"Home Alone" Home Sells at Sizable Discount

Winnetka is home to many blue ribbon properties. From incredible lakefront mansions to turn of the century Victorian masterpieces to newly constructed “McMansions”.

However, there is no Winnetka home that is more frequently visited by tourists or photographed in the media than 671 Lincoln....commonly known as the “Home Alone” home.

Yes, this is the house where the 1990 classic staring Macaulay Caulkin, Joe Pesci and Daniel Stern and directed by the late John Hughes was filmed. Although born in Lansing Michigan, Hughes' family moved to Northbrook when he was twelve or thirteen and never looked back.

Hughes filmed a series of hit films on location at North Shore venues, but none have held the endearing and deep memories that are associated with “Home Alone” and the house where it was filmed.

Because of its prime location, a block or two from the center of town as well as its proximity to the Winnetka Community House, the commuter train station, Lake Michigan and being surrounded by other lovely, large well maintained homes, it would appear to be among the most desirable properties in town. We have many other “Home Alone” locations in Winnetka including the ice rink (Hubbard Woods Park) and the grocery store (Grand Foods), but the house is the site that tourists want to visit. I drive past the house daily and on many days, I see a minivan with Minnesota plates or an SUV from Georgia double parked on the street with families with small children or a small group of “thirtysomethings”, jumping out of their vehicle and taking pictures. I suspect that some bold visitors have knocked on the door and asked for tours.

So lies the fly in the ointment.

Over the years, I have received calls or internet inquiries from several interested parties asking if that house was for sale, how much it might be worth and/or was it available for visiting.

Last year at approximately this time, I began to notice some hustle and bustle around the house. Painters and other contractors were busily doing there thing and it became apparent that something was happening. I received a few calls from media sources around the country inquiring about the house being for sale, which gave me some indication that the PR machine was beginning to spin, but at this point there was no local information available.

As it turns out, there was an international PR blitz beginning to spin which was unlike anything that we have ever witnessed locally. Within days, the national (and international) media was discussing that the house was coming on the market. One would have to think that this would only increase the public notoriety of the property.

Interestingly, a similar PR parade occurred last week with the introduction of Michael Jordan’s Highland Park property to the market.

In early May, the "Home Alone" house officially came on the market. It had been pre-marketed outside of the MLS for a few weeks before. The asking price was $2,400,000. On the surface, it is a classic center entrance, brick Georgian built in 1921. It sits on a lot that is slightly larger than ½ acre and has a 3 car detached garage. As discussed earlier, it sits in a wonderful location and very desirable location. While the price may seem high, you must remember that this area of Winnetka commands very high prices. Whether this original asking price had some built-in padding due to “notoriety” is open to debate, but the house came on the market with a great deal of fanfare.

After a little more than a month, the price was reduced to $2,175,000, and two months after that, it was reduced to $1,950,000. Just before Thanksgiving, the property was withdrawn from the MLS.

I spoke to several buying clients regarding viewing the property. They loved the style and the location, but they wouldn’t even consider it because they didn’t want to deal with the public personna that this house holds. Perhaps the international publicity allowed for great exposure, but it may have heightened the concern of local buyers (who are the most likely target purchasers) regarding the “tourist” issue.

Yesterday, the property showed up in the MLS as “New”, “Contingent” and “Closed” for $1,585,000. While this is a lot of money in any market, it is at a ⅓ discount from the original asking price. In fact, because of the lot size and location, the value of the land itself for a new construction home, is probably in the area of $1.3 million (plus or minus $100,000).

I’m certain that there is a large portion of the international population that has their fingers crossed that demolition is not the planned use.

The Mating Ritual

The process of negotiation in a real estate transaction is very much like a mating ritual. It is a complex interplay between tactics and assets. There is the display of plumage and then the dancing and singing which eventually results in either the culmination of the deal or one of the parties walking away and seeking out a different partner.

(photo courtesy of aussiegall's photostream on Flickr http://fr.fotopedia.com/items/flickr-936410667 )

If it is rushed and the elements of the ritual are not fully executed, there is little chance of a successful transaction.

I have heard recommendations that buyers should present a strong or even “best and final” offer at the first strike, but this can only be effective in a few, very specific circumstances. One would be in a strong seller’s market where the buyer wants to be recognized and taken seriously by the seller. The other would be in a situation where the buyer is happy to make their offer and walk away, without looking back, if it doesn’t meet the seller’s needs.

The “mating dance” allows for the parties in a real estate negotiation to develop trust and comfort during the process. Each step of the “dance” provides an information gathering process for all parties and each step has a profound effect on the next step.

As the ritual progresses, each party is influenced by the haggling of the other party and must make a decision as to whether to move ahead or to cut their losses and walk away. It is a complex interplay between tactics and protecting one’s assets.

Like the mating ritual of most of nature’s creatures, the negotiating process in real estate transactions has many moving parts. It’s important to keep your eye on the ball but not to let the emotional components take center stage.

It is important to recognize that an expert in negotiating “mergers and acquisitions” or “the price of athletic shoes manufactured in Taiwan” might not necessarily be the best person to negotiate a high end real estate transaction on the North Shore. It is important for the negotiator to understand local customs and rituals and be very knowledgeable about the local marketplace. It is also helpful for the negotiator to not have a “horse in the race”.

Would you hire a peacock to advise you on the mating rituals of bald eagles?

