Luxury Housing Market Booms With Million-Dollar Mansions

Wayne Sweeney made his money by seeing the value of things. A successful investor who nine years ago wanted to build a home to his own specifications, Sweeney settled on a new development minutes away from Madison’s west side, a former cornfield that is now the site for Pheasant Point, one of several high-end subdivisions in the town of Middleton.

He plunked down $1 million cash and told the builder what he wanted.

“This kind of market,” Sweeney says, “people generally pay cash.”

Sweeney is typical of a growing number of people who by virtue of hard work, luck or a combination of both have enough cash to build the home they’ve always wanted. While two decades ago even the most expensive homes barely topped $300,000, in Dane County today there are well over 400 single-family homes that are assessed at more than $1 million, and more than 1,000 worth more than $750,000, according to Dane County property tax records.

When it was built, Sweeney’s home was assessed at $880,000. Now it’s assessed at the $1 million he paid for it, but on the open market it’s likely to fetch more. Both the investor and the homeowner in him are pleased.

Sweeney’s solid brick home sits on an acre and a half of deep green turf — not a weed in sight. He and his wife, Coretta, have 5,700 square feet of living space, including multiple dining areas, a spacious kitchen, a four-season porch, an office and a plush bedroom. Several rooms are equipped with solid cherry cabinets.

The living room and 17-foot entryway are flooded with sunlight that pours in through a mammoth wall of glass. A huge deck, which can be accessed from several rooms, hugs the back of the home. From it, he can see several homes of similar value, also on lush green grass.

Downstairs there’s more living space, two bedrooms and a kitchen for guests to use when they visit. There is also a home theater. His four-car, 1,000-square-foot garage has room for a Rolls Royce, a Mercedes, a Cadillac SUV and a Jaguar.

The home has five bathrooms and three fireplaces. His stereo system pipes impeccably clear music into every corner of the home from speakers imbedded in his 9-foot ceilings.

And being inveterately cash-conscious, he doesn’t miss the taxes he paid on his last three homes on Madison’s near west side.

“The taxes here are great,” he says.

In 2006 he paid just over $13,000 in taxes, and he estimates he would pay more than twice that if the same house was in Madison.

Big time

But a $1 million house starts to look pretty modest when you look at Dane County’s priciest residences.

Lake Mendota remains a popular location for those who want to live really large, providing a taste of nature while commanding a spectacular view of the State Capitol.

In 2001 investor Joel Bahr and his wife Leigh built a majestic, 8,411-square-foot residence that resembles a French chateau on Fox Bluff Road. The home’s assessed value is $4.3 million, making it the second-most pricey residence in the county, according to Dane County assessment records for 2006. And that amount will likely increase substantially when the town of Westport undergoes a total revaluation next year.

Attorney Daniel Rottier’s $4.4 million English Gothic mansion near the Maple Bluff shore of Mendota remains at the top of the list.

With few exceptions, the most notable one being Rottier’s palatial estate situated conspicuously on Farwell Drive, you can’t do a sightseeing tour of Dane County’s elite estates. While ranging from tasteful to ostentatious, they were not built with the public in mind.

“My experience has been that most of the people that buy the really big homes aren’t trying to flaunt it,” says longtime real estate agent Jac Blasi of Restaino Bunbury & Associates. “If anything they’re trying to be discreet. They’d rather have it down the driveway behind a stand of trees so people don’t know it’s hiding there.”

If Rottier took a short walk to the lake and looked straight across, he might see builder Tim Erdman’s new $3 million home in Shorewood Hills, his cantilevered living room hovering above an indoor-outdoor pool.

Businessman Dan Levine sought a lakeside home as well, but he took a different approach. In 2000, he built a 25-acre, half-mile long well-fed ski lake in the town of Oregon for his son, a world-class wake boarder. Three years later he put up an 8,727-square-foot home, which last year was assessed at $1.8 million.

And if you can’t have water, there’s still golf. The Bishop’s Bay Country Club area has for years been a magnet for money, but the lots are now filled. In 2004 an entity listed on assessment records as the Ann R. Ragatz revocable trust bankrolled a home assessed last year assessed at $3 million, making the eighth spot on the top ten list of the county’s richest properties.

Then there are those who yearn not for water or golf, but for sheer size. For example, nestled behind a treeline in the town of Verona sits the home of Ken Keryluk, a mammoth 19,000-square foot glass, steel and concrete structure.

“It looks like an office building,” says town assessor Paul Musser, who explained that the home should probably be valued at near $3 million, but because of problems with the construction is assessed at $1.7 million.

The Point

But perhaps the most extensive cluster of high-end homes is in the town of Middleton.

Sweeney was an early arrival to what has become known as The Point neighborhood, a series of conjoining subdivisions — Sauk Point Estates, Cardinal Point Estates, Cherrywood Acres and Pheasant Point — between Mineral Point and Old Sauk roads in the town of Middleton.

