t listed. Inside, there aren’t any lots on the open market but there are two that might be sold if the price is right.  Outside, it looks as though the SSC has finally found its balance, and so long as the market there continues to release bits of inventory slowly, one at a time, the market will continue to improve. That’s what it looks like on the inside, too.

If we rewind to the spring of 2012, the South Shore Club at Lake Geneva was a total market disaster. It hadn’t printed a sale in forever, and vacant lots hung heavy on the MLS at lofty prices. When I took over the marketing of the club that year, the sale for $3.575MM on Lakeside changed everything. That sale showed the buying public that there was liquidity in the SSC, and that if you watched a property for too long it was likely to sell to someone more motivated than you. That sale begat another, and before 2012 had turned to 2013 we had a handful of sales, both lots and homes, and the market was on its way to correcting itself. But the full correction hasn’t been apparent until now.

That’s why that little off-market sale for $1.9MM matters so much. It means a buyer who just joined the club found immediate and easy liquidity to leave the club. It means the market is functioning as it should, and it means that sellers of SSC homes are no longer signing up for a lifetime of open houses and fruitless showings. It means the market is strong and the recover is complete.  If you’re a seller, you have an opportunity now. If you’re a buyer, work with me and I’ll get you into the South Shore Club even though there appears to be nothing available.

South Shore Club Market Update

South Shore Club Market Update

As I grow more distanced from my youth, I remember things as though they happened on a movie screen. I remember being dropped off at the limestone steps of Northwestern Military Academy, the scene looking like a Wes Anderson score painted gray and brown. I remember walking up to the oversized door, but not before I took a deep breath to ready myself, to steady myself. It was just me and a friend or two from school, and since our small private school offered no course in Driver’s Ed, we had to take it somewhere. That somewhere was Northwestern. I remember the rotunda, smaller inside than it appeared it should be when viewed from the outside. The second floor balcony circled the space.  The three of us from the other school walked down the hallway, and I distinctly remember catcalls and whistles, directed, presumably, at the girls from my school. We found the room, escaping the watchful stare of the second floor balcony gawkers. We exhaled. We did this for however many weeks it takes to complete Driver’s Ed. It was a strange experience, and in my recall I can watch that scene unfold and it hardly seems as though I was the leading character.

This was my first experience on the grounds of what would become the South Shore Club. I played basketball in the gym there, against those cadets who, in the later years of the academy, hailed mostly from Mexico City. That year would have been 1994, and my presence there was more than the venerable academy could take. The school closed those oversized doors a year later, transplanting the cadets to a new campus near Milwaukee. The property sat abandoned for a few years, until the South Shore Club developers took control in the late 1990s and transformed the grounds into what it is today.  I lament not spending more time near that property during those late 90s years when it was unoccupied

But that was then and this is now, and the story that played out on those grounds between 2002 and 2015 has been well documented, especially here on this site. The short story, for those who have shamefully been absent from the discussion, is one of a new development. It’s one of a fast start, a soft middle, and a restructured price range that finally hastened the completion. The club is now complete, it’s done. There’s nothing more to see there, nothing left to do. Maintenance projects now take the place of construction projects, and nary one or two new builds are expected to take place there in 2016. The years of action in the club were 2012, 2013, and 2014. Not coincidentally, those were the years where I was at the helm of that previously wayward ship. Prices were adjusted, a new pitch was adapted, and those three years were significant. Aged inventory was cleared form the market, distressed inventory was sold off and replaced with strong ownership, vacant parcels were sold so they could no longer drag on the values of the built homes. The hard work was done, and when 2015 started there was very little left to do.

Very little, but still something. There was a home on Forest Hill that hadn’t yet sold, even though it languished on the open market for years. It was my listing. The price structure was never right, first in the threes, then every part of the twos, then the upper ones, before settling and closing in September at $1.45MM. Next door, the only other pieced of aged inventory, this of a vacant parcel that sold originally in the $800k range, back in the early 2000s when that seemed like a good idea. I brought a buyer to that last lot, and it sold for $420k.  2015 was a year of market inaction at the South Shore Club, but the only goal it wrote down at the beginning of the year was complete by October: Sell anything that remained.

The sales closed, the building rush of 2014 now just about over, the market looks to 2016. What will it hold? Will the South Shore Club rest now, finding the pause that it’s so badly needed for the last 14 years?  That would be the best possible scenario for the Club. Rest. Enter 2016 without available inventory, and spend all of 2016 without inventory.  Appreciation is driven by demand, and demand is fanned by absence of supply. If the SSC can withstand the urge to introduce properties to the market, it will cement itself as a desirable, and rare, commodity. If, however, it enters 2016 and some owners who got in right look to capitalize on their prior, timely investment, then the SSC will see new inventory. This is not what I’d like to see happen, but this is what I expect will happen. The temptation of a strong market will be too great for some owners to ignore, and built inventory will return to the market in 2016.

