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Lake Forest Market Update: July 2020

UPDATE (8/4/2020): 

Sotheby’s International Realty has sold (under contract) 525 Crabtree Lane in Lake Forest — listed at $2.65 million — privately. It was under contract before the property even hit the public market. Erica Goldman and Patrick Milhaupt (myself) are the listing agents representing the seller.

Read The Chicago Tribune Press Release

THE YEAR WE HAVE BEEN WAITING FOR

When it comes to looking at trends in Lake Forest residential real estate this year, one thing is for sure – 2020 will be no ordinary year.  In the luxury market, defined by this exercise as home sales of $2 million or more, Q1 2020 was off to the best start since before the financial crisis with a total of 8 sales as compared to an average of just 5 over the 10 years prior. 

Soon thereafter, the COVID-19 pandemic shut it all down.

Home viewings were ordered to stop, there were no open houses, and transactions were all but impossible to execute.  In fact, many pending transactions during the month of March were cancelled and earnest money returned to the would have been buyer. 

April 2020 had 0 (zero) transactions for just the second time in a dozen years.

Rumors of pent-up demand were swirling as the lockdown continued to isolate those in smaller spaces downtown.  Interest rates nearing record lows, the purchasing power of mortgagees increased meaningfully.  When private viewings were given the all-clear in May, sales exploded in a magnitude greater than any year since before the financial crisis.  

Then, BOOM!

Lake Forest has 26 sales of $2 million or more YTD – more than any other year in recent memory. It’s nearly double the average of 12.3 sales (through July) in each of the 12 years prior.  If the trend persists 2020 has the potential to produce anywhere from 35 – 50 total sales in excess of $2 million in Lake Forest. This is extraordinary.

In fact, we may have more by the end of August than the yearly total of any year post-2008. The highest was 30. 

CONCLUSION:

If you have been thinking about selling your home, or waiting for the perfect opportunity to maximize your value, now is the time to do it!! 

We would love to discuss a strategy so you can take advantage of this rare opportunity.

Reach out to me directly on my mobile at 847-849-9828 or by email at [email protected]. 

 

“Reflecting On The Pause In A Global Plague” by Mark Foster (Foster The People)

https://www.fosterthepeople.com/

By Mark Foster
Published March 24, 2020

This is the first time in my life, I have ever seen the world unite around a singular cause. I’ve heard about it happening in the past. I’ve heard stories about what it felt like after World War 2 ended; when people were broken, in mourning, but optimistic about rebuilding a better world. There was a feeling of unity after the twin towers fell and shook the nation. There was a sense of unity after the terrorist attack on the Bataclan in Paris; but the essence of the feeling was different. This feels different. Maybe it feels different because the past tragedies were thrust upon us in an act of human violence; being punched in the stomach by our fellow man. Maybe it’s because they were isolated incidents that the survivors could look at from a distance and mourn in the safety of their own home. I haven’t put my finger on why this time it’s different. It just is.

The fear is different. The uncertainty is different. The unity is also different. As I woke up this morning to texts from friends and family with updates, warnings, and the desire to connect with other people, I found myself thinking about the beauty of this pause. The entire world has pressed pause. It’s as if mother earth said, “O.K. you degenerates give me the wheel. I’m gonna steer us back in the right direction.”

Sometimes, a pause is the only thing that can bring clarity to the manic momentum of the rat race we’ve allowed to hijack our humanity. Sometimes a pause is what we need to remind us that we are not gods. We forget that we’re actually sensitive, vulnerable, weak creatures that need to breathe oxygen multiple times a minute, drink water, eat food, and maintain an internal temperature of 98.6 degrees. It’s easy to forget about our vulnerabilities when we have been spoiled with the comforts of societal excess.

Man is born with an instinct to go further than the previous generation; to achieve more than our mothers and fathers. We are born with an innate fear that when we take our last breath, we will be forgotten. Our fear of death drives us to leave behind some kind of legacy to be remembered forever. We want to feel like we made a difference. We want to build. To create. Whether it’s a legacy by passing our DNA to children, breaking “impossible” world records, or building skyscrapers that tower above the clouds, we have a deep desire to feel like we matter. In that desire, we tend to make a lot of mistakes chasing the trophy while turning a blind eye to the trail of dead we leave in our wake.

In today’s world, the end is much more important than the means. If you become the greatest at what you do, it doesn’t matter how you got there. It just matters that you’re at the top of the hill. We want to be famous. We want to be rich. We want to be special. We want to have likes on Instagram, friends on Facebook, and retweets on Twitter.

In an age where everything is more connected than ever before, this attitude has seemed to affect, and infect cultures that historically have placed the health of society over the success of the individual. This western philosophy of being the god of our own universe is contagious. “Your truth is your truth. My truth is mine.” It’s got a seductive ring to it.

The age of misinformation and creating our own narrative has dangerously replaced reality. In our quest for power, we’ve learned if we create our own reality, nobody can tell us we’re wrong; or we failed, or we’re not on the right path. The spoils don’t go to the victor. They go to the person who successfully shapes the perception of who won the battle.

