I am not in the business of manufacturing. I do not make anything, I do not warehouse anything. I do sell something, and I do so through a network of distributors, better known as real estate agents. They have shinier cars than most distributors, and they have large hair and magnetized decals on their cars, but they are still distributors. Because I’m not in the business of manufacturing some new product I’ve never had to take the temperature of the buying public as it relates to that new product. If I were to make a wooden toy, then produce that wooden toy, then market that wooden toy, I’d find out if the world liked it shortly after my wooden toy hit the shelves.
What if they didn’t like it? It is a nice wooden toy, after all, and all I’m asking is $75.99 for it. Seems reasonable, given all the wooden toy making machines I had to buy. My costs are high, because I have a secretary and some staff, and at least one guy who comes in late at night and sweeps up the sawdust. After a week on the market, I sold four little wooden toys. My projections called for 80,000 sales. So do I keep looking for the right market, or do I adjust my toy to meet the market that I’m already in? Do I advertise more to find the right wooden toy buyer or do I just cut the price to $9.99 so I can sell loads and loads of them?
If we’re in the business of making things, and instead of toys we’re making big stone and slate mansions, and instead of warehousing them in some dirty business park near the airport we warehouse them on a beautifully coiffed parcel of land on the southern shore of Geneva Lake, we’ve already decided what we’re going to do to increase our market share. We’re not going to beg for our position in the market. We’re not going to incentivize our distributors by offering them increased pay. We’re just going to drop our prices until the market deems our product worthy of our sticker.
Another month now past, another South Shore Club sale. This one of a $1.895MM listing at 1599 Lakeside Lane. This was an early Pickell built home, with the sorts of finishes you’d expect but not too many that you didn’t plan on. It is a beautiful home, on a lot that’s close to the lake- to the North of the swimming pool- and I just sold it for $1.875MM (personal property included, actual real estate sales price was $1.725MM).
This home had been listed near $3MM at one point in the history of the SSC, and that price proved to interest no one to the point of check writing. There are detractors now that will say this sale was “too low”. That it was somehow detrimental to the health of the SSC, and that it wasn’t just what the doctor had ordered. That’s what narrow minded, small picture people think, and we’re nothing if not open minded, large framed schemers. That sale takes inventory off the market, removes it from disinterested hands and places it into new, strong, enthusiastic hands. The key to a vibrant community, one that excels in practice as well as in theory, is involved, happy owners. We now have another one in the SSC, and this just the latest in a string of sales over the past 24 months that I’m happy to have played a role in.
There is another sale pending in the SSC as well, another home, this one incredibly beautiful but also closer to the lake and therefore more expensive. Since the times in 2011 when I suggested price ranges for the club that would make market sense, and that would, in turn, propel the club forward, the days and months since have yielded six sales. All of those sales have fit nicely into my targeted price structure, and there’s no reason to think that the following sales will not follow suit. We’ll need to clear aged or troubled inventory before price appreciation can begin, and we’re no more than two sales from exactly that taking place. The South Shore Club is running smoothly, the market is responding accordingly, and there’s little reason to think the future is not exceedingly bright here.
So what’s next? Well, next are the vacant lots. Five in total, all looking for their first non-declarant owner. Price targets are easy now, especially after a 2013 where I sold three vacant SSC lots. Buyers have clear value ranges where their built home should fit, and if a buyer can buy a lot and build in accordance with that pricing vision, then they should be secure in their decision. But this is the financial, and while I’m happy to tell you that everything has been falling into place, the real magic of the club happens this summer, when owners walk over grassy lawns down to their piers, where their boats, and their Lake Geneva summer, await.