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Southern Maryland Real Estate

By Tony McMahon | Agent in 20601
  • For Luxury Real-Estate, the 'Year of Capitulation'

    Posted Under: Market Conditions, Home Selling, Celebrity Homes  |  August 3, 2012 8:36 PM  |  771 views  |  No comments

    By Robert Frank 

    Even the rich aren't immune to the pressures of the housing market.

    Prices for homes priced at $1 million or more have fallen a 20 percent this year, according to RealtyTrac. The average sale price for top-tier real estate has fallen to just over $2 million, from $2.5 million in 2011.

    Those prices cuts stand in stark contrast to the broader housing market, which is seeing early signs of price stability and even price increases for the first time in years.

    All that price-chopping at the top, however, has sparked a wave of sales as buyers scoop up deals and sellers accept the new reality of lower prices.

    The number of transactions for homes priced at $1 million or more has jumped 18 percent this year, one of the strongest increases since 2008, according to Realtytrac.

    Brokers for luxury real estate are already calling 2012 the "The Year of Capitulation" for wealthy sellers.

    "I think sellers are now resigned to today's prices and what's actually selling," said Paul Boomsma of the Luxury Portfolio, a marketing group for luxury homes. " People who are serious about selling are ready to make a deal now, where maybe they weren't a year ago."

    There are several factors behind the price drops. The high end of the market didn't fall as much or as early as the broader market, since there weren't as many distressed sellers that were forced to sell. Those wealthier sellers have hung on to their properties, waiting for prices to approach 2008 levels.

    Now that they see that the prices of 2008 aren't likely to return anytime soon, many are deciding to drop their prices just to get a deal. The increase in sales has itself spurred sales, as wealthy sellers see a larger number homes in their neighborhoods trading at lower prices.

    "There is now a critical mass of data so sellers can say, 'Well, this is the new reality,'" Boomsma said.

    Of course, bargains are all relative in the mega-mansion market. And homes priced at $1 million or more represent a tiny slice of the overall market, with high concentrations in New York and California.

    Yet some mega-mansions have seen price cuts of 30 percent or more in recent months.

    A private beachfront-compound in Carpinteria Calif., has sliced $7.2 million from its price tag and is now being offered for $14.9 million, according to Luxury Portfolio. The property includes a six-bedroom main house, guest villa, tennis court, swimming pool, spa and 95 feet of beach frontage.

    A historic estate in the horse country of Bedford, N.Y. has been reduced by $3.5 million. The estate was built for the Harriman family in the early 1900s and features an equestrian center and 100 acres of gardens, ponds and rolling hills. The new sale price: $26.5 million.

    South Florida has seen a huge boost in luxury home sales driven by buyers from Latin America. But prices are falling there as well. An oceanfront palace in Delray Beach, with 15,000 square feet of living space, has been reduced by $4.4 million and is now available for $19.5 million.

    "These sellers are capitulating," said Daren Blumquist, vice president of RealtyTrac. "They are pricing to get these properties sold."

    Blumquist said many sellers may also be motivated to do a deal this year in anticipation of possible tax changes in 2012. If the Bush tax cuts expire, capital gains rates could rise from 15 percent to more than 20 percent. That added tax bill can grow to the millions of dollars when selling a mega-mansion.

    "Election years bring uncertainty, so they might want to close a deal now," he said.

    Link To Article
    http://finance.yahoo.com/news/luxury-real-estate-capitulation-185716026.html 

    Personal Website
    http://tmcmahon.exitlandmark.com/ 

  • Billionaire Paid Double Mansion's Worth, Assessor Says

    Posted Under: Market Conditions, Home Buying, Celebrity Homes  |  July 7, 2012 5:58 AM  |  788 views  |  1 comment

    By Morgan Brennan | Forbes.com 

    Last year tech billionaire Yuri Milner dashed sales records in California when he paid an astounding$100 million for a Silicon Valley mansion.

    A year later, the tax man disagrees with its worth. On Tuesday the Santa Clara County assessor told the Mercury News that the estate, known as Palo Alto Loire Chateau, is worth markedly less than Milner paid for it: $50.27 million, to be exact. It means Milner, an investor in Facebook and Groupon, shelled out 100% more than the estate is arguably worth by market standards.

    “For whatever reason, and we don’t know, Mr. Milner purchased the property at more than its fair market value,” explains Larry Stone, Santa Clara County assessor. “It doesn’t happen very often and we knew at the time that it was unusual…since the highest assessed residential property in Silicon Valley prior to that time was $28.5 million.”

     

    Stone’s team compared the home, located in Los Altos Hills, to 11 other ultra luxury mansions throughout California’s most expensive ZIP codes. They found that comparable properties sold for less, from the 30,000-square-foot Los Altos Hills home that fetched $28.5 million to the 56,500-square foot Holmby Hills Spelling Manor that ultimately commanded $85 million last year. The office also dispatched three appraisers to make independent assessments of Milner’s 17-acre, 25,000-square-foot abode.


