Travis Neighbor Ward

First Published in Departures magazine, March/April 2001.

Copyright 2001 Travis Neighbor Ward.

Looking For That Perfect Getaway? Say, An Oceanfront In Palm Beach Or A Ranch In Montana? Travis Neighbor Ward Reports On What $3 Million Buys Around The Country.

With the rapid increase in wealth over recent years, it's no surprise that many people have shuffled millions of dollars from the stock market into luxury vacation homes. What is surprising is how much the prices on those homes have increased, and just how few of them are now for sale. "In the past five years alone, $8.5 trillion in stock market wealth has been created," says Professor Karl E. Case, an economist at Case Shiller Weiss Inc. of Cambridge, Massachusetts, and author of The Wall Street Journal's quarterly Home Price Forecast. "A lot of that money is in the hands of the high-income folks. There's great demand for luxury homes, and not much space left." Judi Desiderio, a partner at Cook Pony Farm Real Estate in Bridgehampton, New York, which often caters to Wall Street millionaires, has seen the effect firsthand. She says that in her area, luxury home prices have practically doubled in the past two years alone: "There's been a quantum leap in the number of people buying in the $3 million-plus price category. But the inventory level is so low today that prices are skyrocketing." Judging from our discussions with high-end brokers across the U.S., that is true in the most expensive vacation-home areas coast to coast.

But that's not to say that there's nothing left, or that people have stopped looking. Instead, they've simply become more lenient as to what they expect to get for their money. And that is where one word makes a world of difference: location, location, location. Nowhere is this more apparent than when you compare the amount of acreage that comes with the homes. In Palm Beach, Florida, and downtown Aspen, where space is at a premium, $3 million homes come with less than a quarter of an acre. In Jackson Hole, Wyoming, and Big Sky, Montana, anything from five to 60 acres is considered normal. Then there are places like Lake Tahoe, which seem to question just how far buyers are willing to go. At presstime, on the Nevada side of the lake the least expensive home on the market was a 300-square-foot "teardown cabin" on a 50-by-130-square-foot parcel-for $1.6 million.

Of course, details such as great beaches versus ski slopes play a large role in the decision-making process. So here's the lowdown on who's buying homes in these areas, what they're paying, the best neighborhoods to go house-shopping in, and what $2.5 to $3 million will really get you.

JACKSON HOLE, WYOMING

Main Attractions An easy lifestyle in a gorgeous natural setting, plus top-of-the-line golf courses, skiing and fishing, in addition to great restaurants and a symphony orchestra.

Availability and Prices "There has not been a huge surge in prices in recent years," says Bland Hoke of Jackson Hole Realty. "What sells for $3 million today sold for $2 million five years ago. Instead, our biggest problem is supply. People just aren't selling because they don't want to leave the area. And only two percent of the land here, or 75,000 acres, is under private ownership; the rest falls under conservation easements, which prohibit development. So buyers are paying within two to three percent of asking prices." At presstime there were 12 listings in the $2.75 to $3.2 million bracket.

Who's Buying Internet millionaires, Wall Street brokers, retirees-all paying in cash. There are direct flights from Dallas, Chicago, Denver, and Salt Lake City, which is an hour away by plane. "But most buyers are from the East or West Coast," says Hoke, "many of whom have started spending nine months of the year here and running their businesses from their home."

Prime Locations Snake River cuts down the center of the valley. The most sought after area is the west bank, and, after that, areas east of the river and north of town. Maximum prices in these areas can reach $40 million. Houses in Teton Village, which is the top skiing village, tend to cost between $2 and $3 million.

What You Can Expect for $3 Million A lot of land. In the past, zoning required that parcels comprise at least three to six acres. Newer homes on the golf courses (Teton Pines Resort, an Arnold Palmer course, and Jackson Hole Golf and Tennis Club, designed by Robert Trent Jones, both among the top ten courses in the country) tend to include one acre. All houses in this price range are freestanding, single-family homes no higher than 30 feet, or two stories. The largest is about 8,000 square feet. You can also expect top interior finishes (imported tiles and granite countertops, whirlpool baths, high-end kitchen appliances).

