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Million-dollar homes: March Madness edition

Source: Salina Russell | Team Armand | Coldwell Banker

Housing is entering the heart of the spring season, but buyers are still not warming up to the market. Home sales are down across the nation as higher prices, tight credit and higher interest rates hold demand in a headlock. The nation's home builders are seeing improvements, but only on their higher-priced homes, which is where much of the focus is now.

Read MoreWill the American Dream still include owning a home?

Sales of homes priced above $750,000 increased 13 percent in February from a year ago, according to the National Association of Realtors. Homes priced below $250,000 fell 11 percent. Those lower-priced homes make up 64 percent of all home sales. The trouble on the lower end is that investors are finding less to buy as fewer homes fall into foreclosure. First-time home buyers, who should pick up the slack, are having trouble qualifying in today's mortgage market. Analysts argue this is no time for the Federal Reserve to be pulling out of the mortgage market.

"Until proven otherwise, these numbers are awful, and create a need for continued Fed accommodation and a positive technical backdrop for securitized products, especially credit," Bank of America analysts Justin Borst and Chris Flanagan wrote in a note to investors.

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The bright spot, again, is the higher end. Sales of homes priced over $1 million are up over 14 percent from a year ago. What buyers get for a million dollars, however, varies greatly market to market. More than 40 percent of for-sale listings in metro San Francisco are over $1 million, as are more than 20 percent in Fairfield County, Conn., according to a report from Trulia, an online real estate company. The smallest million-dollar homes are in New York, typically less than 1,500 square feet, but those homes stretch to 6,000 square feet in the Kansas City area and Pittsburgh.

(Read more: Where to invest in real estate in 2039)

On Tuesday, seven CNBC reporters fanned out to seven different markets, and each displayed one home priced at about $1 million. They didn't disclose their locations, but documented the interiors, exteriors, marketed features and one unique bonus of each home. Hint: It's March Madness time, so each home is located near a college that has won the tournament.

On Tuesday, CNBC featured a tipoff involving two homes during each daytime show. Anchors guessed the locations, and then real estate maven Dolly Lenz disclosed not just where they are but which home gives the better bang for the buck. The winner moved on to the next round.

Round one:

University of Kentucky
Home Nickname: Brick Beauty

Always late? Don't panic! This traditional ranch-style brick home—and its three-quarters of an acre—is just five minutes away from the university and downtown Lexington.

This 5,400-square-feet home is perfect to keep your guests entertained during March Madness. The kitchen, at the heart of the house, is strategically located, while keeping an eye on the game.

Got guests staying after a long night of cheering? Not a problem with four bedrooms. The master suite even possesses an outdoor Jacuzzi.

Price: $995,000

University of Louisville
House Nickname: Tuscan Mansion

Want to practice hoops in the driveway and be ready for March Madness? This two-story Tuscan-style ranch is located outside the city, on 5 acres. There is also a hidden hot tub out back to relax after the training.

Guests and family can take a break during timeout in the enclosed back porch … or the cozy gourmet kitchen. The house is 6,700 square-feet.

With six bedrooms, there is enough room to accommodate everybody. The master suite possesses a fireplace, walk-in closets and a spa-like bathroom.

And to add to the March Madness fun, watch the game while playing billiards, getting a drink from the wine cellar … or even training in the house's gym.

Price: $989,000

"Those houses, both of them, are absolutely spectacular," Lenz said. "In the Lexington's house, it's close to everything. It's three to five minutes away from town. You get every amenity. You're not missing anything and it's a ranch good for a lot of people: retirees, good for children, good for every group."

The winner: University of Kentucky

Round two:

Duke
Home Nickname: Mountain Manor

Want to appreciate March Madness among the mountains? This elegant two-story European-style home is surrounded by 10 acres.

With four bedrooms, the house is large enough (7,500 square-feet and 19 rooms!) to welcome an entire basketball team.

Bonus point for two game rooms and an outdoor hoop.

Price: $1.05 million

University of North Carolina
Home Nickname: Gated Retreat

Our next house, also in North Carolina, is a 5,300-square-foot brick home with a wide-open floor and a chef's kitchen.

The game finished unexpectedly late? The house is large enough to accommodate guests with four large bedrooms, each with their own bathroom.

Not much into March Madness or basketball? The attraction of this house is the golf course in the backyard. Enjoy!

