Home All-Stars: America’s Most Wanted

01/01/2006

It is not exactly front-page news that the United States recently witnessed a real estate boom that has brought an unprecedented surge in home prices across the country. But attractive tax benefits and ongoing low interest rates have helped fuel even greater activity in the market for second and third homes in resort destinations. From the beaches of California and the slopes of the Rocky Mountains to the golfing communities of Arizona and Florida, here are seven hot markets that are leading the charge.

Scottsdale
For years the drill in Scottsdale, Ariz., was a familiar one: Buy a nice home on a golf course outside of town. This is no longer the case. Led by an activist city council that has encouraged widespread development in the city’s downtown, the hottest new trend is toward vertical living in one of Scottsdale’s flashy new condo towers.

A residence in Scottsdale. (Click image to enlarge)

"It’s gotten to the point that lots of people who have homes an hour away on the golf courses will buy a second home at one of the condos in downtown Scottsdale so that they can entertain and enjoy the nightlife and restaurants with ease," says Mark Himsl of Russ Lyon Realty Company.

The median home price in Scottsdale saw a significant jump from 2004 to 2005–$379,135 to $527,500–and these days, according to Himsl, the basic entry price "for anything with a little sizzle" is probably just shy of $1 million.

Residences on the market in Scottsdale through Russ Lyon Realty Company, from Top: A three-bedroom desert hideaway ($2.9 million), a seven-bedroom modern dream home ($6.25 million) and a golf course—adjacent property with mountain views ($4.2 million). (Click images to enlarge)

City officials project that at least 10,000 new residents are expected to move into downtown Scottsdale over the next five years, many of them resort-home buyers drawn by properties like the Hotel Valley Ho. Built in the 1950s, the hotel was closed for almost four years before its reopening in December. The $80 million renovations included a 37-unit condo tower where owners can enjoy 24-hour concierge service and on-site dining at Trader Vic’s, which is scheduled to reopen in spring 2006. Prices range from $600,000 to $2 million.

The "West’s Most Western Town," as Scottsdale proudly proclaims itself, will also be home to a planned 225-room W Hotel. Just a block away, the Upton offers downtown wanna-bes 10 courtyard live-work residences; luxury townhomes are scheduled for completion by fall 2006–sizes range from 1,900 to 2,400 square feet, with target prices ranging from $995,000 to $1.25 million. The Duke is an eight-unit gated community of three-level condominiums just south of the Loloma Arts District. The 1,450-square-foot, two-bedroom homes will be priced just under $500,000 and should be completed by spring 2006.Aspen
Even with an average home sale price of $2.1 million in 2005, there has been no shortage of buyers anxious to own a place that offers stunning views of Colorado’s Aspen Mountains, top-drawer skiing, fabulous shopping and dining, plus access to Aspen’s glittery, star-studded lifestyle. What is often overlooked is the fact that Aspen’s reputation is disproportionately larger than its population, which consists of about 6,000 residents. The result: a fairly tight second-home market.

A five-bedroom, 8,500-square-foot home on the market for $7 million through Aspen Land & Homes, Sotheby’s International Realty. Photograph courtesy of Aspen Land & Home. (Click image to enlarge)

"The inventory isn’t huge, but there always seems to be fabulous properties coming up for sale," says Carol Dopkin, of Carol Dopkin Real Estate.

Expect to pay about $1,000 per square foot, and more if the views are particularly stellar. For those wanting to buy close to downtown Aspen, the city’s so-called "upper east side," at the base of Red Mountain, is home to Fox Crossing, a new development of freestanding homes just a five-minute walk from the nightlife. Homes range from $3.8 million to $8.2 million and come with concierge service, parking privileges at the Little Nell Hotel and ski lockers at Aspen Mountain. Those seeking more room to roam tend to head toward Woody Creek and ranch communities like Chapparall, where homesites are larger than 35 acres and have access to state-of-the-art barns and an equestrian center.

Some of the best values, according to Dopkin, are about a 10-minute drive west of downtown Aspen, in McLain Flats or White Horse Springs, where traffic is not an issue and the slopes at Snowmass are within easy striking distance. Homes here average $5 million to $7 million, although one of the newer properties, valued at about $20 million, is a 12,000-square-foot showcase on 16 acres with a guesthouse, barn, three ponds and a waterfall.