    Click here to see photos of Yuri Milner's $100 million mansion



    The assessment means the Russian venture capitalist will pay $600,000 a year in taxes — a bill that could buy three homes in other parts of the U.S. at the national median price. However, the Mercury News asserts that the assessment still represents “a big property tax break for Milner,” as the bill would have been more like $1.2 million if it had matched the sales price.

    Still, $600,000 represents quite a revenue boon for the county: at the time of Milner’s purchase, the assessed value had been $25.7 million, according to Santa Clara County assessor records, and the tax bill $304,000 per year. It means taxes are almost doubling.

    As is the case with less expensive homes, sales price typically serves as the fair market value number. But it’s important to note that in the world of trophy real estate, fair market value and sales price are not the same thing. Since price at the ultra high-end is glaringly subjective to both seller’s and buyer’s personal tastes rather than pocketbooks, it’s not uncommon to see expensive homes fetch more than their “market value.” It means affluent homeowners sometimes enjoy taxes affiliated with a lower value than they might command for the home if they decide to sell. For example, the 2011 tax assessment on the Spelling Manor is $66.3 million even though it sold for $85 million, according to the L.A. County Assessor’s office. Even so, a $50 million discrepancy is surprising.

    “Our job is to figure out, if it was listed on the open market –which this was not, what would other buyers have been willing to pay for it?” says David Ginsborg, Stone’s Deputy. “Our conclusion was there was no way anyone would have paid $100 million.”

    Nestled among 17 hilltop acres in Los Altos Hills, Calif., the French chateau-style mansion encompasses 25,545 square feet of living space including 14 bathrooms, two dining rooms, a ballroom, a library and staff quarters. Outrageous amenities include a home theater, a wine cellar, a gym, an indoor pool, and a sauna. There’s also a 4,600-square foot guest house and two three-car garages, even a private car wash. The chateau traded hands in “turn-key” condition, meaning move-in-ready. Rumor has it that Milner, whose primary residence is located in Moscow, hasn’t even occupied it yet.

    “It’s like artwork: When some people want something badly enough, they will pay what they believe they have to pay to get it,” adds Stone. Indeed, it’s not the first time a billionaire has shelled out a staggering sum and possibly overpaid for a trophy home. Even so, “He may want to have a conversation with his Realtors.”

    Link To Article
    http://realestate.yahoo.com/news/billionaire-paid-double-mansion-s-worth--assessor-says.html 

    Personal Website
    http://tmcmahon.exitlandmark.com/ 

  • Historic British mansion has 48 rooms but no toilet

    Posted Under: Celebrity Homes, Remodel & Renovate, Design & Decor  |  May 30, 2012 9:07 PM  |  1,322 views  |  No comments

    Apethorpe Hall (English Heritage)




    Fans of the British television drama "Downton Abbey" could live out the drama in a countryside estate of similar stature that has recently gone up for sale.

    Apethorpe Hall, an idyllic British manor with an astounding 48 rooms, has hit the market for what is considered a "bargain" price of 2.5 million pounds (about $3,882,500). There's just one catch: The place doesn't have a bathroom.

    The Daily Mail reports that the house was originally built between 1470 and 1480 by Sir Guy Wolston, then sold to Sir Walter Mildmay. It reportedly stayed in his family for 350 years. In more recent years, the house has been owned by the Catholic Church and Libyan millionaire Wanis Mohammed Burweila.

    Presumably whoever purchases the house, located in Northamptonshire, England, could afford to install a few modern amenities. But as with any historic location, there are bound to be certain restrictions on developing a piece of property first constructed several hundred years ago.

    Along with not having a bathroom, the house comes with a few other catches: an annual $155,300 maintenance bill and a requirement that the hall be open to the public for at least 28 days a year.

    The British government reportedly spent more than $6 million renovating the house, which had fallen into disarray over the years and was at one time "on the brink of ruin."

    Inside Apethorpe Hall (English Heritage)


    By Eric Pfeiffer | The Sideshow 

    http://news.yahoo.com/blogs/sideshow/historic-british-mansion-48-rooms-no-toilet-190730434.html 

    Personal Website
    http://tmcmahon.exitlandmark.com/ 

  • The U.S. Foreclosure Crisis, Beverly Hills-Style

    Posted Under: Market Conditions, Foreclosure, Celebrity Homes  |  February 16, 2012 6:24 AM  |  1,074 views  |  No comments

    By Tim Reid

    BEVERLY HILLS (Reuters) - The careworn house not far from Santa Monica Boulevard resembles millions of other homes that have been foreclosed on since the calamitous U.S. housing crash four years ago.

