There were common themes during the housing downturn. The first theme was that some buyers were able to capture their motivation and seek out value. When they found value, they bought the value. The wonderful thing about this brand of value is that it changes your life, which is better than the sort of value that’s found when you drive across down to save two cents on gasoline. Another theme was that sellers appreciated buyers then, and if a buyer came to their door with a check, the smart ones took the check and handed over a deed. These were common themes back then.
The other theme on the lakefront was that building of new homes never slowed down. Perhaps there would have been more construction on these shores if the market had never slowed, but a drive around this lake in a boat during the years from 2009 through present has served as a nice reminder that most elite personal economies weathered the storm rather well. There were new builds on the water in each of the bad years, and in every year since. This year we have fewer new builds underway, perhaps just a couple finishing up and a couple currently being built, including the odd palace on South Lakeshore Drive, Fontana. The current conditions appear to be the quiet before the storm, as there are several lakefront builds planned for the coming weeks and months.
The South Shore Club has been awash in a frenzy of dust and lumber. The lots I sold last year have mostly been built on, and three of the four builds from last year have been completed. The last will be the finest of them all. There are a few vacant lots held by private owners now, and if you were late to the South Shore Club party but wish you had an invite, you’d do well to email me and ask about privately available parcels. Or, you could stay on that ridiculous automated email list you get from some agent you met at an open house once, either way.
I know of at least three new lakefront builds that are coming to our shores in the next few weeks, and as I play the cherished role of advisor to many of these new builds, I find there is a common theme running through all of them. There is a desire to position a property at an all-in price that reflects actual value. This has not been the case in most of the builds on these shores in the last 10 years. The mistake onlookers make is that they see a new build and assume that owner is in for some huuuuge sum of money, like maybe $4 or 5 million. The reality is that many of these new builds are actually $10MM type numbers, with some being much, much more. The desire to adhere to a market structure might be a hallmark of my clients, and if that’s a hallmark I’m beaming with pride.
But in this desire to stick to budgets there can be something missed. The overriding goal of each build is to create something that will provide unmeasurable joy. This is the goal, no matter what. Does a coffered ceiling, a Wolf oven, and a marble shower increase enjoyment of a lakefront home? Would you be upset if I said of course? I know, I know, that goes against everything I’ve ever said, but really it doesn’t. I don’t want purchase decisions to be made based on the shiny and the slick, because that undermines the goal of finding lasting value. But once the lasting value is purchased (the land, the neighborhood, the setting), why not increase the comfort level to the highest limit possible?
I’ve had this conversation recently with a beloved client of mine, and my advice for lakefront owners undertaking the build process is based on my own building history. I have never, ever, finished a project and been upset about money that I spent. I have never looked at a finish and thought that I wished I had made it less nice. I have never looked at a Viking range and thought it to be a stupid indulgence. I have never looked to a marble shower and wished for it to be tile. I have never looked at hardwood floors and thought they should be carpeted. But I have looked at a bathroom and thought I should have made it bigger. I have looked at a trim element in a room and wish I had made it bolder. I have lamented the money I didn’t spend far more than I ever lamented the money I did spend. In fact, it can be disastrous to underspend if the end product is someday supposed to fit the eye of a high end buyer.
This, of course, is advice within reason. If the indulgence pushes the build price beyond the scope of the future market value, then this particular item might be a mistake. But if the difference is between great windows or reasonable windows, go great. If the decision is between a fancy oven and a bad oven and the savings represent a few thousand dollars, go great. If a roof is to be cedar shingles and the budget really calls for asphalt, go cedar. Maybe borrow a litmus test from Ben Stein. If the purchase will lead to you eating dog food for dinner, don’t make it, otherwise, spend away.
Currently there are several vacant parcels available on the lake. There’s a small lot in the Elgin Club, and a big lot in the 700 Club. These are only clubs in the loose sense of the word. There are some possible opportunities in the South Shore Club, as I mentioned earlier, and there is one possible lakefront parcel in Fontana. There are several tear downs on the lake that represent potentially tremendous land value at the right discount to ask. If you’re interested in one of these parcels, let’s chat. We’ll first buy the right land at the right price, then we’ll talk some more about that marble shower that is absolutely, positively worth the price.