Price: $980,000

"The employment situation is good in both areas," Lenz said, "and the tax situation is also good. Both of these are good. It's just a question of maintenance and all the other issues. [Gated Retreat] is petite. It's able to be handled by anybody. "

The winner: University of North Carolina

Round three:

University of Kansas
Home Nickname: Roomy Ranch

The next contender is a ranch property large enough to welcome the Final Four on its 40 acres.

The 6,400-square-foot home has a huge kitchen with a breakfast bar to keep athletes happy.

With three bedrooms, the master suite possesses a steam shower and Jacuzzi tub, a private deck and a panic room.

Price: $999,950

University of Florida
Home Nickname: Custom Charm

Want to see the Gators playing? The house is located on a cul-de-sac, close to shops, restaurants and other university basketball games.

Although smaller than other houses so far—5,000 square feet, it has a kitchen surrounded by a breakfast bar. It can also accommodate guests with its five bedrooms.

After a night of basketball, rooting for the Gators, come relax in the pool and hot tub.

Price: $995,000

"The negative of [Roomy Ranch], of course is that it is on 40 acres," Lenz said. "The other negatives is that it has a panic room. [Custom Charm] has an indoor/outdoor lifestyle. It's pure pure Florida luxury and the pool is amazing. Here we go Gators."

The winner: University of Florida

Semifinals:

University of Kentucky
Home Nickname: Brick Beauty

This 5,400-square-foot house is back after winning round one. The mansion has four bedrooms, 4½ bathrooms and the view from the hot tub is spectacular.

Want to relax between two games? Enjoy the secluded backyard, the heated pool with its waterfall or the fire pit with its gazebo.

Price: $995,000

UCONN
Home Nickname: Lake Lookout

The final contender, located in Connecticut, is from a contemporary colonial style and has a 1,500-foot lakefront and private beach.

The house is 6,144 square feet. The rooms, on three different levels, are large enough to raise a basketball team while having a peek at the lakeside view.

With five bedrooms and a game room, there's enough to do to keep everyone happy, including watching March Madness.

Price: $999,518

"It's not so much about the two markets as it is about the two specific houses," Lenz said. "[Lake Lookout] is a big house, on a big lot, with a beautiful view, needing a lot of work. Taxes are almost at $20,000 a year. The other house is in walking distance to everything and taxes are under $6,000 a year."

The winner: University of Kentucky

Semifinals:

University of Kentucky
Home Nickname: Brick Beauty

Back for the second semifinal is this 5,400-square-foot house in Kentucky. The traditional ranch-style home will welcome all your guests during March Madness.

With four bedrooms, guests will feel at home and have the opportunity for a delicious meal from the large kitchen. The master suite has a bathroom with an outdoor Jacuzzi and a fireplace.

Not a big fan of basketball? There's a heated pool with a waterfall.

Price: $995,000

University of Florida
Home Nickname: Custom Charm

The last semifinalist is this 5,000-square-foot home in Florida. Just minutes away from city life, the estate is surrounded by nature and serenity.

With five bedrooms and 4½ bathrooms, the master suite is ideal for relaxing peacefully and is equipped with controlled shades—among other features.

When going outside, the pool mixes harmoniously with the nature preserve and the backyard can welcome parties with an outdoor kitchen and a gas grill.

Price: $995,000

"[Brick Beauty] is so terrific," Lenz said. "It's an entertainment house, a fine living house. I don't know how you beat that house. There is a fireplace in the bathroom. How often do you see that? This year, fireplaces are in. They're big sellers."

The winner: University of Kentucky

Final:

It's time for the big final. Which team is going to win? Kentucky's Wildcats or North Carolina's Tar Heels?

Both homes are the same size and in the same price range. So does it all come down to personal taste?

Kentucky's Brick Beauty is much appreciated for its numerous amenities, the fireplace in the bathroom and its proximity to the city and the university.

North Carolina's Gated Retreat, on the other hand, can count on its four large bedrooms, chef's kitchen and a golf course in the backyard.

So which home gets the winning title?

"This is really the point in the game where it's tough. The houses are both terrific, but [one] is better and the reason it's better: it's in walking distance of everything and it's a broad appeal house," said Lenz of the winning house, which is ... Kentucky's Brick Beauty.

Do you agree? Tell us your March Madness home pick.

Questions?Comments? facebook.com/DianaOlickCNBC

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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