    Garbage spews from trash bags behind the property. A smashed television leans against broken furniture. A filthy toy dog lies on its side, an ear draped across its face. The garden is overgrown. The house needs a paint job.

    Yet the property on North Rexford Drive, Beverly Hills, California, is no ordinary foreclosure.

    A sprawling, Spanish-style estate, fringed by majestic pine trees and located near the boutiques of Santa Monica Boulevard, its former owners were served with a default notice in 2010; they were $205,000 behind in their payments on mortgages totaling $6.9 million.

    Welcome to foreclosure Beverly Hills-style.

    Some 180 houses in Beverly Hills, the storied Los Angeles enclave rich with Hollywood stars and music moguls, have been foreclosed on by lenders, scheduled for auction, or served with a default notice, the highest level since the 2008 financial crash, according to a Reuters analysis of figures compiled by RealtyTrac, which tracks foreclosures nationwide.

    As in the default-ravaged suburban subdivisions of Phoenix, Arizona, and Tampa, Florida, plunging real estate prices are the root of the problem in Beverly Hills.

    But the dynamics of the residential real estate collapse are very different in elite neighborhoods such as this. The majority of delinquent homeowners here owe more than $1 million. Many are walking away not because they can't pay, but because they judge it would be foolish to keep doing so.

    "It's a business decision, not an emotional one which it is for normal people," said Deborah Bremner, owner of the Bremner Group at Coldwell Banker, which specializes in high-end properties in the Los Angeles area. "I go to cocktail parties and all people are talking about is whether it is time to walk away, although they will never be quoted in the real world."

    She said she had seen in Beverly Hills a big increase in "strategic defaults," in which owners who can still afford to make their monthly mortgage payment choose not to because the property is now worth so much less than the giant loan used to buy it during the housing bubble.

    Strategic default is an especially appealing option in California, one of only a handful of U.S. states where primary mortgages made by banks are "non-recourse" loans. That means the loan is secured solely by the property, and banks cannot go after a delinquent owner's wages or other assets if they default.

    Bremner said she helped a client buy a Beverly Hills mansion last year that the prior owner had bought for over $4 million. He decided to stop paying his $3 million mortgage - even though he could easily afford it - when the value of the property had dropped to $2.5 million.

    "They were able to comfortably cover the loan," Bremner said. "They were just no longer willing to see the value of the property drop."

    A huge "shadow inventory" is building of elite homes that are in default but have not been put on the market. Of the 180 distressed properties in Beverly Hills, only 12 are up for sale.

    The backlog reflects the pent-up flood of foreclosed properties of all price ranges that are expected to hit the U.S. market this year, especially after five major banks reached a $25 billion settlement last week with the U.S. over fraudulent foreclosure practices.

    DEFAULTS ON "JUMBO' LOANS SOARING

    Across the United States, the largest increase in foreclosures and delinquencies, compared with 2008 levels, is with "jumbo" mortgages - loans too large to be insured by Fannie Mae and Freddie Mac, the government controlled mortgage finance providers. Foreclosures on jumbo loans are up 579 percent since 2008, greater than any other form of loan, according to a report last month by Lender Processing Services, Inc.

    Strategic defaults are now more likely among jumbo loan-holders than any other type of borrower, according to a report issued late last year by JPMorgan Chase & Co. Nearly 40 percent of delinquencies among non-governmental mortgages, which are mostly jumbo loans, are strategic defaults, the report said.

    "Now that these homeowners with jumbo loans are finding out you can do this, more and more are doing strategic foreclosures," said Jon Maddux the CEO of YouWalkAway.com, which advises homeowners who are "underwater," the term for those whose loans exceed the value of their home.

    Nathaniel J. Friedman, a Beverly Hills lawyer, insists he is not a strategic defaulter - that he never missed a mortgage payment in his life. But he stopped making payments on his five-bedroom, six-bathroom Beverly Hills house on Schuyler Road three years ago.

    Friedman, who had mortgages totaling $3 million with the now-defunct Countrywide Home Loans, returned home one evening in January 2009 to find a letter from Countrywide freezing his $150,000 line of credit, which was linked to his second $900,000 loan. His primary loan was $2.1 million. The property is worth about $2 million today.

    Friedman says he decided to stop paying out of a sense of vengeance from the moment he received that letter. He has been in negotiations for months with Bank of America, which took over Countrywide after its collapse, to modify the loan.

    "I thought to hell with it," he told Reuters. "Why should I keep feeding a dead horse if the bank has no confidence in me?"

    "I was able to maneuver things my way because of the inertia of the banking sector," Friedman said. He believes the bank will blink first, and eventually modify his loan.

