I’ve never been the subject of a quarantine. I never had lice, or whopping cough, and I have so far narrowly avoided tuberculosis, SARS, and both the bird and swine flu. I have also never been in prison, which is a very good thing, so I have never been isolated there either, which, if you know me, you know that if I were to go to prison I’d pretty much need to be in solitary confinement, for my personal safety. But just because I’ve never been set apart and locked away doesn’t mean I don’t understand the value of such treatment. For instance, if I could grab the most recent lakefront sale on Geneva and stick it in solitary confinement where it could sit and ponder all of these things that it has done, I would. But real estate doesn’t exist in a vacuum, though sometimes it probably should.
A few years ago, a great big estate on Fontana’s northern shore was brought to the market. What a fine old place it was. Overflowing with bits of cottage charm here and some more over there, it was nice but it wasn’t a show piece. It wasn’t a shining example of any particular period, nor were the old finishes elevated, and the maintenance through the years was perhaps anything but high end. It was an old house, but not a spectacular old house in the way that Clear Sky Lodge is, and so it was a house that the market viewed and thought little of. At $7.95MM it looked great on the market, but the reaction was one of many, many yawns.
The property was the most impressive aspect of this old house, and with 6 acres and 238 feet of frontage, the magnificence of the parcel could not be overstated. It was, and is, a most beautiful piece of land. But even the land is compromised, both by extreme slopes and by extreme frontage- the neighboring house is Angel’s Flight- a name that the property came upon honestly. Personally, I would have named that old neighboring estate Heart Attack Hill, but that’s why I write about real estate and I don’t offer naming services for lakefront estates. So the property that just sold was $7.95MM a few years ago and it was a large parcel of land limited somewhat by the active camp to the East and by the sloping nature of the land.
The catch here is that the property was never a $7.95MM property. While some estate parcels measuring the same size would indeed be worth that lofty sum, these parcels would be in different locations, chiefly, Snake Road or some stretch of South Lakeshore, or perhaps the sinewy little stretch of road that spans between Cedar Point and Pebble Point, that stretch were many large, worthy, estates lie. This property was not in such a strata, so $7.95MM was less a realistic price and more just a number. That’s why the market didn’t react well to the property for quite some time, at least until the asking price was cut in half late last summer. Josh Flagg would have you believe that horses and champagne bottles as large as SCUD missiles are the key to selling houses. This sale suggests that the way to sell a house is to cut the price by more than half.
And that’s why we must try to put this sale far away from anyone. The property closed this week for $3.25MM. For six acres and 238′ of frontage. Granted the lot was somewhat limited, but still. That’s a heck of a parcel for that money no matter how you slice it. The sale now begs the question: What will this do to the market? The answer is: nothing. It’s a great sale not because it’s low but because it’s just that, a sale. All sales are good, even if they don’t involve me (which this one didn’t). To remove a property from generational, apparent disinterested ownership is a good thing, particularly when the MLS signals that it was a cash sale, as many of these lakefront deals tend to be. Strong ownership creates strong market conditions, and those are the conditions that we seek.
So for now, any attempt to quarantine this sale will be in vain. Buyers will point to it even while sellers point away from it. Look, a squirrel! It won’t work. The comp is fact now, and it will have to be dealt with. Thankfully, I don’t see it as mattering much. The property was large but the location wasn’t marquee, and one sale of this sort doesn’t create a market. The sale will simply be filed under “Strange” and we’ll move on.