January. From this vantage point in February, I don’t see much of a different between what I see today and what I saw then, in January. The lake is still covered in ice and snow- more of it now than then. The temperatures are still arctic, the sun still shining in a mostly useless fashion. In spite of these similarities, February still has a chance to pan out the way I hope it will even though January didn’t cooperate with my greater plan at all. January had activity. Lots and lots of activity. It was a great month, to be sure, my best January ever in a career where I’ve had 18 of them. But January didn’t bring new inventory, and that was a big disappointment for me.
If you looked at the lakefront inventory today, you’d see that six new lakefront homes came to market in January, and one new lakefront lot. The lot was a new listing, and it sold within days of hitting the open market (Fontana, $2.995MM). The other six homes that all look new and shiny? Only one of those was actually a new listing, that of a magnificent lakefront home in the South Shore Club offered at $3.799MM. That home will sell quickly in this market, or at least within a couple months, but that’s because it’s really a new listing. The other five lakefront listings are all regurgitated from prior years, but there’s a silver lining in these that should not be overlooked.
I say the other five listings are all regurgitated, and that’s not being entirely fair to one of them. The listing on Oak Birch for $2.265MM is a new listing, but it’s a remodeled offering that was available last year, so I’m not counting as new because of my familiarity with it, and with its listing cycle. That “new” listing is new to the market at its new price that follows its new renovation, so I’ll leave that one out of the discussion for now. So, the other four. What of them? Are they worth our time and are they following pricing strategies that buyers can appreciate? Or are they sellers that see the market in its current hot state and figure their property is worth more in February than it was in December?
Thankfully, these are sellers that understand a rising tide does not treat all boats evenly. If a new listing is to come to market today, a property that hasn’t seen the light of the market for several years or several generations, that property will be able to command a premium. It is fresh meat being thrown to famished buyers, and they’ll respond to it accordingly. But old listings, those that have been around for a while, cannot see the improved market and think that they stand a chance at now finding their premium. They are aged, they are tired, and they need to attract a buyer in the way that aged inventories always attract buyers- through price.
Three of the four new, old, listings, have come to market at $100k less than they were offered at when they expired in late 2013. One listings, mine on Loramoor (above, $3.195MM), is on for $200k less than its prior ask. This is a positive sign for buyers, as it proves realistic expectations by these sellers. The key for buyers to remember is that while old inventory isn’t as sexy as a brand new offering, the brand new one, with its shine and polish, is going to command a premium that the aged inventory has no hope at achieving. If you’re a value hunter, this picked over inventory may offer you your best chance at securing a deal. The new inventory is going to be fought over by a very aggressive contingent of buyers that are currently shopping for a new lakefront home. The old inventory is being mostly ignored, and I’d rather slowly negotiate an ignored property than get in a bidding war on something new.
Today, consider the old inventory. Look it over again, even if you’ve written all of it off. Look at it closely, and instead of considering the current asking prices, ask yourself if there’s a price level on each home that would make you consider it for no other reason than that you’re an opportunistic capitalist. If you see a property, and you apply a desired price to it, then take the next step and email me for my opinion. I’ll tell you if it’s a reasonable approach or not, and this February will allow time for a few low ball offers in a way that July generally will not.
Like your description of the sun "still shining in a mostly useless fashion."
Here’s another description of that elusive, maddening slant of light:
"Bright Reason will mock thee
Like the sun from a wintry sky." — Shelley
Thought you’d enjoy!
What does it mean to have a monkey on your back?
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To have a listing on the market where the price doesn’t seem to drop low enough.
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Looks like a lot of brokers have a monkey on/in their back/basket.
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A toast to getting those pesty Regurgitating Monkeys of our backs, since one too many monkeys can effect us all..