  • Living Very Large

    Posted Under: Market Conditions, Home Buying, Celebrity Homes  |  February 13, 2012 11:30 AM  |  1,107 views  |  No comments

    By Juliet Chung

    The latest project of Hyatt hotel heir Anthony Pritzker is a 49,300-square-foot building designed by an architecture firm in Paris. It involves a small army of specialized consultants and boasts amenities like a bowling alley, hairdressing area and gym.

    The project, in the hills above Los Angeles, isn't a luxury hotel—it's a private home for Mr. Pritzker and his family.

    The Anthony Pritzker home in Los Angeles. --Mark Holtzman for The Wall Street JournalFour years into the housing downturn, what little new-home construction remains is focused on downsized living. According to the Census Bureau, the average size of a newly completed single-family home peaked in 2007 at 2,521 square feet, capping nearly three decades of growth, falling to 2,392 square feet in 2010.



    Then there are the exceptions, a small cadre of homeowners who are currently building mansions that are 10 times that size. Interviews with the small pool of luxury builders who handle such projects, and a perusal of permits in wealthy areas including parts of Connecticut and California, suggests that for some of the mega-wealthy, big is back.

    In the fall of 2008, clients were saying, "It's not the right time to do the big house on the hill," says contractor John Sebastian, president of Dallas-based Sebastian Construction Group, whose current roster of projects in Dallas and Los Angeles spans 13,000 to 24,000 square feet. As those sentiments dried up, business has picked up, he says.

    Hedge-fund manager Cliff Asness is building a 25,900-square-foot, Colonial-style home with an indoor swimming pool and tennis court in Greenwich, Conn., according to permits and other town records. Nearby, a 31,500-square-foot mansion is being built for Lee Weinstein, founder of data-center concern Xand, with 15 bathrooms (plus additional powder rooms), a 2,500-square-foot master suite and a basement with a theater, wine cellar, juice bar, dance studio and sauna, records show. Twenty miles away, in Westport, Conn., Melissa and Doug Bernstein, whose Melissa & Doug company makes educational children's toys, are creating a compound of more than 30,000 square feet with a stand-alone ice-cream parlor, plans show. The main house alone is 29,500 square feet and includes a gym partially covered by glass; there's also a guest cottage, pool cabana and rec-room-and-garage building. The property also has a pool, tennis court and playground. The town deemed the home complete last summer; the tax assessor in 2010 valued the property at $19.8 million.

    In Silicon Valley, Jim Ellis, who co-founded a cellphone insurance provider, and his wife, Jenna, are building a 25,000-square-foot home on a single story. Plans show the home, which at 430 feet in length is longer than a football field, is expected to have multiple garages, including a showroom garage joined to a family room by a glass wall, allowing viewing of the car collection from inside the home.

    In Incline Village, Nev., software mogul Larry Ellison's 18,000-square-foot-plus compound under construction will have competition from a neighbor's house down the street. Plans show a more than 50,000-square-foot lakefront home, including spaces such as decks; inside the home, plans show a half-basketball court, trampoline, climbing wall and indoor tennis court with a viewing area. The owner is Gene Pretti, who heads an investment-management firm. The owners of the homes identified in this story, some of whom own their property through limited-liability companies, declined to comment or did not respond to requests for comment. 

    At this rarefied stratum, luxury builders say emotion and desire often drive demand. "You don't need that much space," says a Dallas businessman who recently completed building a 28,000-square-foot home for himself and his family. He says he and his wife planned to build a roughly 13,000-square-foot home, but their plans just kept on growing. "The architect was a really good salesman, [and] we just kept dreaming, I guess." Builders say owners are building their dream home or building for more or older children, and renovating an existing property, even extensively, might not satisfy their checklist.

    That checklist, permits and architectural plans filed with local municipalities show, can be long, and creative. Builders tick off other amenities like shooting ranges (good ventilation is key to avoid inhaling contaminants), underground tunnels (they allow easy access to other buildings on the property), underground garages (they don't obstruct views) and panic rooms. "You'd be amazed at what some creative minds come up with," says Peter McCoy, whose Los Angeles-based construction firm, Peter McCoy Construction, is building Mr. Pritzker's home. Mr. McCoy declines to discuss individual clients.


    In Los Angeles's tony Brentwood neighborhood, the 18,300-square-foot limestone home of New England Patriots quarterback Tom Brady and supermodel Gisele Bündchen is reached via bridge over a pond that separates it from the driveway, according to plans filed with the city of Los Angeles. The master suite has his-and-hers closets, both with skylights, and the master bath connects to an outdoor bath area with a saltwater plunge pool and shower; a covered walkway connects the rest of the home to a 1,590-square-foot gym with skylights over a garage. The first floor includes a playroom, service kitchen, library with terraces and a "morning bar." According to plans, the property also has a pool, spa, pool house and a playhouse.