Naples
What a difference a couple of decades makes. While the Southwest Florida resort town of Naples has always attracted its fair share of well-to-do seasonal visitors, it long lacked the critical mass and cultural oomph enjoyed across the state by Palm Beach. But with a delightful downtown chock-full of galleries and restaurants, an annual charity wine festival that surpasses the one in Napa, not to mention world-class golf courses galore, this sun-dappled destination has begun to outshine its Atlantic coast counterpart, especially when it comes to investing in resort real estate. According to the Office of Federal Housing Enterprise Oversight, the Naples-Marco Island metro area was number one in the nation for home-price appreciation during most of 2005, with its median home price of $490,000 rising about 36 percent higher than in 2004.

A residence in Naples. Photograph by Tom Harper Photography. (Click image to enlarge)

"Despite those flashy figures, I think we tend to attract a type of buyer who is not influenced by speculation buying," says Michele Harrison, president of the Naples Area Board of Realtors. "Naples has been a destination for second- and third-home buyers for many years and it has been steadily growing. It is not a blip or a bubble."

Deciding where to buy in Naples means choosing between beachfront and golf-adjacent. The most expensive real estate is in Port Royal, the tony neighborhood that was developed just south of downtown Naples after World War II, where oceanfront homes can reach the $30 million mark. The last developable parcel along prestigious Gulfshore Boulevard will soon be home to Aria, an 18-story condominium overlooking Park Shore Beach and Venetian Bay. Its 52 residences, ranging from 3,173 to 4,777 square feet, start at $1.65 million, and its 13 penthouse residences, ranging from 4,000 to 5,080 square feet, are priced up to $4.85 million.

A boat dock and glass-tiled pool are two luxe features in this $15.9 million Naples home offered by Premier Properties of Southwest Florida. Photograph by Tom Harper Photography. (Click image to enlarge)

The residential communities developed by the Bonita Bay Group have proven popular with second-home buyers, especially Mediterra, a 1,697-acre community planned for up to 950 residences and two Tom Fazio—designed courses. Coach homes in Mediterra start at $450,000 with custom homes ranging from $1.6 million to more than $7 million.Jackson Hole
Despite the connotations of confinement inherent to its name, Jackson Hole, Wyo., is actually a sprawling valley–20 miles long and 70 miles wide and dissected by the Snake River. It boasts more than 130 developments built in the last 20 years, most of them geared toward second-home buyers. But with nearly 99 percent of the contiguous land either set aside for natural preserves or owned by the state and federal government, the feel of living in wide-open spaces is still extant. And that is exactly what has fueled the market here. During 2005, the volume of home sales in Jackson Hole increased 24 percent over 2004, including a whopping 65 percent increase in sales of homes valued at $1 million, according to The Hole Report, a newsletter compiled by David Viehman of Jackson Hole Real Estate and Appraisal.

A residence in Jackson Hole. (Click image to enlarge)

While the high-end market is decidedly healthy–the median price of a new home is about $750,000 in Jackson Hole–there has been "a feeding frenzy on condos and townhouses under $500,000, and lots under $400,000," Viehman says. "For lots of people, it has been a matter of ‘I want to hurry up and buy a place in Jackson Hole, anyplace, and then look around for something a little bigger and better.’ "

Top photo: A 3,680-square-foot residence ($1.8 million) and Bottom photo: log home ($2.25 million), offered by Jackson Hole Real Estate & Appraisal. (Click images to enlarge)

Where you buy in Jackson Hole depends largely on when you expect to visit. For those who intend to come mainly for the skiing, Viehman points to property west of the Snake River and closer to Teton Village. If it is to be primarily a summer retreat, he advises something north of town, near the Jackson Hole Golf and Tennis Club and a number of high-end subdivisions that cater to those with private jets who can use the nearby airport. Showcase properties can start at about $3 million, a price that can ascend significantly if you are searching for frontage on the Snake River, where sizeable building lots start at about $10 million.

Malibu
In 2005, a two-bedroom mobile home in Malibu, Calif., sold for (gulp) $1.6 million. There were, however, some extenuating circumstances

"It sat on an ocean-view lot and, for all intents and purposes, it didn’t really look like a mobile home. It had lots of custom features like hardwood floors and a Viking stove in the kitchen," says Brian Merrick of Coldwell Banker Previews Malibu Colony. "If it had been a typical family home, it would have sold for $5 million."

