Developers are Back to Risking Big Money on Speculative Mansions

We are now into three years of the housing bust and a small group of investors are plunging back into the risky business of betting millions on high end speculative homes. These are amenity rich mansions hoping for a wealthy buyer to materialize. There have been some big sales recently that indicate that the wealthiest amongst the buyers are coming back to the market shopping for trophy mansions as their second, third or fourth home.

The art auctions in New York and London have also witnessed record sales raising the hopes of developers. There is a series of speculative homes on the market hoping to attract a wealthy buyer. There is a five bedroom, seven bathroom ski home on a 1.2acre plot in Aspen priced at $23.9 million. An eight bedroom farmhouse style home in New York’s Hamptons is in the market for $ 26 million. In Los Angeles a house with a home theatre will sell for $13.7 million. All these mansions on the market are new constructions as developers feel that the wealthy buyers are more attracted to new constructions as they don’t want to waste time on maintaining an old property.

The new mega mansions have the latest in high tech gadgetry. Most of the systems in the house including security systems can be controlled remotely through an iPad or a cellphone. Bowling alleys, massage rooms and master-suite kitchenettes have become relatively common features in these new homes. The market is rebounding and the developers of the 10-bedroom estate on a private island off Florida’s Biscayne Bay that is listed for $60 million dollars are confident of selling it close to the listing price within a month.

Via: Online.wsj

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