    One obvious drawback of building big: unwanted attention. Neighbors sometimes chafe at the idea of an edifice down the street the size of the White House. Reacting to McMansions that went up in the housing boom, some communities, like Chevy Chase, Md., passed rules that regulate more strictly how big houses can grow, says John McIlwain, a senior resident fellow specializing in housing issues at the Urban Land Institute.

    Near where Mr. Pritzker's home is under construction, neighbors are up in arms over another of Mr. McCoy's projects, a roughly 70,000-square-foot compound (downsized from 85,000 square feet) awaiting permitting for Prince Abdulaziz ibn Abdullah ibn Abdulaziz Al Saud, son of the king of Saudi Arabia. The compound is on three lots and would include a main home of 42,000 square feet—part of it underground—a guest house, pool cabana, gate house and another residence of up to 20,000 square feet. The prince's lawyer, Benjamin Reznik, notes other residences in the neighborhood are super-sized and says opposition has been "fomented" by neighbor Martha Karsh, the wife of Oaktree Capital Management founder Bruce Karsh. Ms. Karsh has hired publicists to attract attention to the project, he adds. "Newt Gingrich wishes he had that campaign going," says Mr. Reznik.

    George Mihlsten, a lawyer for a community coalition and Ms. Karsh, says the coalition hired his firm and that Mr. Reznik has hired outside help too, including a community-relations firm (Mr. Reznik says that was in response to Ms. Karsh's campaign). "He likes to focus on Martha, but the truth is he and his client have created the controversy by proposing an outlandish plan and going behind the backs of the community to try to get it built," Mr. Mihlsten says in an email, likening the scope of the project to a small community shopping center. More than 1,500 residents of Benedict Canyon signed a petition expressing their opposition to the project as it was originally proposed, according to a representative of the coalition.

    The scope of these projects makes them extremely complex to construct. Finding or assembling the property can take several years, and the design and construction of a super-size project can take up to five years or more, builders say. (These days, lower labor costs in some areas can mean quicker turnaround times or better value.) Just finding parking for the 100 to 200 tradespeople that can be on-site for a big job, compared with the eight to 20 people typically working on a 4,000-square-foot home, can require planning; commandeering church parking lots is one standby.

    In addition to a general contractor, a 40,000-square-foot home construction might involve a design architect from out of town who comes up with the conceptual design; a local executive architect who deals with the builder; an owner's representative; a structural engineer; a landscape architect; a landscape attorney; an interior designer and acoustical, lighting and waterproofing consultants.

    "Every 5,000-square-foot mark, a house becomes something different," says Scott Hobbs, president of New Canaan, Conn.-based Hobbs, Inc., whose firm is building Mr. Asness's home. (Mr. Hobbs declines to discuss individual clients.) At 20,000 square feet and above, he says, a house is more akin to a commercial than a residential project, requiring industrial components that are tucked away so the home still feels inviting. Builders say golf carts for traversing estates and elaborate security systems for keeping tabs on inhabitants are part of the picture, too, at this scale.

    On a late Los Angeles afternoon last fall, up a steep and winding road in lower Benedict Canyon, a covered chain-link fence and a dense covering of trees and shrubs blocked most views of the mansion of Mr. Pritzker, part of the Chicago real-estate family and a billionaire co-founder of private-equity firm the Pritzker Group. Workers walked around the property and glimpses of windows, a staircase and materials like ladders and beams were visible. "All visitors much check in with security," a sign at the entrance to the property read.

    Plans filed with the city of Los Angeles, which deemed the mansion finished in November, provide more details. The 49,300-square-foot, two-story home surrounds a courtyard and includes a two-level basement with amenities including a game room, bowling alley, bar and media library. Above ground, there's a gym with changing rooms, his-and-hers offices, an arts-and-crafts room and a hairdressing area. Other buildings on the property, including a detached recreation room and a guest house, bring the total square footage of the compound to just over 53,000 square feet.

    The home has a large skylight, roof-mounted solar panels and a curving driveway. A lawn spreads around part of the home, with a "floating pool" and spa anchoring one end of the property.

    Critics of such mega-mansions "want to penalize people for being successful," says Mr. McCoy, the builder of the estate. Referring to the scores of people large projects employ, he adds, "People have done this all along because they could, and aren't we lucky that they can?"


  • Eccentric Home on the Shores of Lake Erie

    Posted Under: Agent2Agent, Celebrity Homes, Design & Decor  |  October 24, 2011 6:56 AM  |  1,630 views  |  1 comment
    By Laura Vecsey

    Inventor Don Brown who lived in this $19.5 million home on the shores of Lake Erie, liked to helicopter out for dinner.
    Photo: Zillow

    A wealthy inventor conceived of a home with whimsical, underground 'streets' built to scale and inspired by those he'd seen in Georgetown, Paris and Savannah. Above ground, it featured a private beach and marina sculpted into the shores of Lake Erie. And a helicopter pad.