Top photo: An $8.85 million home on Pacific Coast Highway and Bottom photo: a terrace in the $4.45 million Via Escondito, both through Coldwell Banker. Photography by Nick Springett Photography. (Click images to enlarge)

Still, that sale lends perspective to the Malibu home market. Buyers here are willing to eschew the sprawling estates they might purchase elsewhere in order to live in a relatively tiny place along Malibu’s choice 27-mile coastline. Here, where the typical home is only about 2,000 square feet, those who want something big and dazzling have to cobble together two or three adjacent lots, a feat not often easily accomplished in a notoriously tight market. Still, that is exactly what Oracle tycoon Larry Ellison has done over the past year or so, according to Merrick, buying nearly $200 million worth of properties in ultra-hot Carbon Beach.

One major price determinant: the width of the beach. Beaches in Malibu vary wildly in width and the choice properties are often advertised as "dry sand" beaches, meaning there is room to walk out back, even during high tides. Be that as it may, Malibu Colony, with a skinny, often nonexistent beach, remains a prime locale, mainly because of its gated, guarded access and the star power of its residents.

Off the beach, along the bluffs and hills that hover above Malibu–yep, those same hills you often see on the news during mud slide season–the entry price is in the $2 million range.

"For $2 million you get a pretty average 2,500-square-foot home, with maybe some ocean view and maybe an acre of land," says Merrick. "Anywhere else it wouldn’t be a head-turner, but hey, this is Malibu."Park City
While Utah might have lagged behind the rest of the nation in latching on to the recent real estate boom, it made up for it in 2005. This was especially true in Park City’s resort condo market, where residences priced below $1 million have appreciated more than 50 percent on average during the course of the past year.

A residence in Park City. Photograph courtesy of Lewis, Wolcott & Dornbush Real Estate. (Click image to enlarge)

"As a sector, it was undervalued for years and now it has just really begun to come into its own," says Dennis Hanlon of Lewis, Wolcott & Dornbush and former president of the Park City Board of Realtors. "The market for luxury condos has been quite strong as well, with those valued at more than a million dollars appreciating about 20 percent since 2004."

Frontier-style homes on the market through Lewis, Wolcott & Dornbush Real Estate for $2.9 million (Top and Middle photos) and $12 million (Bottom photo). Photography courtesy of Lewis, Wolcott & Dornbush Real Estate. (Click images to enlarge)

With three major ski areas located in the area–the Canyons, Deer Valley and Park City Mountain Resort–Park City offers more ski-in and ski-out properties than any other U.S. ski destination. Still, inventory is fairly tight for single-family residences at the most desirable locations, and that is reflected in the premium prices. One of the more attractive locales, the Colony, at the Canyons Resort, offers direct ski access from five- to 10-acre heavily wooded parcels priced from $1.3 million to $3 million. Homes range from $5 million to $25 million. Another new development getting plenty of attention is Red Cloud, in Deer Valley, where its one-acre lots with direct ski access and mountain views start at $2.25 million.

With virtually all of the vacant private land around Park City now developed, there has been a resurgence of interest in the city’s Old Town, according to Hanlon, especially those properties that are close to the base of Park City Mountain Resort. The signature "mountain contemporary" style homes in Old Town start at about $1.2 million. That will not include direct ski access, but the mountain views, says Hanlon, are "absolutely awesome."

Sun Valley
The trend of buying smaller in-town as opposed to buying large on the outskirts has also landed in Sun Valley. "The allure of owning your own private Idaho seems to have passed," says Jim Figge, president of the Sawtooth Board of Realtors. "In the 1980s and 1990s there was an exodus south toward Hailey and away from Ketchum. But more and more, what we are seeing is people wanting to get closer to the conveniences of town."

As a result, condos and townhomes around Ketchum (coined Mid-Valley by locals), which sold for an average price of about $534,095 in 2005, are a particularly hot commodity and have soared in value compared to single-family residences, which average around $1.45 million.

River Front Mountain Lodge, a recently sold property that was on the market for $9.5 million with Sun Valley Associates. Photography by Tom Kubin Photography. (Click images to enlarge)

The most desirable neighborhoods offer mountain views and, if not direct frontage, then at least proximity to the Big Wood River. But inventory in such neighborhoods is tight, and vacant lots can be found in only a few places, like Northwood, Beaver Springs and Adam’s Gulch. The Sun Valley lodge-style home, with its log structure, great rooms and open dining and kitchen areas, remains far and away the most popular architectural style.

One of the more popular locales for second-home buyers, according to Figge, is the Lane Ranch neighborhood, where lots are about half an acre and spectacular homes can be had for about $2.5 million.