In musical chairs, the person left standing when the music stops is the person who loses the game. Fortunately, there is recovery after losing this game, especially if you can convince your friends to play just one more time. A do over; that's what you need. Though silly games are easily repeated to give the loser a chance at redemption, life is not like this. In life, and in summer, the game of musical chairs has ended. The music has stopped. If you are left standing, this is horribly unfortunate. For those of us who have planted our rears in appropriate chairs, the spoils of our victory will be lavished onto our lap starting today. Welcome to summer.
The significance of this day makes this post all the more delicious. There was a sale yesterday. A great big, beautiful, much anticipated sale. I was blessed to find myself with both a buyer and a seller and a beautiful home that transferred from one to the other. The date of this reckoning? The day before the one that matters the most, which is today, making the sale date yesterday. A lovely young couple from Chicago purchased 1621 East Lakeside Lane in the South Shore Club for $3.575MM, and in doing so, they received not only the keys to a magnificent lakefront home, but also the keys to the best summer of their lives.
The sale is important, not just for what it does for the lucky family who will be in residence this weekend. It's important because of what it does for the market. Specifically, for what it does for the South Shore Club. Long ago, I put a price target on the Club. It was an ominous target that was not readily, nor happily, welcomed by the patrons of the Club. I saw value ranges in the SSC that spread from $3.25MM to $3.5MM on the lakefront, to $2.5MM to $2.75MM on the circle north of the pool, to $2MM to $2.5MM behind that, and $1.7MM to $1.8MM on Forest Hill by the tennis court. This was what I figured was going to happen with the pricing in the SSC, and this is what has been happening.
My sale from yesterday was for a fully furnished home. The furniture, by the way, was all Ralph Lauren and likely had a replacement value in the $400k range. When you consider those inclusions, the sale falls squarely in the range of where I figured the select few true lakefront homes in the SSC would sell. A recent sale by the pool (privately transacted) for around $2.5MM further cements my opinion of value from the lakefront south to the pool. There is another sale brewing in the club, this one structured as a rental with the likely end result being yet another sale. The South Shore Club, after scrambling to find its footing over the past four years, appears to have landed.
Whether the landing should be viewed as being soft is a matter of perspective. If you're an owner, and you're losing a million bucks on your sale, this must feel as though it is anything but soft. But from a greater market perspective, as someone without a horse in this race, I view the price capitulations as expected and reasonable. The liquidity that we're seeing in the Club today should hold for the summer, and I would not be surprised in the least to see another single family home close before 2012 is out.
What drives a buyer to the South Shore Club is simple to understand, but surely varies for each new buyer. There is luxury here that is unrivaled by anything on the water priced under $5.5MM. There are amenities that only the most lavish of lakefront estates can compete with. (Pool, tennis, putting greens, clubhouse, piers, marina, walking trails, 900' frontage, and on and on. And on.) But what is obvious today is that buyers will find their way to the SSC not just for the amenities, but for the pursuit of value. There is value and there will continue to be value, both in the built structures and in the few remaining vacant parcels, and as some buyers ultimately shy away from the unpleasantries of enduring a new construction project, more will find their way onto the lush lawns of the South Shore Club.
To the seller, I am supremely grateful for the chance to represent this sale. For the buyer, I'm equally grateful for the chance to counsel and assist, to help kick down the door to the summer of 2012. For everyone reading I hope this weekend finds you happy and healthy, sun kissed and water splashed, and most importantly, at Lake Geneva.