    These are just a few of the eccentric features found in the Waterwood Estate, a fascinating Ohioproperty owned by the late Don Brown, an inventor who gave the world the drop ceiling.

    “It takes four-and-a-half hours to show this property,” said Scott Street of Sotheby’s, the listing agent for the Waterwood Estate, which is now listed on the Vermilion real estate market for $19.5 million.

    The property sits on 160 acres, boasts three-quarter miles of frontage on Lake Erie and contains a series of “pods” connected by glass corridors that were navigated by scooters and golf carts.

    The Brown's modern home was a kind of Shangri-la.
    Photo: Zillow

    When Brown and his wife, Shirley, were killed in a plane crash in 2010, their two living sons (their third son, Kevin, died in a speed boat race in 1989) decided to sell the sensationally unique property. But who might share Brown's eccentric vision?

    So far, Street said the listing has attracted a ministry group and a group of Colorado helicopter pilots have expressed interest in turning the property into a fly-in, fly-out resort (Waterwood comes with an FAA-approved helicopter pad). Then there’s a couple who, perhaps like the octogenarian Browns, wants to grow old in an amenity-laden house.

    “This was a very forward-thinking house when it was built in 1990 in terms of systems and functionality,” said Randal Darwin, vice president of CB Richard Ellis, the firm brought in to help market Waterwood.

    “It was 20 years ahead of its time because of its features and unique characteristics. Mr. Brown literally broke the mold on this house. I know he had the white brick specially fabricated for this project and when it was done, he had the molds destroyed so no one else would ever use them,” Darwin said.

    Don and Shirley Brown protected their helicopter from the elements.
    Photo: Zillow

    The Inventor and the Architect

    “They’ve got the square-footage listed wrong,” said architect Hugh Newell Jacobsen. “It’s not 38,000 square feet. It’s 60,000 square feet. The underground floor is the same size as the main floor. They forgot to count that.”

    Jacobsen would know about the true size and intricacy of the Brown estate. The world-acclaimed architect was hired by Brown to deliver the visionary design, just as Jacobsen has done for more than 400 private homes for clients that included Jackie Onassis, Meryl Streep and members of the Mellon family. But the collaboration ended when the secretive Brown fired Jacobsen.

    “We were a year-and-a-half into the project and he sacked me. I’ve never been fired before,” Jacobsen said from his Washington D.C. office, still bemused about the turn of events.

    At 81, Jacobsen has been at the forefront of American architecture for sixty years, ever since he attended Yale and apprenticed with Philip Johnson. The rich and famous are Jacobsen’s clients. He delivers uniquely landscaped structures that reference the Quaker-simple lines of the American barn, smokehouses and farmhouses. He has won many awards and published three books cataloging his work, but his first look at the Waterwood Estate came when he saw listing photos after the property was put up for sale.

    “About two months before he died, after 20 years since I’d heard from him, he called and said, ‘I guess you’d like to see the place.’ I said, yes, I’d like to see it. My homes are like my children. But then he died in the crash,” Jacobsen said.

    Jacobsen used his trademark “pod” style design to give the design more flexibility and allow it to evolve as Brown wanted other things added. The entire home is a series of 20 castle-like concrete buildings connected by glass corridors and each structure is topped with a slate pyramid.

    Marble, Glass, Polar Bears and Dobermans

    Eccentric? “There were five bars in the house, one with a full-mounted polar bear. There’s a barber shop with a pole where Don would go every morning for a shave. At one end of the house, he had cages that would open every hour on the hour and two Dobermans trained to run the perimeter of the property would run out. The next hour, another pair would take off,” Jacobsen said.

    He also used tons of sand and dirt from the lake shoreline, where cliffs were graded to build a beach and the harbor, to shape hills into the flat, Midwestern terrain. From the road, the house is not visible behind those hills. But from the lake, boaters can see the modernist white castle.

    If it sounds wild, Jacobsen disagrees.

    “No, it’s not wild. It’s your dream. This house is the house of an inventor. It has a space where, inside eight white columns, there are chairs and a couch. This floor lifts up through the ceiling to a pergola so guests can look out over the lake. The floor also goes down to the ground floor, where there’s a piano so the family can sing Christmas carols,” Jacobsen said.

    “Near the main entrance, there is a 10-by-10-foot room behind the closet. You slide the door, remove the clothes’ pole and there’s a fully decorated Christmas tree. The room had its own air filter and air conditioner to keep the dust off the ornaments. He was so embarrassed about having a fake tree he had it sprayed so that it smelled like pine needles,” he said.