Will the prices be so much higher than they were? Will this brief absence of inventory mean prices have risen dramatically? No, of course not. It means the price structure that I suggested in 2012 is still largely in place, though adjusted upwards because the uncertainty of where that market goes has been removed. Expect homes on the lakefront to be sold in the high threes or perhaps low fours. Expect inventory from the lake back to the pool to achieve $2.5-3.5MM, the high end of that range only possible for exceptional homes. Beyond the pool, $2.2MM to $3.5MM is expected, the wide range reflecting a wide variety in the quality of the built homes there. Lastly, expect the Forest Hill properties to be anchored in the $1.6MM to $2MM range, which is where they always belonged. 2016 should be a terrific year for values in the South Shore Club, but the association would be better off ignoring the temptation of inventory. It’s time for the South Shore Club to rest.

South Shore Club Sales

I watch the million dollar shows on television. I used to think I liked those shows, because they portrayed Realtors as being cool and hip, and Realtors have, since the advent of the Realtor, been sufficiently anything but cool or hip. I liked the new Realtor, and I liked that the industry found a way to reshape their image. I don’t really feel that way anymore.

I like the fancy cars and pointy shoes as much as the next guy, and I appreciate snarky comments and faux conflicts, but there’s some damage being done to the industry if you look beyond the pocket squares and excessively gelled hair. While we’ve become accustomed to watching these television agents dance through negotiations and coyly bluff each other over drinks at a fancy bar (the deals always come together), the bragging about setting new records and beating the market has convinced much of middle America that this new game isn’t about facilitating market transactions efficiently and competently, but rather it’s about the gimmickry that can, or in the case of the show, always, leads to beating the market.

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My market beating experience this year just played out last week at the South Shore Club. I saw there the last two sellers, those owners of lot 8 (unbuilt), and lot 7 (built). When I took over the South Shore Club marketing in 2012, these two parcels were for sale. When 2014 faded to 2015, both of these parcels were still for sale. Both properties held the lofty expectations of their owners, and if both parcels had been in Beverly Hills I likely would have sold them both to foreign investors and then tap-danced my way to a champagne lunch. But this is Lake Geneva, which is, if you’ve been dawdling, a small resort town in Wisconsin that caters almost exclusively to the Chicago affluent. It is a beautiful area, but it is to Beverly Hills what I am to an olympic decathlete.

These two properties weren’t catastrophically flawed. They were South Shore Club properties, owning all of the luxurious amenities that every other club property owns. They were on a dead end cul-de-sac, on a street that hosts a total of 8 parcels. In the time since these two properties were listed, nearly every other property on the street sold, and every buyer that bought on the street looked at these two parcels and said no thanks.

It wasn’t that these owners weren’t trying to sell. The vacant lot #8 switched representation a handful of times in an attempt to rouse a buyer through a different narrative, a different set of pictures, a different approach. That failed. The lot 7 owner, whom I was pleased to represent, chopped the price consistently. He re-painted. He removed the furniture. He had a pre-inspection performed (some agents love those now). He took the property off the market and then put it back on. He chopped the price some more. New pictures were taken. A new narrative written. After several years of efforting the properties had several serious looks, several seriously interested, and dozens upon dozens of showings, yet both sat unsold.

When both parcels sold last week, they sold for the reason that Lake Geneva properties ultimately sell. They sold because the prices were cut to a level that the market accepted. They didn’t sell because of pointy shoes or gelled hair. They didn’t sell because the Realtors drove shiny cars. They sold because the market had rendered judgement on them, and in order to find a buyer they both had to sell cheap. I sold lot 8 last week to a buyer of mine for $420k. I sold lot 7 for $1.45MM. These prices were discounted, tremendously, even as the remainder of the market appreciated. Importantly, these two parcels represented the last two available pieces of aged inventory in the South Shore Club. From here on out, any sale in the SSC will be something new to market, and that’s exciting for everyone that has played a role in this development over the past 14 years.

Did these parcels fail to sell years ago because the Realtors were somehow bad? Is it because the Realtors couldn’t manipulate the market to suit the individual needs of their clients? Well, no. Of course not. The properties didn’t sell because beating the market isn’t just something that supposes one side is extremely naive and gullible, it’s also very difficult to do, unless of course we were in Beverly Hills right now.