Will Michael Jordan's Home Ever Sell?
The basketball legend's Highland Park home was listed at $29 million in February. Will the price need to go down for it to sell?
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Update 1/18/2013: Michael Jordan's house has dropped in price from $29 million to $21 million, according to NBC Chicago.
Thanks to Patch reader TJ Wheeler for the tip.
Earlier: Michael Jordan's Highland Park home has been listed at $29 million since it appeared on the market in February.
Typically, keeping the listing price constant is a surefire way to keep a home on the market. But from the home itself to the hoops you need to go through to even see it, nothing about the 2700 Point Lane is typical.
At the time Jordan's 56,000-square-foot-home was listed, the Chicago Tribune pointed out that if the home sold for "anywhere near that asking price, it would be the most expensive, publicly listed home sale in the Chicago area."
But will that sale ever happen? Almost a year later, the original listing price has not been reduced. This could indicate that the owners are not in any rush to get the property off their hands, according to Marco Home Builders & Developers owner Bill Bommarito.
"In this market, any one who refuses to lower the price of the house is basically indicating that they don't have a strong motivation to sell," Bommarito said.
According to the Highland Park resident, if a home doesn't sell after the first 90 days it's listed, that's a sign the asking price should be adjusted.
"Within 90 days if they don't lower the price, it's just going to sit," Bommarito said.
The realtors representing 2700 Point Lane did not return calls from Patch.
Highland Park resident and Coldwell Banker realtor Eve Tarm points out that the guidelines that apply to most homes may not apply to exceptional ones like those owned by internationally famous basketball giants.
"It is not just about the property, it is about the owner and property combined," Tarm said, explaining that people who visit Highland Park are always intrigued to know Michael Jordan has a home nearby. "We're talking about something extremely special."
Bommarito, who toured the house when it was undergoing construction a few years ago, acknowledges that the house is unique, to say the least.
"I got lost in there," Bommarito said. "It had a beauty salon, it had a basement that looked like it was 15 to 18 feet deep."
The builders of the home planted mature trees they had bought from homeowners in the area instead of planting younger trees available at nurseries.
"They spent monies I've never heard of," Bommarito said. "In terms of being a builder, how do you calculate the value of that type of house?"
Yet, a home with that much money poured into it might make it a harder sell, not an easier one. In the past year, only three single family homes sold for over $5 million dollars in the Chicago metropolitan area, according to Tarm, who got the information from Midwest Real Estate Data. The homes that sold were on the market for an average of 781 days, and their last listing price was 89 percent of the original.
There are currently 57 single family homes on the market in the Chicago metropolitan area priced over $5 million dollars, according to Tarm, who adds that if these homes continue to sell at the same rate they've sold over the past year, it would take 228 months to sell them all.
"In other words, there is 19 years worth of inventory," Tarm said.
In comparison, there are 231 homes on the market in Highland Park of any price. Over the past year, 340 homes sold. At that rate, it would take less than a year for all of these homes to sell.
Though those numbers are compelling, Tarm cautions drawing any conclusions about whether or not Michael Jordan's house will sell, and at what cost.
"Statistics are good for setting expectations, but they don't mean more than that," Tarm said.
She pointed out that the statistics especially don't mean as much for homes like Jordan's that are in a league of their own.
"It can take time, but it can sell tomorrow," Tarm said. "It only takes one person."
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In This article
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Bill Bommarito
Joined Patch Wednesday, February 16, 2011 -
Eve Tarm
Joined Patch Tuesday, May 1, 2012 -
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TJ Wheeler
Joined Patch Monday, March 5, 2012
william brown
6:40 am on Friday, December 21, 2012
Who would want to live in pumpkin center
Bad location
Zuzu
9:08 am on Friday, December 21, 2012
Who would want to live next door to Ace Hardware....for $29 million???? For that kind of money, I would expect one to secure a secluded wooden spot along the lakefront, not along high-traffic Rt. 22.
william brown
9:41 am on Friday, December 21, 2012
Nice spot for low income housing
Evan Kane
9:53 am on Friday, December 21, 2012
It is a sad commentary on the state of the industry when a real estate agent says "statistics are good for setting expectations, but they don't mean more than that." To believe such a thing indicates a complete lack of understanding of the predictive power of applied statistics. Given the statistical illiteracy of most real estate agents I guess I should not find this surprising, but it is still disappoint to encounter.
