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Million dollar babies: High-end real estate is selling

Pricey real estate beats the odds in tough economy

POSTED: June 1, 2008 5:01 a.m.

One million dollars. It was once the plateau that was as far away as the moon. A generation ago, a worker might work an entire career and never earn a million dollars.

But a real estate executive that monitors trends says that homes with a price tag of $1 million and up are among the bright spots in the real estate market.

Frank Norton Jr., president of the Norton Agency and author of an annual report called "Native Intelligence," said that expensive homes aren't exactly selling like hotcakes, but there is encouraging news.

"We are seeing isolated houses over $1 million sell well," Norton said. "A million-dollar house in our market tends to sell in the first 30 days or it stays on the market for up to three years."
Just what will $1 million get you?

Depending on the location and the amount of land, a home in the $1 million and up range will typically have five to six bedrooms, often with a full bathroom for each bedroom. Hardwood floors are common throughout the home, and bathrooms are likely to have marble floors and wall tiles.

Technology has found its place in the luxury home with media rooms equipped with large-screen televisions and high-end sound systems to match. Some homes have various degrees of automation controlling everything from the opening of blinds to control of lights.

Hall County's largest concentration of high-end homes is around Lake Lanier, both in planned developments and individual lots. Norton said many lots that once held smaller homes are being purchased and the home is either razed or used as the core of a much larger home.

"We used to build McMansions; now we're building McSouthfork," Norton said, referring to the sprawling mansion that was the center of the TV series, "Dallas."

There are other area developments with larger concentrations of mansions, such as Chateau Elan near Braselton. But mansion mania is a phenomenon that is common throughout the Atlanta area.

"It is amazing the amount of high-end real estate Atlanta has been able to absorb," said Roger Tutterow, a Mercer University economist. "There are a lot of households that have significant two-earner income. Some of it has been an influx of capital from retirees who have moved in from the Northeast, where housing is much more expensive. They are often surprised by how much house they can get for the dollar here in the South."

Tutterow calls the housing market "bipolar" with a higher number of houses selling for $250,000 and below and others selling above $1 million.

But a $1 million price tag is not for everyone. Most lenders would require a household income of $250,000 and up in order to qualify for a mortgage on a house in that price range. Based on current interest rates, it takes about $600 a month to repay each $100,000 borrowed. If $1 million is financed, the base payment would be around $6,000 per month, plus taxes and insurance.

But for some, financing is not a big issue.

"In the higher price points, these are individuals with enough net worth or income where they are a lot less dependent upon the level of mortgage rates or getting out of their other home before they move into this one. They are less sensitive to some of the economic climate than the middle of the market," Tutterow said.

Betsy Clausen, an agent with Prudential Georgia Realty, has experience with both sellers and buyers of high-end homes.

"When you're listing a $1 million home, generally the owner wants their agent there when it is being shown by another agent," Clausen said, adding that everyone who calls to see a house is not necessarily going to get in.

"When it gets to $2 million plus, owners often want a financial statement from prospective buyers before they are allowed in," she said. "They want to know you can afford their house."

Clausen, whose husband, Chuck, is a former NFL assistant coach, has sold homes to players for the Atlanta Falcons. She said professional athletes want homes that are flashy. "They want lots of bling," she said.

Customers who are buying in the higher price range often depend on their agent to understand their wants and screen out houses that would not interest them. "I go and look for them," she said. "Often, they are flying in from out of town and time is critical. If the house is not what they're looking for, it goes off the list."

On a tour of a home on Derby Lane in Chateau Elan, which is listed at $1.69 million, Clausen showed the features that distinguish the home from others, including a wine cellar and tasting room with a curved ceiling and brick walls. The home also had a basement that was underground on all sides to provide shelter in the event of a storm. The basement included a media room with a 6-foot-high projection screen. A specialized remote control could adjust everything from sound to lighting.

The home had a custom kitchen with granite countertops. The refrigerator panels match the cabinets as a means of camouflaging the appliance. A large casual dining area adjoins the kitchen with seating for up to 12 guests. A butler's pantry leads to a spacious dining room that also seats 12.

The home has a massive door that was built specifically for the home. The thick wooden door weighs 350 pounds.

A two-story foyer includes a double staircase that encircles the room. It leads to a large den that includes a fireplace with access in both the den and the adjoining master bedroom. Outside is a guest house on the opposite end of a swimming pool. The home also has a three-car garage.

On Lake Lanier, the place where the area has the most million-dollar homes, the story is not as rosy.
Kim Waters, an associate broker with Century 21 Community Realty, has a lakefront home on Sidney Drive that has been reduced in price. Waters' customer is now offering a $15,000 selling bonus to the agent who sells the $1.45 million property.

It also includes a guest/pool house. The pool includes a rock waterfall that cascades down into the pool and an elevated hot tub. The home, which belongs to an owner in the stone business, has numerous places where marble and granite are decoratively included.

"There's quite a bit of inventory, as far as the lake goes," Waters said. She said that prospective buyers have shied away from properties where the declining levels of the lake have left docks either partially in the water or sitting on dry land.

"Every time I've seen the lake like this, it's hard to get people excited about looking at lake property when it looks as depressing as it does right now," she said.



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