    What amuses Jacobsen is that despite being fired, his plans were fully executed. Brown brought in another renowned and innovative architect, the late Hideo Sasaki.

    “Don told Sasaki, ‘Don’t change Jacobsen’s plan.’ And they didn’t change a thing. Sasaki would call and tell me,” Jacobsen said.

    The interior features ample space and lovely lake views.
    Photo: Zillow

    During his lifetime, Don Brown never allowed the property to be photographed. It was a sanctuary for his family, lacking for nothing. Now, with the house listed for sale and photographs to prove its splendid fruition, the architect who designed Don Brown’s house is curious.

    “He was building his dream, he had money and he hired me. We bought the furniture, the art, we did the landscape, then I was fired. I’d like to see it, but I’ve never paid my own airfare to see a home I built for a client,” Jacobsen said.

    And if you’re wondering whether the home has a drop ceiling, it does — in a workshop.




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  • Wealthy Use Auctions To Sell U.S. Mansions As Homes Languish On The Market

    Posted Under: Market Conditions, Home Selling, Celebrity Homes  |  August 31, 2011 6:21 AM  |  1,673 views  |  No comments
    By Nadja Brandt

    David Sandwith has been trying to unload his seven-bedroom house on Mercer Island, Washington, since 2009, listing it first for $32 million, then cutting the price to $28.8 million last year. After not receiving any acceptable offers, he’s putting it up for auction.

    “I have a growing family and I have opportunities that I want to pursue in my life, and that doesn’t necessarily mean that I will be located here in the greater Northwest,” Sandwith, 41, said in a telephone interview. “The time is right for us to sell the home.”

    Real estate auctions, long used in the sale of foreclosed properties, are becoming more popular among wealthy homeowners to drum up interest for mansions that have languished on the market after the housing crash. In exchange for a quicker sale, many sellers are accepting price cuts of 50 percent or more.

    Sandwith, a father of four who retired in 2007 after selling a family company, hired Gadsden, Alabama-based J.P. King Auction Co. to find a buyer for his 14,000-square-foot (1,300- square-meter) waterfront property. The sale, to be held today, doesn’t have an opening bid. The reserve auction will allow Sandwith to decline any offer he doesn’t deem high enough.

    Mega-Mansions

    “While our bread and butter are auctions for homes between $3 million and $8 million, calls for these mega-mansions have doubled this year,” said Caley King Newberry, a J.P. King spokeswoman. “Many didn’t have to sell when they wanted to in 2008 and 2009 because they had the holding power, but now they’ve decided it’s time to move on with their lives.”

    At a J.P. King competitor, Grand Estates Auction Co., only about 12 percent of auctions are the result of financial distress, said Stacy Kirk Reich, president of the Charlotte, North Carolina-based company. The number of buyers has risen 130 percent since 2006, she said.

    “Sellers will come to us for various reasons, maybe the death of a loved one or a divorce, but most frequently because they are reallocating wealth to other locations,” said Kirk Reich, whose company specializes in auctions of properties valued at $1.5 million to $10 million.

    The company gets an average of 276 inquiries per listing and 16 bidders per auction.

    Home-Price Decline

    Homeowners are seeking new methods for selling their properties as the U.S. economy shows signs of sputtering. The Standard & Poor’s 500 Index has declined 6.4 percent in August, poised for its fourth straight month of losses. Morgan Stanley said on Aug. 18 that the U.S. and Europe are “dangerously close” to recession. The S&P/Case-Shiller index, a gauge of home prices in 20 U.S. cities, fell 4.5 percent in June from a year earlier, according to a report today.

    The number of sales at Premiere Estates Auction Co., which sells luxury properties, rose 30 percent last year, said Anthony Fitzgerald, a broker with the Manhattan Beach, California-based company. He wouldn’t say how many homes the company sold. The gain is likely to be exceeded this year, he said.

    “The actual dollar amount of homes auctioned off has also increased by about that much,” Fitzgerald said. “It means there are more auctions but there are also more high-end auctions. I think it’s fair to say that we’ve seen a 100 percent increase in opening bid prices.”

    $22 Million

    Premiere Estates is preparing the sale of a Malibu, California, beach estate owned by William Chadwick, a managing director at investment bank Chadwick Saylor & Co. The minimum bid is $22 million. With an original listing price of $65 million in 2008, it is the highest-priced home ever to go to auction, according to Fitzgerald.

    At an open house in early August, about a dozen people at a time walked through the 10,500-square-foot, nine-and-a-half bathroom estate, which has five fireplaces, an ocean-view gym, a $1.5 million home theater with leather recliners, and a 75-foot (23-meter) lap pool on a 4,500-square-foot patio.