Yes, the U.S. economic recovery is quite fragile at the moment. There are still major concerns regarding the debt restructuring in Europe. The war in Afghanistan continues to rage...as well as drain our economy of much needed resources both in dollars and in human capital. The Iranian nuclear threat is sending shivers throughout the world. The partisan activities of Congress are an anchor on economic progress. All of these factors are clearly placing a level of uncertainty in the minds of Americans.

However, the employment situation is clearly improving. The stock market, which is often a reflection of confidence in the economy...or a lack thereof...has steadily improved and the volatility of the past few years, which is a genuine destroyer of confidence, has not been present. Thanks to the strategy of the Federal Reserve, interest rates are at incredibly low levels. Lenders claim that they are making capital available to borrowers.

(photo courtesy of Plu_Plu photostream http://www.flickr.com/photos/paulaguinto/5609603207/in/photostream/)

While much of America was experiencing the “deer in the headlights” feeling during the first years following the banking crisis and subsequent stock market “crash”, this too has passed.

Americans are beginning to feel more confident. While it appears that the luxury end of the retail market was the first to show signs of strength, this confidence seems to be moving down through the supply chain to include Americans at all income levels.

One must remember that all housing markets are “local”. What is happening in Winnetka and Wilmette may be very different from what is happening in Toledo or Portland.

On the North Shore, the spring real estate market has brought more new buyers to the market than had been seen in many years. These buyers are telling us that they are coming to the North Shore housing market because the combination of greatly reduced prices and incredibly low mortgage rates are providing an opportunity that had never before been available to them. Many are also telling us that they are finally able to sell their houses, townhouses and condos in Chicago...(or in Charlotte or Santa Monica) which seemed an impossible task just a year or two ago.

Yes, the world economic condition is fragile, but at the same time, it appears to be stronger than at any time in recent years. It’s a very deep hole and we are trying to dig ourselves out. It took many years to get us in the trouble we were in.

While the economic recovery is fragile and vulnerable to a variety of factors, we’re beginning to see the light at the end of the tunnel.

House of cards? We hope not!

Something’s happening here...

What it is, ain’t exactly clear...

For what it’s worth, something is happening in the North Shore real estate market.

Since Labor day, there had been an unusually small number of new listings hitting the market on the North Shore, particularly in Winnetka and Wilmette. Sure, there is always a seasonal slowdown, but it was much more pronounced this year.

Since then, some properties have been sold...some that were “for sale” were rented and some listings expired and did not return to the market. Others were taken off the market for the holidays.

2012 began with the fewest active properties for sale in years....

great scenario for sellers!!!

(photo courtesy of e_monks photostream on Flikr http://www.flickr.com/photos/e_monk/2704329009/sizes/m/in/photostream/)

Since the beginning of the year there has been a steady flow of new listings. Unlike the past few years, it seems that many of the new sellers are being realistic in their pricing and as a result, there have already been a lot of transactions....

great scenario for buyers!!!

Sure, there is pent up supply...

but there is also a whole lot of pent up demand.

What we are seeing the most of is pent up confidence

Stocks are at multi-year highs.
Unemployment seems to be easing down.
Distressed sales appear to be declining.

One new (not-distressed) listing came on the market last Friday and the listing agent reported that there were 19 showings over the weekend. It was under contract by Monday. Other listing agents reported six or more weekend showings for new listings at all price points including those over $2 million.

For what it’s worth, something is happening here....what it is ain’t exactly clear.

The American dream seems to be alive and well...but you better check back in a few weeks for an update.

Junuary is Over..Febuly is Just Beginning

We are lifelong residents of the Chicago area. We relish in experiencing all of the seasons. Otherwise we would choose to live somewhere else. Right? We understand lots and lots of snow and incredibly cold temperatures. We Midwesterners are hardy folk.

In October, we received the expected forecasts. According to Accuweather.com Expert Long-Range Meteorologist Bob Smerbeck, "Last winter was nasty in Chicago. This winter could be just as bad."

Also in October, according to Paul Pastelok, AccuWeather.com Expert Long-Range Meteorologist and leader of the Long-Range Forecasting Team, “this winter will be similar to last year, in terms of both snow and cold. "The difference, though, is that last year, Chicago was hit with heavy snow later in the season. This year, it will be earlier." He added, "They had one big storm last year that brought their snowfall to well above average. This year, there could be several big ones."

These stories were news headlines last fall. You could hear the collective “Oh No”.(look at picture very, very closely for green shoots of daffodils)

One year ago tomorrow was the infamous “Groundhog Day Blizzard” which dumped approximately 24 inches of snow in the Chicago area accompanied by a deep freeze.

I don’t have to tell anyone what our winter weather has been like. It has snowed twice. The official snowfall total to date has been under 10 inches. The average daily temperature has been several degrees above normal. We have yet to have a sub-zero low. We have just passed what is typically the coldest two week period of most winters.

On Monday, the high temperature was 53 , it was 57 yesterday and is expected to be close to 50 today. It's been sunny, sunny, sunny. The snow that fell last week is long gone. This pattern has repeatedly been in place since Thanksgiving.

While trying to discourage my dogs from running around in our very muddy back yard this morning, I made two very exciting discoveries. I spotted some daffodils popping up in one spot and irises in another. Typically this doesn’t occur until late February or early March.

It doesn’t really matter what happens from this point forward. We’ve passed January (Junuary) and we’re into Febuary (Febuly) and even if we see an extreme reversal in weather patterns, which doesn’t seem likely, it will soon be April and the risk of snow and cold will be over.

Of course, spring in Chicago is another issue...but let’s cross that bridge when we come to it.