It’s easy to sell a house, just price it low enough to were most buyers feel they can’t get more features for less money by continuing their search. This is a sure fire strategy to sell quickly, though the probability is very low that the seller will maximize the return on investment. Getting the most money the market will bear out for a property and doing it in a time that meets the needs of the seller is more difficult; when properly interpreted, statistics is an extremely effective tool for accomplishing this task. (Continued)
Evan Kane
9:53 am on Friday, December 21, 2012
What makes statistics in real estate so powerful (when understood and used correctly) is its ability to quantify uncertainty and make it precise. This allows a real estate agent to make categorical statements, with complete assurance, regarding the level of uncertainty. This knowledge can then be used by the sellers to make the rational, informed decisions that lead to a home sale. (Read How to Sell a House in Five Easy Steps at www.realtyscientist.com/science)
But one should be cautious of false prophets. Average market time, list price to sale price ratio and years’ worth of inventory (sometimes called absorption rate) mentioned by the agent in the article have no predictive value. When a real estate agent starts banding about these terms run away, you know you are dealing with someone who does not understand data analysis, probability or statistical inference.
Walter White
2:22 pm on Friday, December 21, 2012
Wow I bet you were just waiting for this article so you could hit us with your advertisements.
Evan Kane
2:29 pm on Friday, December 21, 2012
Hi Walter,
Sorry you didn't find any value in my post.
Best,
Evan
Zuzu
6:30 pm on Friday, December 21, 2012
The only thing I saw in your posts was: "Blah, blah, blah, blah visitmywebsite blah,blah,blahbity blah blah blah."
Evan Kane
8:47 pm on Friday, December 21, 2012
Zuzu,
I totally understand. Once I took a physics class that was way above my head and all I heard was blah, blah, blah, blah. It was kind of like being in a Charlie Brown cartoon. Sorry I went above your head. ;)
Walter White
11:28 pm on Friday, December 21, 2012
Nah I just have a nose that is sensitive to bullshit.
Evan Kane
9:05 am on Saturday, December 22, 2012
Walter, I don't doubt your olfactory powers of detection in the least! I have no doubt you are the Frank Abagnale of Patch!
But seriously, if you tell me what parts of my post you didn't understand I would be happy to explain it differently for you. :)
TJ Wheeler
12:37 pm on Friday, December 21, 2012
Someone throw in an offer for $23-mil plus some memorabilia.... maybe it'll sell.
Moe @ the Buck
3:25 pm on Friday, December 21, 2012
Oh Walter, old friend, were have you been? The Patch is not the same without You. Happy Holidays.
jim
4:12 pm on Saturday, December 22, 2012
The price will be lower. Some will buy and tear down and build a brothel
Benny G.
4:44 pm on Saturday, December 22, 2012
Evan, your statement that "This allows a real estate agent to make categorical statements, with complete assurance, regarding the level of uncertainty," basically means it may sell or it may not sell. Pretty funny.
The best way to sell is to not care. Rest assured, MJ does not care. That's why the price has remained firm. Some sucker will but it...Everything eventually does sell....just a matter of time. In this case, much time.
Evan Kane
6:19 pm on Saturday, December 22, 2012
Hi Benny,
Thanks for the comment. Saying that statistical analysis allows a real estate agent to make categorical statements, with complete assurance, regarding the level of uncertainty, does not meant that all that can be said is that a property will or will not sell. Let me give you an example; using a regression model I can say that a property is likely to sell for $100,000, that the forecast standard deviation is 8 and that the confidence level is 95%. This means that I can say with 95% statistical certainty that the value of the property lies between $98,000 and $108,000.
Now you are correct that a home owner might not care and choose to ignore this information, but some will use this information to help make the tough decisions that go with selling a house.
I really have little interest in this particular property, but as I said in my original post, it is distressing to hear a real estate professional completely dismiss the power of statistics and probability as a invaluable tool for home sellers.
TJ Wheeler
9:38 pm on Saturday, December 22, 2012
While you might be able to run around with statistical bullshit that appraisers use when appraising a house, or certain other factors that really not many people care about unless you are compiling data in an aggregate sense. The bottom line is that something is only worth what someone is willing to pay for it. This comes down to the question what is something worth?
Well obviously it is worth $29-mil to MJ otherwise he would not have listed it for $29-mil.