    The home sits on “Billionaire Beach,” a stretch of Malibu officially known as Carbon Beach, where Jeffrey Katzenberg, chief executive officer of DreamWorks Animation SKG Inc., and Paul Allen, co-founder ofMicrosoft Corp. (MSFT), also have homes.

    The home, which Chadwick built in 2005, is assessed at $6.08 million and the land at $2.45 million, according to public records. Chadwick bought the property from Pepperdine University in 2002 for $2 million, according to the Los Angeles County assessor’s office. The $22 million starting bid at the auction is based on recent sales of comparable properties in the area, Fitzgerald said.

    Relocating to Chicago

    Chadwick is selling because he wants to relocate closer to his wife’s family in Chicago, according to Carol Bird, the home’s listing agent with Westside Estate Agency. Chadwick didn’t respond to a voice mail left at his office. His company, based in Los Angeles, won’t be affected by the move, Bird said.

    Interest at the open house indicates a sale may happen before the auction, scheduled for Sept. 18, Bird said. Should it come to auction, Chadwick has the right to decline bids he doesn’t consider to be satisfactory.

    While auctions usually result in a sale -- at Grand Estates the success rate is 94 percent -- they can bring about hefty price reductions from the original listing prices.

    “Many sellers have unrealistic expectations of the worth of their homes,” said Chris Longly, a spokesman at the Overland Park, Kansas-based National Auctioneers Association.

    Half Original Listing

    Jack Gerlach, who sold his Malibu home in an auction conducted by Premiere Estates last year after it had been sitting on the market since 2008, got $2.6 million for it -- less than half the original listing price of $5.5 million.

    “During those two years my house was on the market, I was in a way at a standstill,” he said. “To use the auction process was a decision to move forward.”

    Gerlach, 32, a residential real estate developer, is in the process of building a 10,000-square-foot Mediterranean home in Malibu for his wife and himself. To move ahead with the “dream project,” which he’s planned for six years, as well as two investment properties he’s developing in the Hollywood Hills, he wanted to unload his loft-style house, which has floor-to- ceiling windows.

    His loans on the property -- which he bought for almost $1 million and spent $600,000 to renovate with features such as white marble imported from Greece -- were “significantly below” the value of the house, he said. Gerlach decided last year to auction it, which resulted in a sale in June 2010.

    Battle to Top

    “Auctions draw in a huge amount of people,” Gerlach said in a telephone interview. “You always have that dream that two people will walk in” and “battle each other to the top,” he said.

    Most auctions at Grand Estates have fetched between 80 percent to 120 percent of the tax value of properties sold during the past 18 months. Tax values are often well below the prices real estate sold for during the peak years of 2005 to 2007, said Fitzgerald of Premiere Estates.

    At Premiere, a Malibu home originally listed for $8.4 million in September 2008 and cut to $6.9 million by December 2010, sold for $5.2 million in an auction this April. An estate in Corona del Mar, California, was priced at $19 million in October of last year, reduced to $12.9 million in January and sold for $7.5 million in April. A mansion in La Jolla, California, was listed for $15 million in February 2009, lowered to $12.9 million in September 2010 and auctioned for $8 million in December.

    No Overpayments

    “Nobody is going to overpay in an auction,” said Katie Bentzen, 56, who sold her Malibu home with a view of Zuma Beach in October 2009 for $900,000, a 47 percent discount from the original listing price. “If you really want to move on with your life now, people have to be ready to get real on the price of their home.”

    For Andrew Osinski, 67, a former managing director of the global asset management division of Lehman Brothers Holdings Inc., it was time to move on after his wife’s death eight years ago and his four children left his waterfront home on Long Island Sound in Darien, Connecticut.

    “After I listed the house last year, it quickly became stale,” Osinski said. “I’ve been a trader all my life. There’s nothing worse than sitting on a stale position. I wanted to try to get out now.”

    Market Change

    He had listed the five-bedroom, seven-bathroom property -- which he bought in 1994 for $1.52 million and subsequently rebuilt -- in May of last year for $12.5 million. This June, after six weeks of promoting the auction and showing the house to potential bidders, it sold through New York-based Concierge Auctions for $8 million, the low end of a range that extended to as much as $10 million the company had suggested. Osinski had a $5 million loan on the property.

    “The market has changed,” he said. “I asked too much, as we all do. I hung on for a long time. But this is it. It’s time to move on.”

    Osinski, who is retired, is looking to buy a home in Naples, Florida, where he plans to spend most of the year, as well as a second property, a 3,000-square-foot, cottage-style house with a private dock close to Darien.

    Sandwith says he expects high bids for his Mercer Island home because “some of the highest recorded sales have been conducted through auction.”

    He bought the lot, which had an old house on it, for $5.38 million in 2004, according to King County, Washington, public records.

    “That’s a significant piece of property to commit to,” Sandwith said. “I don’t want to limit myself.”


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