Mark Markarian, was excited and somewhat bemused as he waited for his unique double house in Evanston’s Ridge historic district to be put up for auction.
“There’s a tremendous market segment that appreciates older houses and architectural detail,” he said. “With a house like this, where you live is representative of who you are.”
But on this Sunday in October, not many wanted to be represented by one or both of the twin homes combined in one broad, peaked-roof, red-brick structure. The homes were designed in 1897 in a Prairie Style variant by Myron Hunt, the architect who later created the Rose Bowl in Pasadena.
In fact, there were only a couple of bidders or so, who stopped at $370,000 for one of the homes, less than the listed minimum bid of $395,000. Markarian declined the bid and took both houses off the auction board.
“That’s much less than it’s worth,” said Markarian with a pained smile as he left the auction room at the Renaissance Oak Brook Hotel. “There’s always a Plan B.”
A Plan B is an essential in marketing unusual, “personality” homes, a category that can include everything from a $38 million chief executive officer’s vacation place on Oahu to a Japanese fantasy in Northern Illinois’ Chain of Lakes region, featuring a two-story indoor waterfall.
One-of-a-kind homes tend to reflect the person who owns or builds them, as Markarian pointed out, and that means there is an inherent limit to the market. Such homes are not for mass taste, and that makes them hard to sell.
“There’s an inelastic demand,” said Steven Good, president of Chicago-based Sheldon Good & Co., one of the country’s leading real estate auction firms, which held the auction in Oak Brook. “It either fits someone perfectly, or you sell it to someone who reconfigures it to fit.”
Another house in the auction typified what Good called the “golden Jacuzzi” syndrome of limited-market trophy house.
“What happens is a guy makes a score in business or comes into a huge amount of money,” said Good. “He decides he’s going to put all the money in the world into a house, and installs a Jacuzzi with 24-carat gold handles.”
But the owner won’t get back the cost of such improvements when he decides to sell, observed Good:
“The ingredients to make the cake exceed the price for which it ultimately sells,” he said.
There were a number of such houses built in the 1980s in Northbrook, west Lake Forest, the Barrington area, Long Grove, Naperville, Palos Heights, and Orland Park, he said.
Even though it conforms to the type, gold-plated bath fixtures would be barely noticed in Jim Pielet’s playpen of a dwelling in Highland Park.
Pielet, a self-described investor who owned a scrap metal firm which he sold several years ago, put into his sprawling tri-level house a full indoor basketball court with pro-style backboards and electronic scoreboard that posts scores for “Pielet” and “Visitors.” The court covers up an indoor swimming pool that hasn’t been used for some years.
In addition, there is a two-story atrium around a tropical garden with a running stream, as well as the volcanic rock boulder that is so big Pielet had to install it first and build the rest of the house around it.
And there’s a 12-car heated garage, a kitchen with a ceiling-high stone fireplace and a master suite with a balcony overlooking the basketball court and his-and-hers bathrooms, each with its own whirlpool tub. A lower level has exercise and recreation rooms and an environmental capsule that you can lie in and experience climates from tropic rain to Chinook winds.
“There’s so many things a normal buyer wouldn’t appreciate,” said Pielet, who started building the house about 20 years ago, acting as his own general contractor and laboring two years in the construction.
Pielet, who said he’s alone in the house now that his children are grown, and getting too old for his regular basketball games with his buddies, put the house on the market about two years ago for $2 million.
“I want a maintenance-free condo,” he said.
He eventually reduced the price to $1.3 million, then chose the auction route with a minimum bid of $650,000. At the Oak Brook auction, a brief flurry of bidding concluded with a price of $775,000.
“I think it’s a good price,” said Pielet cautiously afterwards, not displaying any signs of enthusiasm. He wasn’t certain about whether to actually sell at the price, and because the auction was “with reserve,” he did not make an immediate decision.
Good has several categories for unique, hard-to-sell homes beyond the “golden Jacuzzi” type.
The Evanston double house is a problem because there’s nothing else to compare it with, he noted.
“It’s difficult to value, based on the age and unusual design. The auction is used to find the market,” he said.
Indeed, even the property’s aficianados find it a bit strange. Double houses are not uncommon in Evanston, but perhaps none is so large and so architecturally significant.
“It’s a favorite building of mine,” said Robert Bruegmann, an architectural historian at the University of Illinois at Chicago. “It’s such an incredibly handsome building but also so odd. If you build a house of that size, it’s so startling to build a double. I imagine that’s one of the problems marketing it.”
Markarian, who bought both sides of the house with the intention of opening a bed-and-breakfast inn but altered his plans due to changing personal circumstances, isn’t fazed by the oddity.
“That’s the value of it,” he said.
Good said another type of market-challenged trophy property is one in a remote location.
“You find people who can afford large houses may have reclusive personalities,” he noted.
He cited an 18,000-square-foot house in the middle of a cornfield near Kankakee that his firm may be auctioning.
“It will be a bargain for whomever buys it,” he said.
Another type of location problem involves the house that is too big for the community in which it’s located. That can happen, Good said, when someone outgrows a house but doesn’t want to move so keeps making more and more additions until it dwarfs its neighbors.
Grand houses can also become white elephants because of changing economic circumstances. The chairman of one company built a house for $38 million in Oahu as Hawaii was going through a real estate boom fueled by the surge in the Japanese economy, according to Good.
But Japan’s economy tanked in the late 1980s and early 1990s, and real estate values on the islands went through the floor. The house ultimately sold in 1995 for $12 million.
One unique property Good will be auctioning in November overlaps several categories of market problems: It is relatively remote, far swanker than most of its neighbors, packed with “golden Jacuzzi” items and there is nothing else like it around.
The property is “House of Many Waterfalls” in Johnsburg, north of McHenry, a pleasure retreat created by a now-deceased Hyatt executive who had a fondness for Japan.
The 5,000-square-foot curiosity has three indoor waterfalls including one that cascades two stories into a 12-foot-deep lagoon in a lava stone great room. The room also has ferns, bamboo trees, a stone fireplace and a sunken bar hidden in a cave beyond the waterfall.
There are five bedrooms, three with private hot tubs, and a dining room reachable only by a wooden bridge stretching over flowing water. The retreat is on two acres including 330 feet of Fox River Channel frontage, and landscaped with Oriental gardens, stocked ponds and, of course, more waterfalls.
The home recently was listed in Sotheby’s carriage trade real estate catalog for $1.3 million; then Good put it on the block with a $560,000 minimum bid and got no takers. Now the firm plans another auction with a minimum bid of $250,000.
“What’s the likelihood that someone in Johnsburg wants an authentic Japanese house?” said Good.