What You Won't Find for $3 Million Private swimming pools and tennis courts.


PALM BEACH, FLORIDA

Main Attractions The oceanfront location and a highly affluent, exclusive community of year-round residents.

Availability and Prices Renee L. Harris, of Sotheby's International Realty in Palm Beach, says that today there is less supply and more demand than in recent years, and that prices are much higher-a $3 million home today sold for $2 million three years ago. However, the real estate market here includes houses, townhouses, and apartments, which increases inventory overall. At presstime, Sotheby's International Realty had six listings in the $2.7 to $3.2 million range.

Who's Buying Younger Wall Street millionaires, families with young children, and older couples.

Prime Locations Palm Beach is seven miles long and half a mile wide, bordered on one side by
ocean and on the other by the Intracoastal Lake. Houses that have water frontage, especially on Ocean Boulevard, are considered premier, as are properties in the estate section on the southern part of Palm Beach, particularly on Worth Avenue South. "This was the original Palm Beach," says Harris. "The houses are older and very attractive, and the properties are larger."

What You Can Expect for $3 Million A swimming pool; top interior finishes; a security system; home automation to coordinate things such as lighting and watering of grounds; sometimes fireplaces. Townhouses tend to be located right in town, are newer, and have larger rooms, which is why they often attract empty nesters. There are very few brand-new apartments, so most apartment buyers, mostly in their late thirties and forties, gut and remodel them.

What You Won’t Find for $3 Million Land. Most lots are under a quarter of an acre, plus there are strict zoning rules, which call for an average of 35-foot front setbacks. And private tennis courts are rare.


LAKE TAHOE, NEVADA AND CALIFORNIA

Main Attractions Beaches, hiking, skiing, and proximity to San Francisco (three and a half hours by car).

Availability and Prices "You can find $3 million homes on both the California and Nevada sides of the lake," says Shari Chase of Chase International Distinctive Properties in Zephyr Cove, which is on Lake Tahoe. "But right now $2 million buys you a fixer-upper. Even a $6 million home could be a teardown. It's so expensive because there's no growth or subdividing allowed. The land is very protected through environmental agencies. Five years ago we had much more to offer. Prices have always been high, but recently they've exploded."

What cost $2 million five years ago now costs $5 million. Houses in Incline Village start out at $6 million. "We have sold the highest-priced lakefront properties in the nation there, including one home that was offered at $60 million," Chase says. "In Incline Village we recently sold a lakefront home, which was built in the 1930s, for just over six million."

Who's Buying Mainly people from northern California, particularly Silicon Valley and San Francisco, who tend to pay in cash.

Prime Locations Lakefront properties are the most prestigious, followed by lakeview properties, which give you almost double the house size. On the California side, which includes two thirds of the lake, $3 million will typically get you a 3,500-squarefoot house with 100 feet of water frontage on a plot of less than half an acre. The west shore is where the old San Francisco families built their homes, and Rubicon Bay is where many estates lie. On the Nevada side, prices are higher because there's been less development and inventory is even lower. Glenbrook is one of the most prestigious areas, and the east shore toward Zephyr Cove has many understated, older estates. Incline Village, Chase says, "is where newer money often buys."

What You Can Expect for $3 Million Newer properties (on the Nevada side most are newer) include marble baths; granite countertops and top kitchen appliances; a security system; extensive telephone systems; home gyms, and home offices. Lakefront houses often have a beach, pier, or buoy.

What You Won’t Find for $3 Million Private swimming pools and tennis courts.


ASPEN, COLORADO

Main Attractions Excellent skiing and hiking, temperate summer weather, and a small-town atmosphere.

Availability and Prices "Three million dollars is getting to be the lower end here these days," says Jane Moy of Aspen's Coldwell Banker The Aspen Brokers, Ltd. "A well-designed house in town that's a good size and includes really good materials starts at five million dollars." In 2000, the average price of single-family houses was in excess of $3.7 million, she notes-an increase of $1.2 million from the previous year. But there aren't many houses to be had for $3 million-at presstime there were only two such listings. (The majority of the company's properties, numbering about 100, are listed at more than $3 million.)

