When Michael Jordan’s 56,000-square-foot Highland Park mansion failed to sell at auction Monday with a minimum bid of $13 million, Estee Portnoy, Jordan’s longtime advisor, issued a statement to the press saying that “the market conditions were just not right to drive a fair value.”
They weren’t? On the same day that Jordan’s auction flopped, this home in Lincoln Park changed hands for $9.035 million, or 90 percent of its seller’s $10 million asking price. That’s the highest anyone has paid for a single-family home in the city since before the housing crash.
Also on Monday, the sale of this Lake Forest mansion closed at $5.057 million. Admittedly, that’s far below Jordan’s price point, but it’s still an upper-bracket property that went for 85 percent of the sellers’ asking price, $5.95 million. And in November, Gold Coast and Lake Bluff mansions went for 90 and 95 percent of their asking prices, respectively.
Janet Owen, the listing agent on both Monday’s record-setting $9.035 million sale and the November Gold Coast sale, said that in both cases, “the sellers were very aware of every single thing that has sold—and that hasn’t sold. We did a lot of research together and set their prices just right so that buyers would recognize that they were priced appropriately.”
At the minimum bid of $13 million, a buyer would have been paying just 62 percent of Jordan’s last open-market price, $21 million. It’s just 45 percent of his original $29 million ask.
In other words: It’s about the price. You could say that No. 23’s asking price is a load of bull.
“There are only two reasons that a property doesn’t sell at auction,” says Rick Levin, who runs a well-established Chicago-based real estate auction firm. “The property is poorly marketed or the seller has unrealistic price expectations.”
It’s very hard to put this one down to poor marketing; the auction company, New York–based Concierge Auctions got the house featured on the Today show and lit up the Internet with a separate video tour of the house and three-acre grounds. Jordan himself even spoke to the Wall Street Journal in advance of the auction, saying that “I’ve seen that this is the beginning of a trend for selling unique, one-of-a-kind homes.”
Very, very few houses get such star treatment; presumably anybody on Earth who could afford to buy this gigantic piece of Jordan memorabilia knew that it was available, and at what price. If they wanted to live like Mike, they might have opted to spend the $13 million on 650,000 bottles of Michael Jordan for Men cologne instead. Or they could have bid on the shoes Jordan wore for his famous Flu Game, beaten the highest bidder’s $104,765 and gone home with more than $12.8 million in their pockets.
“A house is only worth what a buyer is willing to pay for it,” Owen says. “So far, there haven’t been any buyers willing to pay for” Jordan’s estate.
One reason: he’s asking a lakefront price for a house that’s about three miles west of Lake Michigan. In the past year, two Winnetka mansions have sold for upwards of $12 million, or close to the minimum bid in Monday’s auction. Both homes are on Lake Michigan. A house on Jordan’s block—but much smaller at a mere 5,600 square feet and 1.8 acres—sold in January for $1.24 million.
When the auction got postponed from November 22 to December 16, Concierge Auctions issued a statement saying that it was because of high buyer interest in the home: “While many bidders are already financially qualified and registered, others requested more time to visit the property and consider the purchase. In the best interest of our client, we agreed to extend the auction date in order to allow them to do so.”
Nevertheless, on Monday the auction house was forced to admit that nobody had ponied up with the minimum. (Today, nobody from the firm has responded to my calls.) That makes two big-ticket Chicago-area homes on which Concierge Auctions has failed to close a deal—the other was a lavish Winnetka home.
Among those who are disappointed: Levin, who says, “I wanted the auction to work, because a high tide raises all ships.”