High-priced and hot
Roland Casati owns two homes in Coeur d’Alene.
When he and his wife fly into town in their private jet, they stay at The Terraces, a new luxury lakeside condo development, where the units run about $5 million.
The couple also has a cabin south of town at The Club at Black Rock, purchased several years ago for more than $1 million. The cabin, a “charming and easy place to stay,” according to Casati, provides guest quarters for visiting family and friends.
Buyers like him continue to fuel demand for high-end properties in North Idaho. While subprime mortgage woes and declining investor interest have rattled the lower end of the Kootenai County housing market, sales of homes and residential lots priced at $1 million and higher appear to be holding their own.
It’s a small but resilient market.
“These people have discretionary income. They had it last year, and they’ll have it this year,” said Roger Nelson, president of Black Rock Development Inc. “They’re not as concerned about a point or two on a mortgage rate. Many pay cash.”
Nationally, 2 percent of home sales fall into the $1 million-plus range. In Kootenai County, the figure is probably 1 percent or less, said John Beutler, owner of Century 21 Beutler and Associates.
Tracking precise sales of properties priced at $1 million and up is difficult. The Coeur d’Alene Multiple Listing Service reported 33 home sales in the $1 million-plus range in 2006, and 19 so far this year. But the figures don’t include The Terraces, where just a few of the 30 units remain unsold, or inventory at Black Rock or Gozzer Ranch, which are luxury golf developments on Lake Coeur d’Alene.
Sales of residential lots aren’t included in the figures either. This year, Black Rock Development sold lake lots at Sun Up Bay for an average of $2 million. Black Rock’s sales of lots priced at $1 million or higher are currently stronger than sales of lots priced between $250,000 and $750,000, according to Nelson.
Casati and his wife bought in Coeur d’Alene after deciding that Lake Tahoe was too congested. The city is also an easy, two-hour flight by private jet from the Palm Desert area, where the couple spends about four months each year. The couple’s 8,300-square-foot condo in The Terraces comes with floor-to-ceiling retractable glass walls in the living area and master bedroom, which look out over the lake.
Other amenities include 1,000 square feet of outside deck; an entertainment center that can hold a 63-inch plasma TV; and plumbing for a bidet on the female side of his-and-her master baths. Casati makes use of a lifetime membership to the Coeur d’Alene Resort Golf Course, which came with the condo.
The Terraces unit is one of five residences the couple owns. They also have places in California, Montana and in Chicago, where Casati acquired his wealth by developing 4 million square feet of office buildings.
“My lifestyle isn’t affected by the ups and downs of the market,” Casati said. He said he’s part of a demographic of successful retirees who “rather than leaving money,” will leave houses to their heirs.
People who track luxury homes sales have marked the trend.
“Not only are the rich increasing in numbers, but they’re increasing in wealth,” said Laurie Moore-Moore, founder of the Institute for Luxury Home Marketing in Dallas. “And the wealthy worldwide are investing more of their portfolio into residential real estate.”
Second homes and vacation residences make up nearly half of the real estate portfolios of high-net-worth individuals, according to 2007 World Wealth Report. The report tracks financial and lifestyle trends among people with more than $1 million in net wealth, not counting the value of their primary residences.
Second, third or fourth homes are often purchased with cash, which removes mortgage rate considerations, the report noted. Purchasers of high-end vacation homes tend to be more motivated to find places that suit “the multi-generational needs of their families” than to buy strictly for investment, according to the report.
The typical buyer at Gozzer Ranch fits that profile, according to Andy Holloran, vice president of development for Discovery Land Co.
Gozzer Ranch’s real estate offerings range from $350,000 building lots to $4.5 million penthouses in a lakeside condo building. More than 70 pieces of real estate have sold this year at the development on Lake Coeur d’Alene’s eastern shore.
The number of transactions is down slightly from the past two years, reflecting fewer speculative buyers in the marketplace, Holloran said. But sales at Gozzer Ranch remain ahead of the company’s projections, he said.
“A lot of people are just now discovering North Idaho,” Holloran said.
Art Cunningham counts himself in that group. Last year, the Phoenix developer reserved a four-bedroom home sight unseen on the Spokane River. It was in Black Rock’s River’s Edge development in Coeur d’Alene.
“I had told them that I was coming up to see it as a courtesy, but that I probably wouldn’t buy it,” said Cunningham, 49.
Within two hours of touring the property, he’d signed all the paperwork. Cunningham said he was sold on the 90 feet of waterfront access, plus doors that opened onto a deck with stairs leading down to a boat dock. The price helped cinch the deal, too. At just under $2 million, the home was half the cost of vacation property he’d looked at in California resort towns. “And those weren’t on the water,” Cunningham said.
Last summer, he spent about six weeks in Coeur d’Alene. He frequently bumped into Arizona acquaintances. “I know of 12 people from Phoenix who have purchased in Coeur d’Alene in the last 18 months,” Cunningham said.