A few years ago, Jerry Kelly bought a home on tony Farwell Drive in the lakeside village of Maple Bluff. Kelly, a Maple Bluff native who struck it rich on the pro golf circuit, had lived up the road in a home a block off the lake, and he was ready to trade up.
The economy may have been tough, but he’d done well. When he bought the property in 2008, he paid the assessed value of $1.9 million — $1.4 million for the land and $540,000 for the home. He could afford it — and more.
“It was a big, old Tudor-style house,” says Kelly Green, the village’s building inspector. “It was gorgeous, and he tore it down.”
In 2010, in the midst of the housing meltdown, Kelly and his wife, Carole, replaced the quaint old Tudor with a $4.4 million mansion.
Kelly isn’t the only area homebuyer who was able to build a dream home in an economy where many others were losing theirs. Seven other folks built homes in Maple Bluff since the onset of the housing downturn in 2007, two of them in excess of $1 million.
In Westport, which has all but replaced Maple Bluff as the Gold Coast of Dane County, 26 people built homes in the same time frame, five of them north of $1 million in value. In Shorewood Hills, the other monied Lake Mendota community, 10 homes were built. Three topped the $1 million benchmark; among them, the $3.8 million home of James Berbee, former chairman and founder of Berbee Information Networks Corp.
All of this proves that for one particular sector of the economy, the mega-rich, there’s no bad time to build.
“It’s actually a pretty good time to be building a house, because nobody else is doing it,” says Jac Blasi, a local Realtor who sees his share of high-end homes. “You have builders available and materials available. There’s an element that can afford to proceed even if the bulk of the population has stepped on the brakes.”
One measure of how dynamic the highest of the high-end housing market has been is a look at the top parcels. The Cap Times printed a list of the 20 highest-assessed residential properties in 2007. Of the top 10, three have been knocked off the list by newly built homes, all worth more than $3 million. Three other new names were added to the top 20 either because the previous owner sold or because of fluctuating assessments.
Still topping the list is Daniel Rottier, one of the state’s most successful trial lawyers, who created a stir in 1996 when he purchased the historic Rennebohm mansion in Maple Bluff for $1.2 million, only to tear it down to make way for his own $3.5 million palatial English Gothic home, now assessed at just over $5 million. Kelly, whose tear-down was less controversial, is now fourth on the list.
This market — almost all of it on the shores of Lake Mendota — is unique. It’s a market for those who can afford more than $1 million for a parcel of land that shields their homes from the view of passersby on the street, and still commands a stunning view of the lake. If you want to buy, you’re going to have to bid high.
But high-end off-water properties aren’t seeing similar demand.
“There’s a handful of homes that are north of $2 million that have been for sale in some cases multiple years just waiting for the right buyer,” Blasi says. “It’s not a liquid asset at that point.”
For those with more modest residences, the market’s much brighter.
“With the economic downturn, for about a six-year period people were afraid to even pull the trigger on those,” Blasi says of homes in the range of $1 million. “And now, just in the last two weeks, I’ve sold three $1 million homes, and one of them got four offers, and sold on a cash basis.”
A lot of those $1 million homes are located in the town of Middleton, which offers a rural feel and a quick commute to the city.
David Shaw, town of Middleton administrator, says there’s not a lot of new development going on, but a new 21-home project near Kempfer and Cherrywood lanes may be ready for the market in the fall. And those lots aren’t likely to be cheap.
“I’m going to guess that they’re probably going to be $100,000 lots,” Shaw says. “And if that’s the case, you’re not going to put a $200,000 or $150,000 house on a $100,000 lot.”
Blasi says these types of homes are getting snapped up by a diverse group of homeowners. Many of them are young professionals, often connected with biotech companies. But there’s one group that stands out.
“Doctors tend to be pretty good candidates,” he says. “If you were going to narrow it down to a profession, it might be sophisticated docs.”
Blasi has a unique window into the upscale market — he’s been in the real estate game for decades and he’s now in a position to get the big fish, some of them upwards of $2 million.
“For us, to get to work in that stratosphere, it takes years of earning our stripes,” he says. “I’ve been doing this for 27 years. In the first 10 of those no one was hurling their multimillion-dollar homes at me to work with.”
Now they are. Blasi managed to turn over a few during the downturn, but it wasn’t always easy.
“I sold one for $1.5 million about a year and a half ago in Spring Green,” he says. “But the owner had nearly $4 million in it. So that was a sign of the times.”
With the economy improving, he says, a lot of the money that has been on the “sidelines” is starting to find its way into the upscale housing market. Noting that most of the home market news that finds its way into the media reflects what happened weeks in the past, his more timely perspective from the golden trenches suggests that we might soon see more people willing to shell out millions for their dream homes.
“I’m seeing more and more people more interested in taking a risk and making and investment and spending money than I have in the last half-dozen years,” he says. ￼