I remember when I didn’t understand the South Shore Club very well. The year was 2002 and I visited an open house there with my new bride. We marveled at the house and left. I didn’t have any business playing in that sandbox at the time, after all, how could an agent with only six years experience understand the sort of development that these shores had never before seen? I didn’t understand who the buyers might be, mostly because I didn’t understand then why someone would opt to share a tennis court, swimming pool, pier and boats for $3.5M when they could accomplish all of that on their own, with private frontage, for the same price. Things didn’t add up to me, and so I went from 2002 to 2007 without a single sale in the South Shore Club ( I sold a lot there in 2007). In late 2008 the market began to melt, and it wasn’t until 2012 that I retuned to the South Shore Club.
When I returned, I did so with a couple of listings that had languished on the open market. The developers turned to me to help them sort through the SSC and figure out how to sell off the remaining inventory. We started with a few home sales (setting a new market expectation for values), and over the following few years I sold all sorts of properties in the Club. I sold off the remaining lots for fractions of their prior target values, and I sold several homes in 2012-2015 for what seemed like low valuations at the time. One of those homes I sold was at N1599 East Lakeside Lane. It was a nice enough, but simple, Orren Pickell built home, and I sold it for $1,865,000 in 2014.
Last Friday, I sold that same home for $3,350,000. In that number there is exceptional nuance, and in the process there is a story. I had a client who wanted to be in the South Shore Club, and he sent me on my mission. With no available inventory, I had to find him an option. There was some sort-of available inventory in the back of the club near the tennis court, but this buyer wanted to be on the semi-circle with a view of the lake. I reached out to every owner and had many conversations about value with them. Some owners weren’t interested, no matter the price. Others asked for pricing, which I provided to them, and then they declined. The prices that were volleyed ranged from the low threes to the mid fours. The last three sales in the SSC involve two on the lakefront (both my sales in 2017 and early 2018, closed at $4.175M and $4.7M respectively), and one at the back of the circle in 2019 that closed for $3.225M. That’s hardly a uniform or meaningful data set, but those sales combined with the market expectations of the SSC sellers allowed us to determine that $3.35M was a reasonable sales price for this particular home.
In this sale, I see some trends. This buyer is someone who owned a private lakefront home and wished to simplify. That was, after all, the original intended market for the SSC. The developer figured people would want all sorts of amenities but they wouldn’t want to maintain all of it on their own. For a while, the market scoffed. Today, the market agrees. The South Shore Club is wildly popular (as evidenced by not more than a single seller wishing to sell), and buyers are finding it to be a very convenient way to enjoy Lake Geneva. I expect the market at the Club will continue to produce very limited inventory, and if sellers figure out how to properly present and price these properties, this trend will continue as long as the broader lakefront market maintains its steady hand.
There’s a lesson for buyers here, too. This was the third off-market direct sale I’ve facilitated this year (more on the other direct sale from last week in another post). Some people think this is a bad thing for our market, but I see it has the next trend in luxury real estate. YTD 2020, the market has closed 22 lakefront properties. Of those 22 (including SSC and Glenwood Springs), I’ve closed 10 of them, personally. There shouldn’t be any doubt as to who might be the lakefront market leader. Because of this position, I have a wide network of sellers and buyers, and if I can put together direct deals for the benefit of both parties, why wouldn’t I? I was pleased to facilitate this newest transaction for a wonderful buyer and equally terrific seller. In this deal, the seller captured a significant return from his 2014 investment, and the buyer found what he was looking for an acceptable market rate. Everyone wins when inventory is discovered and the pricing is properly articulated.