Million-Dollar Spec Houses -- Developers Are Taking Million-Dollar Gambles, Building Large, Luxury Homes On Spec, But They're Also Finding Buyers With Deep Pockets

Just off the fourth hole of the Plateau Golf and Country Club sits Exhibit ZZZ in the case of very high housing prices.

For $1.25 million, you can move tomorrow into this Cadillac of a suburban home on the Issaquah plateau - a spacious residence tailored down to the cherry-wood panels on the refrigerator, with generous helpings of granite and marble, and so close to the putting green you can evaluate each golfer's swing from the master sitting room.

The house sits above the street on two-thirds of an acre; its circular driveway swings by $60,000 worth of landscaping to a two-story granite entry arch. Inside the front door, a stairway climbs to a second-story balcony from which a prom-going son or daughter could make a very grand entrance. To the right, through an arch of gleaming white millwork, is a living room centered around a marble-and-tile fireplace. To the left, the office/den is paneled floor-to-ceiling in cherry.

The whole package includes the golf-course community of 68 other suburban estates (called Windsor Greens), the size of the house (4,707 square feet, or two to three times the average King County home), and much more than ordinary workmanship. Crews spent more than a month simply painting the interior walls and trim.

What's intriguing about this house, however, isn't its features or architecture. The floor plan is basically a stretch-limo version of what William Buchan Homes uses in some of its lower-cost homes.

What makes it stand out is that William Buchan built it on speculation, meaning the company had no buyer in hand. This says at least two things: Buyers in this price range are plentiful enough that builders - not many, but a few - will risk constructing something this big and costly with confidence it will sell relatively quickly. It also says that the top of the market for new, ready-made homes now exceeds the $1 million mark.

If you have $1 million to spend - roughly $200,000 to $300,000 down and in the neighborhood of $5,000 to $6,000 a month - you also can hire an architect, buy a piece of land and build your own version of paradise - whether that's a striking view of the Cascades, a place on the water or a retreat deep in the woods.

You also can move into extremely nice homes in Seattle's toniest neighborhoods. However, if you want a view and a huge piece of property in someplace like Washington Park, these days you're probably looking at closer to $2 million, says Pam Johnson, a director of Windermere Real Estate's "Premier Home" program, which handles properties priced (in King County) at $650,000 and up.

But builders say there's also a niche for a small but growing group of people who can pay $1 million and want new homes but don't want the work and wait of custom building. For them, builders not only are offering presales - the real-estate term for selecting a floor plan and a lot before a home is built - but also fully finished ones like the Buchan house in Windsor Greens.

Windsor Greens has several other spec homes at $1 million and up that are under construction or close to it. You also can find a handful of such homes high up in the Lakemont development on Cougar Mountain, where views and a close-in location are the draws.

Uplands, a North Bend-area project being marketed as a mountain-lodge retreat a la Sun Valley and Vail, also has plans for five spec homes priced between $875,000 and $1.2 million, says Scott Cameron, project listing agent and former Lakemont marketing director.

When asked why Rick Burnstead Construction is building one spec home priced over $1 million and Steven Burnstead Construction has another for $986,000, Jolyn Davis of Burnstead Construction gives the simple, obvious reason: They're selling.

"The market seems to be there," says Paul Taylor, vice president of construction at William Buchan Homes. "What stops you from selling houses at that price is that you get one that sits on the market for six months and you read that the economy is going downhill.

"If the market begins to turn, then we would change the way we build the houses to bring them down to the price we think we could sell."

William Buchan sold its first spec home at Windsor Greens, priced at $797,500, in three weeks. The second, priced at $689,500, sold in two weeks. This third model - the $1.25 million one on the fourth green - has been on the market about a month. No offers yet, but the company has sold two other homes priced over $1 million in the past year and has a third sale pending. It has three spec homes at that price under construction, Taylor says.

Cameron says he first remembers seeing spec homes sell at more than $1 million last fall - in Lakemont and at the Street of Dreams in Blakely Woods near Issaquah.

When prices get as high as $1 million, there aren't a whole lot of people who can breathe the air. But the high-tech industry, led by Microsoft, has spawned a new group of buyers that bolster the ranks of those who traditionally have made up the upper-end market: CEOs and other high-level business executives, attorneys, entrepreneurs and trust-fund babies.

The strength of the high-end market "is being driven by the big M in Redmond," Cameron says.

"There've been a lot more high-techie people in the last few years," says Mark von der Burg of Coldwell Banker Bain Associates.

They're often the ones, von der Burg says, that make a huge leap from a 1,200-square-foot house they bought several years ago for under $200,000 to something more than triple the size close to, if not more than, $1 million.

That's not far from what Lexie Alghosein and her husband, who works at Microsoft, will do soon when their home is done in Windsor Greens. They moved from California to Klahanie, another Issaquah Plateau development, several years ago. Their house there has 2,300 square feet. But with growing children and relatives who visit for months at a time, they wanted something bigger - about 3,000 square feet bigger. Building their own home seemed like "a lot of work," Alghosein says, so they didn't go that route. They're not golfers, but in Windsor Greens they found just the layout they wanted.

Did the prices surprise them when they started looking? Alghosein sounds unfazed: They knew bigger would be more expensive.

Such a casual response seems to sum up what's happening at this price range. How best to describe it?

"I think it's perhaps how easily we're talking about a million-dollar home," Cameron says. "It just doesn't cause the rush that it used to.

"A million-dollar home is not that much of an exception anymore."

------------------------------- 1997 home sales over $1 million -------------------------------

These figures are for new and resale properties.

Seattle:

-- 42 homes sold for more than $1 million, including three condominiums

-- Largest sale was $4.8 million in Washington Park

Region: (East King County - Mercer Island, Bellevue, Kirkland, Woodinville, Issaquah, North Bend - and Mill Creek)

-- 86 homes sold for more than $1 million

-- Largest sale was for $5.5 million in Medina.

Source: Multiple Listing Service data compiled by Windermere Real Estate.