Monday, March 22, 2010

New meaning for the term ‘spec house’

The a 5,800 sq. ft. Georgian Colonial-style mansion sits prominently on a prime piece of Washington Park real estate, 821 34th Avenue East . Completed late last summer, the four-bedroom, four-bathroom house features 12-foot ceilings, seismic framing, a 200 sq. ft. walk-in closet, a sauna that seats 10, a 1,800 bottle wine cellar, and classic cut-crystal Bohemian and Murano chandeliers. It’s a $5,650,000 spec house.

The developers of the property are uncomfortable, however, with my applying that term to their masterpiece. By definition, ‘spec house’ simply refers to a house that has been “built in anticipation of finding a buyer, that is, speculatively.” But the practical implication of speculative development for much of the housing market right now is a glut of unsold houses nationally that continues to depress housing values and undermine the financial stability of many community banks. Thus ‘spec house’ has taken on some very negative connotations in the lower end of the market.

Speculative development, however, has been a prominent feature of the Madison Park housing scene for many years, as older homes—often debilitated houses and cottages—have been replaced one lot at a time with much bigger, modern dwellings. We reported last summer that spec houses represented a fifth of all the residences then listed for sale in the Park (exclusive of Broadmoor, where speculative building is not allowed). So there’s nothing new or noteworthy about developers building houses in our neighborhood without having specific buyers in mind. What is perhaps a bit different about the situation today is the extent to which there are several very large, very high-end spec houses for sale here, all located in Washington Park and priced at more than $3.5 million.

The Georgian Colonial is the most dramatic of these houses. It was built by Old World Elegance LLC, whose three principals, real estate broker Wayne Boswell, financier Danny Campbell, and architect Milan Heger, say they wanted to create a high-craftsmanship home in keeping with the essence of the Washington Park neighborhood. I recently toured the property with Heger, who told me that the house was “customized to our concept of what the new owner will be like: a person who respects history and culture, has joie de vivre, loves travel, and loves to live with references.” The concept was to create an old-word, European feel in a house with all of the modern amenities. “We never conceived of this as a spec house. It has been built with an idea in mind of who is my typical architectural client.”

Before he began designing the house, Heger said, he studied many of the early-twentieth century colonials on Capitol Hill in order to connect the historic Georgian style to that of Seattle. All of the interior woodwork and molding, he noted, was custom designed and milled to specifications. The red mahogany which encloses the home’s living room is Forest Stewardship Council certified, although not everything in the home is green. “We went green wherever it made sense,” Heger commented. In addition, many of the home’s elements are ergonomically designed, he noted.

The house features lots of marble, including the floor of the impressive entry foyer, and extensive use of tile work. The first floor “powder room” has, for example, a huge carved-marble sink, intricately inlaid tiles, and Venetian burnished plaster (which contains particles of marble). The master bathroom on the upper floor is definitely a showpiece, with a woven-pattern tile floor, and a shower that could probably accommodate six easily.

The house has a chef’s kitchen, a large entertainment room, a fitness center with steam room, an over-sized laundry room which can double as a staging kitchen for event caterers, a large home office, three decks, and the obligatory detached garage. There’s a grand wooden staircase off the main entry, a wireless backup to the wired security system, a residence-wide sound system, and a leaded-glass-windowed wooden wine-cellar door that was salvaged and refurbished from the original house that sat on the site.

Well, it’s quite a production, and one that will definitely not appeal to everyone’s taste. But Heger’s partner, Wayne Boswell, professes unconcern about ultimately selling the property, which has been on the market for about a year. “We’re looking for the right buyer to come along who will appreciate the value,” he told me. “We’ve created something special. I’m certain we’ll be successful.” He noted that the principal motivation for selling this house is to be able to do the next one. “We’re neighborhood oriented,” he added, “and Washington Park is the only place we want to be.” And he adds, “We don’t have any bank financing.”

Another “custom” Washington Park property currently on the market is this 6,330 sq. ft. house at 602 34th Avenue East completed late last year by Babylon Gold LLC, which has developed other luxury properties in the area. Listed at $3,750,000, the five-bedroom, four-and-a-half bathroom house features a gourmet kitchen with Calcutta marble counters, a home theatre/media room, multiple laundry rooms, wine cellar, and vaulted ceilings. It has been on the market 145 days.
Like most of the high-end spec houses on the market in the Park, the builder put a lot of attention into the details, making a strong attempt to integrate the interior with the house's exterior.

The one high-end spec house in Washington Park that has excellent views is the 6,990 sq. ft. “two-storey traditional” at 1217 39th Avenue East (shown below), built by a longtime Washington Park resident. Listed at $4,290,000, the house has five bedrooms, six bathrooms, a butler’s pantry, mud room, wine cellar, nanny’s quarters, media and billiard rooms, and an “open-concept” kitchen. It has been on the market 270 days.
This is the view from the master suite:

By my count there are presently five spec houses for sale in Washington Park and one spec house on the market north of Madison Street. At least one spec house has been sold this year and one has been withdrawn from the market by its builder, unsold. I am told that the owner is hoping to “wait the market out.” Another spec house has apparently been foreclosed upon by the bank that provided the financing, though that house is still on the market.

So obviously not every speculation works, even in Madison Park—which raises a question about what it takes to be successful when building a house for an unknown buyer. Real estate agent Guy Tobin of Madison House says he thinks it’s essential for spec builders “to get the details right” and not create something that is out of line with the other houses in the neighborhood. Jane Powers, a broker at Ewing & Clark, agrees, saying that quality construction and detailing are essential to success. “A spec house should be special,” she adds, “but not odd.”

Then, of course, there’s the issue of timing the market correctly. At least three spec houses are still in some stage of construction in Madison Park—and when they’re completed it may signal the end of speculative building in the neighborhood for some time. Financing is tough, the market here remains precarious, and developers have good reason for caution. For though it may not be true that timing is everything, it certainly is something.

[Photo credits: Georgian Colonial house photos by John G. Wilbanks Photography, courtesy of Old Word Elegance, LLC. 34th Street house interior photos by Buck Usher or Usher Creative, courtesy of Ewing & Clark. 39th Street house view shot courtesy of Redfin.]


  1. there are some really nice houses i like the view in the bottom picture too

  2. The challenge is attracting the cash buyer and pricing to sell against the competition. Who knows how many serious buyers will emerge in the $3m and up price range for non-waterfront, view/partial/no view?

    There are 9 non-waterfront homes over $3m in the area-how many buyers will emerge? Could be one, could be two-three--that leaves 6-8 unsold come winter with a feW more sure to be added to the inventory over the coming months.

    Does anyone think the market can absorb more than three $3m+ non-waterfront properties this season?

  3. The figures do not include Broadmoor, which has an additional 8 homes above $3m.

  4. "We never conceived of this as a spec house. It has been built with an idea in mind of who is my typical architectural client."

    Ah, you built it without a concrete buyer, it IS a spec house.

    An "idea" or a "typical client" is not gonna be paying the carry on the house.


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