Builders Still Betting on Mega-Mansions
The National Association of Home Builders reported weaker than expectedconfidence in January, but apparently one builder in Potomac, MD didn't get the memo.
David Niroo, of Niroo Masterpieces, claims the luxury market is alive and well and ready to move in to the outskirts of the Washington, DC metro area. He's so sure that he's building a 32,000 square foot spec home, which he expects to price at $6 million when complete.
"People are realizing the value of Washington," notes Niroo, as we stood, freezing, in front of the monstrosity of a cement frame. "If you take this house, it’s 32,000 square feet, and you drop it in Aspen or you drop it in Jersey, it's at least double the price. So they can see the value and they can see the growth in this town."
Granted Washington, DC didn't take as big a hit as many cities during the housing crash, thanks to the constant support of government employment, but it was not unscathed. Out here in Potomac, there are dozens of mega-monstrosities that hail from a headier time in housing. Many are on sale at very reduced prices. Not only are enormous homes in less demand right now, they seem, at least to us plain folk, somewhat less in vogue.
Now I realize that I don't play in the sandbox of the mega-wealthy, I don't know what they deem necessary in a home post-banking collapse, and I nearly killed myself driving through an ice storm, getting stuck spinning on the iced-over private access road, so my mind might not be as open and accepting as it usually is. I have toured truly incredible homes all over this country, from the Hamptons to Greenwich to Jackson Hole. I guess I just thought we were kind of over that. Sure, rich people will always want more, but there are already so many here. And I won't even go into the environmental issues in a home this size, despite the fact that Niroo says it will have all foam insulation to keep heating and AC costs down.
"I would say to you quality. It all comes down to quality. If you are building classic design homes that last forever, for example, if you take a look here, this is all steel and concrete. That’s unique and they will pay for quality. They will pay for something that is unprecedented to others," Niroo says as he points proudly at a solid wall of concrete.
Niroo believes that if he builds it, they will come, and he's right.
He has sold seven enormous, luxury spec homes in the past few years, while dozens of other builders were going out of business.
His clientele don't rely on the mortgage market because most don't take out mortgages. Sure, there have been big price drops in very tony neighborhoods, as the ultra-rich slice off millions from their homes and expectations. Niroo is betting against that trend.
"The market is improving. People have money. People like to spend. As you know the housing is as bottomed out as it can be. And this is a great investment. It all goes back again to location, location, location."
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