In increasing numbers people with the money to put down on a mini-mansion have settled in these communities of affluence, which in the past few years have replaced fertile farmland.

“Corporate executives and doctors,” says Blasi. “A lot of doctors are buying that land. Most of them need to be within commuting distance of the hospital.”

As real estate agents never tire of pointing out, it’s all about location. The Point neighborhood is a mere five-minute drive from Madison’s west side.

“Most of them want to be no more than six or seven miles west of the Beltline,” Blasi says. “It’s sort of an arbitrary stopping point for their search. Something usually this side of Mount Horeb is acceptable to them.”

Down County M, builders are raising the bar. You’ll find Glacier’s End and Glacier’s Woods, new developments with homes that are even more posh, featuring 12-foot ceilings, gourmet-style kitchens, great rooms, formal and informal dining rooms, bathrooms and bedrooms galore.

“The town of Middleton about 15 years ago decided their future was not in agriculture, where it had been prior to that, but rather was in development,” Blasi says. “So now there are country subdivisions all over the whole town of Middleton, one country subdivision after another with these one- or two-acre lots.”

As a general rule, the town sets a limit of 1.5 acres per lot, which has allowed for much denser residential development than in most other Dane County townships.

Location, location, location

The rise of the town of Middleton as a destination for the affluent began in the early 1990s when developers began to take advantage of the town’s relatively lenient land division restrictions and its proximity to a booming business communities in the city of Middleton and Madison’s west side.

One of the first was the Noll Valley subdivision in the southwest corner of the town of Middleton between Mineral Point Road and County PD.

“I think that would be one of the precedents for this sort of thing,” said town of Middleton administrator David Shaw.

Noll Valley has continued to draw high-end development and now boasts 17 homes assessed at more than $1 million. One of them, owned by former dairy company owner and golf ace Gary Steinhauer, is worth nearly $2 million.

But in recent years, more of those who want to live large have been drawn to the Mineral Point Road corridor to the north, where homes commonly measure over 5,000 square feet.

“I would say that it’s a combination of factors, the primary one being location,” says Shaw.

Mineral Point Road provides quick access to nearby Verona, Middleton and Madison’s west side, hotbeds of business activity, Shaw says. People who run those businesses want to get to work quickly. And the university, the destination for high-paid professors, administrators and doctors, is only minutes away via U.S. 14 or Mineral Point Road and the Beltline.

“And then we provided an area where people could have larger lots and larger homes, so it just worked out well,” Shaw says.

Not that the housing slump hasn’t affected even the wealthy. In the town of Middleton, building permits have dropped from over 100 new homes a few years ago to 31 last year. This year, housing starts number only 11 so far.

But developers with an eye to the future are now sitting on much of the town’s remaining agricultural land, just waiting for the right time to build.

Back in business

That time may be here. While low and moderate housing market continues to lag, the million-dollar market is picking up, according to builder Hart DeNoble, who specializes in high-end homes.

“I’m seeing activity picking up, so we’re going to be picking up some new homes here this winter,” he says. “And then by spring I think it’s going to come around quite a bit. It won’t be like it was in ‘04 and ‘05. Those were two banner years. But hopefully we’ll get back to where we should be.”

DeNoble says the relatively recent boom in luxury housing was overdue, stalled in part by an innate stinginess among Madisonians when it comes to housing.

“People in Madison tend to spend not as much of their income on housing as a lot of other parts of the country,” he says. “And I’m not just talking the coasts.”

He reels off a string of cities — Minneapolis, Chicago, St. Louis, Cleveland — from which some of his past customers have moved and been stunned at the area’s low housing costs.

“I had a customer from Cincinnati and she said, ‘I can’t find anything on the market that we like. There’s hardly any homes in our price range,’” he says. “They wanted to spend $1 million.”

For such customers, the town of Middleton has become a safe haven where property values are protected from the corrosive effects of more moderately priced housing.

“I think customers are smart enough to know that if everything else in the neighborhood is $550,000 to $650,000, you don’t want to put a million in your house because when it comes time for resale you’re never going to get it,” he says. “The neighborhood will I don’t want to say drag you down, but it will.”

Strength in numbers

According to Blasi, the market for luxury housing is fueled by the security of being surrounded by others that share affluent economic status. Buyers who once were taking a risk with their million-dollar homes can now feel their investment is safe.

“The guy that just goes out and buys a chunk of land and he’s the only one in town, he’s taking more of a risk than the guy who does it near a half-dozen other people doing the same thing,” he says. “People feel secure building a million-dollar home amongst million-dollar homes.”

But there are limits on what is a safe investment.

“Some of these guys that are in $3-million houses, they build them to their specifications and they love what they built, but in terms of resale you’re kind of hanging out there. I think you’re doing it for your own satisfaction, not for the investment.”

Luxury housing market booms locally with million-dollar mansions