Your BS financial models do not take into account certain items that may or may not come with the house. What if there is a $4-million gold chandelier? Or what if the value to the buyer is the luxury of having indoor pools, indoor basketball courts, or even the bragging rights of saying that the house WAS Michael Jordan's house?
And I agree with Benny's comment. MJ doesn't care. It's not like he needs the money and he has no problem paying the $181k in annual property taxes, not to mention the cost of upkeep to the property.
Evan, please don't reply..... I'm sick of this statistical crap.
Evan Kane
10:29 am on Sunday, December 23, 2012
Dear Patch, this is not a reply to TJ (he is sick of statistical crap) but answers to his questions for those who like learning.
Appraisers do not typically use statistical analysis when appraising a property; this is why the standard Uniform Residential Appraisal is so horribly prone to the biases that statistical analysis attempts to minimize.
While “BS financial models” might not take into account certain property features, the whole point of a statistical model is the quantification of as many relative factors as possible. While it is highly unlikely that a chandelier would account for 14% of a home’s value (even if this personal property was included in a sale) it is possible to test the effect of high end upgrades like indoor swimming pools, indoor basketball courts, movie theaters etc.
Of course not all variation can be explained, some will be random and other variation will be caused by (the not necessarily rational) human behavior of buyers and sellers. One of the advantages of statistical analysis is that this variation will be quantified in a proper model, while it will remain unknown in a Uniform Residential Appraisal.
TJ is correct that something is worth what the next guy will pay for it. Statistical modeling can give a home seller a very good idea of what that next guy will be willing to shell out and use that information to build a sound pricing strategy.
Walter White
9:52 pm on Saturday, December 22, 2012
Sniff, sniff.
chris
7:36 am on Sunday, December 23, 2012
I feel sorry for anyone buying a house here. We finally unloaded ours.
In beautiful Islamorada Florida, property taxes are $2600 a year on a half million dollar house. It's almost the reverse in Crook County. And besides poor services and crappy weather, there's ridiculous sales tax and violent crime. No thanks. I'll take the occasional hurricane over everyday misery. The best view of Illinois is from your rearview mirror.
Harry Gio
8:56 am on Sunday, December 23, 2012
Gross... It's not even in a nice neighborhood... The other homes on the block on Michael Jordan's Point Lane in Highland Park are 1 to 2 million dollars and much nicer... Quite frankly, it looks like a HIGH SCHOOL that was converted into an "over-sized" and "inefficient" home... If anything, the house should be torn down and the lot be subdivided into smaller parcels for normal-sized homes... It's NOT on Lake Michigan, nor is it considered a "North Shore" home being WEST of Rt. 41... Anyone could buy a MUCH, MUCH, MUCH nicer home in Highland Park (the REAL Highland Park) on the lake for 10% of what Michael Jordan is asking for his home, which in fact he no longer lives in; as he has been remarried and now lives in Florida... PLUS, the property taxes on that home will be ASTRONOMICAL!!!!!!!
Harry Gio
9:00 am on Sunday, December 23, 2012
The ONLY person that would buy that home is a Lotto Jackpot winner that doesn't know the language of money, whom will eventually go broke, the taxes won't be paid, and then the property will be added to the list of vacant properties that Lake County owns.
chris
12:06 am on Monday, December 24, 2012
Illinois is an overtaxed, overrated, bureaucratic circle jerk of government lackeys and takers. Any productive entity with any sense of the future should leave now. Illinois will be reverted back to cornfields within the next decade. Unless you want your house and property to be confiscated or seized under eminent domain for state run agricultural production, you should dump it immediately.
b garrett
7:45 am on Monday, December 24, 2012
The house sounds to be exactly what a person with no taste and too much money would build....
b garrett
7:46 am on Monday, December 24, 2012
Not surprised if there is a "fire" some where down the line..."remodel accident" or something of that nature....
Benny G.
11:27 am on Tuesday, December 25, 2012
Chris's comment is a categorical certainty.
Virginia Maria Davis
12:14 pm on Tuesday, December 25, 2012
If it's for rent...... I'm homeless within a month.....