Pitkin County, which includes both Aspen and Snowmass Village, has permitted less than three percent growth in the last 20 years. Because buyers prefer new construction, which tends to be built to higher standards and with more exotic materials, and because there isn't a great deal of land that can be subdivided, people are buying up older homes on the best land, having them torn down, and starting over from scratch. "In the West End, where the Aspen Music Festival is held each year, a 6,000- to 9,000square-foot lot with no house on it goes for $2 million," Moy notes.

Who's Buying Mainly people based in California, Chicago, Texas, Michigan, the Midwest, New York, and Boston.

Prime Locations The West End of Aspen, where silver barons originally built their homes. It's in the flat part of the valley, there is lots of sun, and it's especially popular with families. In Snowmass Village, horse "farms" with more than an acre can be found. Those looking for larger lots, say five acres, head to the subdivisions of Starwood or White Horse Springs, or to areas lying to the east and west of Aspen.

What You Can Expect for $3 Million In newer construction, and in older houses that have been remodeled, common features include hardwood floors, top-of-the-line European kitchen fixtures, granite countertops, whirlpool baths, steam showers, a security system, and a combination of radiant and forced-air heating.

What You Won’t Find for $3 Million Interior space. Because houses in Aspen may not exceed 28 feet in height, that limits the overall square footage of a given structure. For instance, on a 6,000-square-foot lot (60 x 100 feet) in downtown Aspen, the maximum size of an aboveground structure is 2,800 square feet. If you are prepared to add on an ADU, or "accessory dwelling unit," which is supposed to be rented only to a qualified employee in Pitkin County, you may then extend the size of the house to 3,200 square feet.

Instead, to increase house size people generally have part of the dwelling built below grade and then add large window wells. A Victorian home built in 1990 was offered at presstime for $2,295,000. Situated in the West End of town, it included 4,800 square feet on a lot measuring 6,000 square feet. There was no garage, and one-third of the house was below grade. Another, located in Mountain Valley and priced at $2.8 million, had been built in 1970 and later remodeled. It measured only 3,700 square feet (five bedrooms and baths), but included a three-car garage and a motorcycle garage. "People tend to be shocked by the prices because the houses aren't very large," says Moy. "But then you really don't spend a lot of time at home here. It's all about being outdoors." Private swimming pools and tennis courts are also hard to find.


EAST HAMPTON, NEW YORK

Main Attractions The ocean and proximity to New York City.

Availability and Prices It's very common to find houses worth $3 million or more, according to Judi Desiderio, owner of Cook Pony Farm Real Estate in Bridgehampton; the problem is finding ones that are for sale.

"As of right now, in East Hampton village in the Estate Area, there are fewer than a dozen homes available in the two- to three-million-dollar range," says Desiderio. Two years ago, what is presently a $3 million house changed hands for $1.8 million. Five years ago, Desiderio says, a 6,000-squarefoot spec house on a prime East Hampton street was sold for $2.3 million. This property included a swimming pool, tennis courts, and deeded ocean access. Nothing has since changed about the house, but today it is valued at $8.5 million.

One thing you will not find in East Hampton for $3 million: oceanfront property. Desiderio says that the last oceanfront sale was for $5.9 million. It was on a 2.5-acre lot that had been part of a larger estate. (Those willing to forgo East Hampton can find oceanfront homes for as low as $3-$5 million in Amagansett or Quogue.)

Who's Buying As Desiderio puts it, the Hamptons have become "the playground for people on Wall Street"-and they are paying in cash. Other buyers, who are also generally from New York City, include the twenty- and thirty-something dot-com set; younger professional married couples with children; and retirees.

Prime Locations East Hampton at its very finest is East Hampton Village, which is made up of the six roads to the south of "the Highway" (Route 27) that run on either side of the Maidstone Club-one of the oldest golf clubs in the country. (To the north of the Maidstone Club is Hook Pond, and to the south is the ocean.) There is also Georgica, the Estate Area, which includes all roads that branch off horseshoe-shaped Georgica Road, and Main Street, which is listed on the national historic registry as one- of the most beautiful streets in the United States.

