2013 South Shore Club Market Review

2013 South Shore Club Market Review


Let’s pretend you’re looking for a vacation home. Not a Lake Geneva vacation home, specifically, but just a vacation home somewhere sort of close, but not remarkably close like Lake Geneva. You’ve set your boundaries to the North, Door County, which you know is a long drive- too long to make without serious contemplation- but you’re a sucker for boiled, boney fish. You’ve looked East, and set that point of no return somewhere towards the north end of the middle of Michigan. I’d give you the name of the town you’re looking as far as, but I don’t know the name of that town and neither do you. You’ve included it because you’re a sucker for Photoshopped billboard advertisements, the ones that show pretty scenes of Traverse City and you are yet to realize how impossibly far away that actually is. Even so.

You’re not looking South for this vacation home, because no one vacations to the South. If they do, it’s more of a winter thing, and there’s no point in that search unless we’re retired and looking to spend many months hosing off the textured concrete patio that surrounds our pool. We are not ready for that and we are not strange, so we look North and also to the East. We might as well look West, to that area of Galena, because you’re a sucker for whatever it is that Galena people do. As far as I can tell they play golf there, which is no consolation after driving that distance. This is our area, in all directions except south. We’re looking for a resort community of sorts, something both lush and luxe, with scenic beauty and recreational opportunities that we don’t have at home but also with conveniences and luxuries that we have always wanted. For everyone that wishes for solitude on the front porch of a sleepy old lakeside cabin, there are many more who have no interest in roughing it, no matter where it is.

This search, far and wide, would bring us to the South Shore Club. We’d find this locale because we couldn’t help ourselves, and we would then compare these amenities to those amenities found in other, similar enclaves within our broad geographic confines. The only problem here is that we wouldn’t find anything to compare this magnificent club to, and so we’d just skip all the other areas and settle into the South Shore Club and the life available to its residents. If we wanted luxury, we found it. If we wanted unrivaled amenities, we found those. If we wanted solitude without feeling abandoned, we’ve arrived.

This is not just how I think, rather it appears that this is how the market thinks. 2013 was an exciting year for the South Shore Club, in nearly every way imaginable. And with that, this: Your 2013 South Shore Club Market Review. As with our condo review, this year isn’t yet out, but as nothing is currently pending we’ll find it a safe assumption that no one will buy today and close within two weeks. The South Shore Club has been up and down over these last ten years, but those market pressures from prior years matter little today. Where we are today is on the cusp of a development that is sold out. We are close to viewing the SSC not as some development on some lake that is in some stage of completion, but instead as the premier development on the premier lake nearing a point in time where a reasonable point of entry is not guaranteed. Things are changing at the SSC.

You needn’t take my word for it, rather just drive through the place on a coming weekend. You’ll see no fewer than four homes under construction- activity that you would have been hard pressed to find since sometime in 2006. If you wait a few more weeks, or possibly a few months, you’ll see another new home, the one that will soon be built on lot 27, the lot that I just sold on Monday for $650,000 making for the third lot sale in the SSC during 2013. Lots 3, 18, 27 have sold this year, all brokered by yours truly. Another lot sold privately this fall, taking yet another property and placing it in the strongest of hands. The home at lot 14 sold this spring for $3.2MM, and has since undergone a renovation that has pushed that investment number much, much higher. If you take these lot sales, and this home sale, and combine those with the three sales from 2012 (two of which I brokered), you’ll find a development with undeniable momentum.

The grounds, now ten years in, have never looked better. The property is as a golf course without bunkers and flags, unless you count the flags in the putting green that is available to its owners. The lakefront is wide, some 900′ of nearly level frontage, with grassy lawns cascading from each home and running uninterrupted to that shore. The market understands the club now, and the rush of buyers over the past 20 months proves that the price capitulations accepted by the sellers have enticed discerning buyers who could buy private frontage but instead choose the amenities and conveniences of this great club.

With these three 2013 lot sales, I have just five remaining lots to sell. Those lots 19,20,31,32,6 will all sell at pleasing discounts to the current list prices, in line with the three sales from this year. Those buyers who have grown accustomed to available inventory in the SSC would do well to pounce on these last few parcels, as once they’re all sold it’ll be too late to buy land and construct your own vacation home here. If you’re curious about the financial strength of your neighbors, all four of the lot sales from 2013 have printed as cash, and the three MLS based built home sales since the spring of 2012 have all been cash purchases as well.

2014 looks to be an interesting year in the club, as built inventory will likely rise this coming spring. There are currently four homes available in the MLS, though I expect there to be two or three others by this coming spring. There’s going to be a very clean break in values inside the club, with discerning buyers paying much higher prices to be lakeside, where the homes truly feel and function just like private lakefront homes. These homes will still command prices in excess of $3MM, while the homes further back will fight for attention from the market, and price cuts from initial asking prices are all but guaranteed. Overall, I’d expect to see two or three homes sell in the SSC during 2014, and perhaps two or three vacant lots as well. 2014 is going to be a great year for the SSC, but some of the prices of homes near the tennis courts will likely drop as increased inventory applies downward pressure.

I’d like to offer a challenge to any buyer currently considering private frontage on Geneva. Before you commit to buy, come take a look at the South Shore Club. If you have a preformed opinion of the club, come take a tour of the property and the homes with me. You owe it to yourself to consider this option, as the homes are not only more economical than similar homes with private frontage, they offer a lower cost of ongoing ownership and amenities that even the most lavish lakefront estates cannot compete with.

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