TJ Wheeler
10:58 am on Friday, January 18, 2013
price just dropped to $21mm -- must be motivated to sell.
http://www.redfin.com/IL/Highland-Park/2700-Point-Dr-60035/home/17628060
Sheldon Langer
9:18 am on Monday, January 21, 2013
You couldn't sell this house for 1/2 the current asking price. Perhaps if it was in L..A. overlooking the mountains or ocean, with the big money floating around out there in the celebrity world, you might have a chance. Jordan 's family should have remained, or perhaps, he should use it for a summer home, go escape the humid Florida summer... .
forest barbieri
5:01 pm on Monday, January 21, 2013
First of all when is the last time you worked with an outstanding real estate agent? One that knew the market, worked hard for YOU and actually went the extra distance? If you have one, send them my way:) Most are reactive and while all will have an opinion few are qualified opinions or have a valuation understanding at this level.
Next look at the location of this property. Nowhere land. The only appeal is that it was MJ's home. Ok MJ fans, start reaching under the cushions for spare change because 21 Million is a serious purchase, unless you just sold the family jet and need to reinvest. While the per Sq ft price combined with 7 acres is far from a crazy number, it is a number that would draw comparisons to other housing options around the world that could likely hold more prestige, better views (possibly:), nicer weather, easier access and dare I say it? Less than $180,000 in taxes.....Wait a MINUTE...how does a home worth between 21 - 29 million only get taxed @ $180,000. If I took my home value and divided it into MJ's and then multiplied my taxes out, I would have to pay $378,000 in taxes! Does anyone know who appealed his taxes as I want to hire that guy as my taxes should drop proportionatly to about $3,600 per year!
So how is Ferris Buellers home selling? (The agent thinks it is 2 Million, I think it is worth the dirt as a tear down). How long did Scotty Pippins stay on the market? This is going to be a tough, tough sell. Get ready for more reductions.
Walter White
5:19 pm on Monday, January 21, 2013
A real estate expert too? Your wonders never cease.
forest barbieri
7:29 pm on Monday, January 21, 2013
Walter:
Wow, you just do not like me, do you. Actually Walter, I am somewhat of an educated Real Estate person. You see, one of my businesses is a large boutique real estate company in Saint Petersburg, Russia. As a Western Investment company we have extensive holdings within the greater Saint Petersburg, Russia area.
In addition, we hold properties within Colorado, Highland Park, Downtown Chicago and the Western Suburbs with previous investments in Hawaii. So, I do believe I have an interest, experience and while I am not sure I am an expert in anything, my experience starting, aquiring, investing, managing large and small US and International Companies including Real Estate, gives me some platform to comment. Did I also mention I am a parent of two children within the school system........................
Smile and all my best
Walter White
9:29 pm on Monday, January 21, 2013
Well, after trashing the entire local real estate industry as idiots and slackers, you're one to talk.
TJ Wheeler
9:36 pm on Monday, January 21, 2013
Walter -- Forest's assessment is not that far off. And it is hard to find an agent around here who is focused on servicing their clients and not just closing deals and getting the most commission for themselves. We were lucky enough to have one outstanding agent when we bought, and she was from the city. There are many good agents too, and especially in this market the agents have to change how they operate or they will be competing with the Redfin.com's of their market operating on a customer service model and rebates in sales commissions.
forest barbieri
10:34 pm on Monday, January 21, 2013
Walter:
I did not mean to trash the entire Real Estate community as I deal frequently with several of them. I also did not call anyone an idiot or slacker. I was merely indicating the scarcity and value of a truely outstanding real estate agent. In addition, few have experience dealing with properties in the 21 - 29 Million range as there simply are not that many around.
Chezi Rafaeli in the city is a classic example of an outstanding agent. He recently sold a Chicago condo for a record $15,000,000 and is the listing agent for Trump's Penthouse. I have dealt and known Chezi for about 12 years and he is the go to person for residential real estate in the city. He has the connections, marketing and reputation of being the complete agent for buyer or seller and knows the residential market better than anyone I know downtown. Hey Michael, will trade Chezi's number for whoever appealed your property taxes number :)
forest barbieri
5:10 pm on Monday, January 21, 2013
Sorry meant the Risky Business House not FB.
Harry Gio
7:36 am on Monday, February 18, 2013
They just took 8.MM off the price tag... Hmmm... Do they think that it's a good deal or something??? GROSS!!! They are just looking for a CHUMP with money to come along and buy it... They should tear it down and subdivide the land and have a developer build small hones there... ALSO: Why would someone buy that house instead of a palatial estate ON THE LAKE that is much nicer and for much less; in the neighborhood of 4.MM....... Duh!!!
Harry Gio
7:38 am on Monday, February 18, 2013
Gross again........