As for East Hampton Village, the three roads to the east of the club are Further Lane, Middle Lane, and Hither Lane, with Further being the closest to the ocean, which you can see from the houses. (Billy Joel sold his Further Lane home to Jerry Seinfeld for $37 million.) This area was developed more recently, and properties tend to be bigger and afford more privacy." It has a more rural feeling to it than the other side of the Estate Area," says Desiderio. "There are still some working farms here."

To the west of the club lie Lily Pond Lane (the CEOs of TWA and Kodak have homes here), Lee Avenue, and Apaquogue Road, pronounced "Apaquag." This is the area people think of as old East Hampton, and it is where Jackie Onassis stayed. Cedar-shingled "cottages" that are 10,000 to 20,000 square feet are common. Lily Pond Lane is the closest to the ocean, but the vegetation is so lush that you cannot see it from the houses. "The feeling here is very Great Gatsby," says Desiderio.

What You Can Expect for $3 Million A 3,000-square-foot home on one half to one acre; a two-car garage; landscaping; top kitchen appliances and granite countertops; marble in the baths; a fireplace in the living room; and a security system.

What You Won’t Find for $3 Million A home theater (only in $10 to $15 million homes); gallery rooms; libraries; private golf courses; helicopter pads (only over $20 million). In older areas, you probably won't find a tennis court or swimming pool, either. "You need more than one acre to put these in," Desiderio says.


BIG SKY, MONTANA

Main Attractions Great hiking, horseback riding, skiing, golf, and fishing for blue ribbon trout. Plus an abundance of nature (Yellowstone Park is 12 miles away; most parcels of land are undeveloped) and privacy (the closest Wal-Mart and hospital are 45 miles away, in Bozeman). According to Don Pilotte of Prudential Big Sky Real Estate, ten acres is usually the minimum that comes with a house costing $3 million. "But if you just buy land," he adds, "there are wonderful twenty-acre parcels for as little as $225,000. By western real estate standards we're a bargain. Yet in many ways we are still undiscovered."

Availability and Prices They're on the rise. "A few years ago there were very few homes above $1 million," Pilotte notes. "Now we have six to seven in the $2 to $6 million range at any time. But Big Sky is still an emerging market."

Who's Buying Mostly people from out of state who pay in cash. In a survey that Pilotte's agency conducted based on year-to-date sales, 20 buyers were from the northeast, nine from the southeast, ten from the central U.S., 14 from the Rockies, nine from the West (Oregon, Washington, California), and only five from Montana. In the $3 million range, the majority are between the ages of 50 and 60. "One year ago we got more inquiries from dot-com and Wall Street thirty-something millionaires," Pilotte says. "But these days we don't see so many."

Prime Locations Most luxury homes are either in Mountain Village or Meadow Village. In the former, which is at 8,000 to 8,300 feet in elevation, skiing is the main attraction; in the latter, which lies at 6,000 feet in elevation and enjoys a considerably milder climate, it's golf. "Properties tend to be somewhat more expensive in the Meadow area," Pilotte says, "because they come with more acreage-anywhere from ten to 200 acres." On the mountain, you can also find luxury condos.

What You Can Expect for $3 Million Most of these luxury houses come with high-end amenities (granite countertops and foyers; top kitchen appliances; 500-squarefoot bathrooms with slate tiles, jetted tubs, and multiple showerheads).

What You Won’t Find for $3 Million Swimming pools, tennis courts, security systems, and air conditioning. "Fewer than two percent of the homes have air conditioning," says Pilotte, "mainly because there are only thirty consecutive frost-free days per year, in July and August."

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Looking for that Perfect Getaway? Say, an Oceanfront in Palm Beach or a Ranch in Montana? Travis Neighbor Ward Reports on What $3 Million Buys Around the Country.

By Travis Neighbor Ward