Saturday was a nice spring day. It was so nice, in fact, that I went to the hardware store and bought a trailer hitch ball. It was bright and shiny, clean. Pity those trailer hitch balls, so shiny in packaging yet immediately destined to be scratched, dirty, and worn as soon as they are put to work. I bolted the ball to the hitch of my tractor, and went hunting through the woods, looking for the spot that I stashed my boat. Normal people would put their boat in a barn, or under a tarp behind their garage; I stuck mine into the woods behind my house, far enough to be out of sight during months when looking at a boat is nothing but depressing.
I found the boat, lowered the trailer tongue, and pulled it from the woods and onto my lawn. The boat was dirty, as it always is, but it would need to be washed, and waxed, and cleaned and tuned before I launch it into the waters of the Abbey Harbor, potentially as soon as this week. I surveyed the boat, making a mental tally of the tasks ahead. I would need to clean the hull with toilet bowl cleaner before waxing with an orbital buffer. I need waxing pads for the machine, and I need some wax. The boat needs gas, lots of it, so I’ll fill it, too. The boat has five batteries, all of which are dead and will need ample charges. The depth finder ceased working last year, so that’s been sent to the manufacturer with a note that I scribbled with a post office pen, “Please fix”.
The boat will be launched this week, but there is much work to be done and much more money to be spent before that can happen.
If I were an owner at the South Shore Club, last Saturday’s sun and tolerable temperatures would have caused my mind to wander towards summer, and to boats and to open water. The difference, I suppose, is that South Shore Club owners get to revel in all of these fun summer events without preparing for them. I must wash and wax and gas if I someday wish to boat. They simply wait for the boats to be prepared on their behalf, and they’ll take them for a drive when they feel like it. There is no commitment to the boat required, there is none of the sowing and plenty of the reaping. I think it would be nice to be a South Shore Club vacation home owner, and apparently most everyone else feels the same.
Take a drive through the South Shore Club. The grass is still brown, the pier still stacked on the shore, the pool still covered in a dark green canvas. None of this looks particularly wonderful, but there is a movement underway here, and the motion is undeniable. I’ve long felt that the SSC will, over a long enough timetable, thrive in this market. There is nothing like it, pretty much anywhere. But short term, I have had my individual market concerns about the Club. Inventory will always be the issue at the SSC, and as long as there is too much inventory inside these pretty boundaries, the market will struggle. This is why wild inventory swings are dangerous for the SSC, and this is why, last fall, I had some hesitations.
My concern was over the built inventory. While I had been successful in selling existing homes and the scant few remaining vacant parcels, it seemed that one built home sale begot a new built home listing. We weren’t eliminating inventory so much as we were replacing it. One sold, one listed, and so on and so forth. Last fall, I ran through scenarios in my head and with my intelligent buyers. I thought this spring was going to yield as many as eight built homes on the open market. This, I figured, would be too much inventory, and the gains the SSC made over the prior 12 months would be met with the stiff headwinds of heavy inventory. This was my short term concern, and I voiced it often.
Fast forward to this morning, and the worst case scenario that had kept me awake at night never happened. I sold the home at 1599 Lakeside for $1.725 (package price was $1.875MM). The home at 1622 Lakeside is under contract, and not available. One home that I thought was being built on spec turned out to be a custom home being built for an owner. Another home that I feared might come to market has decided to stay, and to enjoy the bounty of another Lake Geneva summer. Instead of eight open market listings, the South Shore Club has just four–One up front at $3.799MM, one by the pool for $3.199MM, and two on Forest Hill, priced at $1.749MM and $2.149MM, respectively. The inventory boom that could have created some short term trouble for the SSC never happened.
In addition to the dwindling built inventory, there have been more lot sales as well. I sold lot 27 late last fall, and I have lot 20 under contract to a discerning buyer. There are just four developer owned lots left, out of 40 original parcels. Lots 19, 31, and 32 (listed in the $600s and $700s) are on the semi-circle with some water views, and lot 7 is back on Forest Hill, tucked into the trees, listed at a buyer pleasing $395k. A drive through the club today will show four homes under construction, and thankfully for the owners it appears as though all four will be finished or at least finished on the outside, prior to Memorial Day. It’ll be a beautiful summer in the SSC, and as the club gets further built out it becomes even more exclusive. The financially stressed, or otherwise disinterested owners have sold, and we have a new crop of owners seeking to enjoy the lake in a most leisurely way.
If you took the South Shore Club for granted over the last decade, I can’t say that I blame you. If you take it for granted now, it’s safe to say that your window of opportunity has nearly closed.