Our greedy endeavors got us here, no doubt. This tiny virus has effectively put its finger on the very core of our selfishness. We’ve become gluttons in industry; destroying the planet with pollution, waste, and excess out of our hedonistic desires to accumulate wealth. We’ve become lords over the land we inherited, denying people the right to partake in the very dream we are benefitting from. Unchecked capitalism encourages us to enjoy the view from the best possible vantage point, even if that means building our castle on the bodies of others.

The evidence is now overwhelming that we are facing the most dangerous enemy the world has seen since the atomic bomb was introduced to the world in 1945. If this is not contained, there will be millions of deaths. This isn’t just a physical virus. It’s an economic virus. And when the economy suffers, people die. In the coming months, our survival is dependent on our willingness to put the needs of others ahead of our personal comforts. It is the ultimate test of our willingness to sacrifice our personal luxuries for a strangers necessities. Are we willing to trust each other enough to buy only what is necessary if that means our anonymous neighbors will have a fighting chance of survival?

Sometimes the only way to shake us out of our arrogance, is to remind us that we are only human. The world existed before we were born, and we don’t know what happens after we die. This is the most terrifying thought that exists in our mind. It goes against our very nature of living our lives like we are gods. We spend most of our life consciously or unconsciously suppressing this question. We try our best to “be in the moment.” But the truth is, when we’re confronted by a tangible threat to our survival, these internal tenets of our faith-in-self disappear and we return to the most haunting question we are born with: why are we here, what are we supposed to do while we’re here, and why does any of it matter.

My hope is that as we are in this pause of reflection, we will dig within ourselves and find our soul again. I hope we will reach out to people in need and give them the other half of our sandwich. I hope that our governments work together, comparing their research and sharing their best scientists work to collectively find a vaccine. I hope our employers and heads of companies will reach into their profit margins and share a piece of the pie with the workers that helped build the empires they lead. I hope that landlords will be patient with their tenants paying rent on the first of the month, knowing that they may have been laid off of their job. I hope banks will give a grace period to debtors paying back their loans. I hope our farmers will continue to supply us with the food we need at a reasonable price. I hope that healthy people will respect the fact that they may carry a virus that could take the life of someone less fortunate. I hope that in these times of fear, we will have faith. Faith in nature. Faith in our fellow humans. Faith in our scientists. Faith in our doctors and nurses. Faith in our government to govern with empathy. Faith in a higher power to help us find the solution and save us from ourselves.

Fear, pride, greed, and selfishness will cause unnecessary deaths. I encourage our leaders to lead with humility. We will come out of this on the other side stronger and more connected. When this storm passes, we can’t forget what it feels like right now. We are fragile. We are not gods. We came into this world with nothing, and if we live our lives only for ourselves, we will leave the world with nothing.

Insight: The Lake Forest Luxury Premium

One of the more fascinating and underrated statistics I have found in Lake Forest real estate is the relationship between price and premium paid. The above VIZ shows an interactive scatterplot for every closed home sale (single-family detached) in Lake Forest (60045) from 1-January-2019 to 3-March-2020.

The vertical axis shows the “Price Per Square Foot” of the home sold.

The horizontal axis is simply the price of the home sold.

(Ex: 123 Main St. is a 1,000 square foot home that sold for $500,000 and 456 Shady St. is a 1,000 square foot home that sold for $300,000. Therefore, 123 Main Street sold for $500/sf and 456 Shady St. sold for $300/sf.)

Price Per Square Foot ($/SF) is a measurement most appropriately used for finding trends in markets and is not necessarily a perfect way to compare a few or even several different homes. It is common in the commercial real estate industry to compare large buildings against projected revenue generated and market averages to determine a suitable price for the property.

Generally speaking, comparing historical data from markets across the country, as the price of a home increases the Price Per Square Foot paid decreases. The logic is that after a certain point, a buyer is not willing to pay a premium for additional living space that they may not necessarily need.

In Lake Forest, as shown in the data above, the Price Per Square Foot increases on an accelerated trajectory as the price of the home increases. This means that the more expensive the home, the more premium a buyer in Lake Forest is willing to pay. If there was no premium for luxury, the trendline would be flat, a solid floor bolted to $240/sf.

Furthermore, the data provide an illustration necessary to convincingly argue that Lake Forest is still truly a luxury home market. There are well-known editorials and journals who have incessantly underscored the decreasing prices of luxury homes along the North Shore. Overall, perhaps so. But luxury is timeless, demand for best-in-class real property is resilient, and the luxury market in Lake Forest will withstand the test of time.

If you would like a complimentary market valuation for your property, please visit:

SOTHEBY’s home valuation

If you have any questions or comments, please text or call my mobile at (847) 849-9828.

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Jameson Sotheby’s Formalizes Partnership With Peerage Capital

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https://finance.yahoo.com/news/peerage-realty-partners-formalizes-substantial-195000781.html

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