Breck Cannabis AP

The line at Breckenridge Cannabis Club goes out the door as vacationers and residents alike take advantage of Colorado’s new recreational marijuana laws. (Kathryn Olson/AP)

We’ve seen photos and stories from Colorado ski towns such as Aspen and Breckenridge showing vacationers filing lines out the door at marijuana shops, so of course, we had to wonder what kind of impact legal pot could have on Colorado real estate. Are more buyers putting it in their pipes and smoking it?

Turns out the Colorado Association of Realtors was wondering the exact same thing.  After all, with 136 pot retailers in the state as of Dec. 2013, buyers were throwing green after green, eventually causing a state-wide shortage of smokables. But is recreational marijuana a boon for Colorado real estate, or a burden?

“Some people don’t want to come [to Colorado] with their families,” says Joyce Burford, executive director of Colorado Association of Ski Towns. “Because they have this image that all these pot smokers will be everywhere.” That’s not happening, she says, and “I don’t think that’s going to happen.”

Analysis from the Colorado Association of Realtors shows that while state law no longer forbids recreational pot sales and retailers, local governments hold the keys to the lease.

The majority of counties in Colorado have either already passed bans on recreational marijuana retailers or have delayed making a decision and placed a moratorium on pot business; closely monitoring how enactment is working in other parts of the state.

It looks as though recreational marijuana businesses will be absent from large portions of the state for the foreseeable future. According to the Denver Post, of the ten largest cities in Colorado (by population), only Denver is expected to accept license applications for recreational marijuana stores this year.

It’s also important to note that in counties and cities that have decided to allow recreational sales, grow operations will only be in areas zoned industrial.

Right now, Denver and Denver County are the only areas where you can still apply for a marijuana sales license. So vacation property owners don’t really have to worry about an influx of new ganja businesses. And in Vail, there’s a complete moratorium on recreational marijuana sales. Still, folks in Aspen are buying pot, but at least one Realtor doesn’t think it will do much for real estate sales, if anything at all.

“I don’t think [legal marijuana] is making that much difference,” Joshua Landis, a real-estate agent in Aspen, said in this piece in The Daily Beast.

“People have always been able to access marijuana in Aspen. Nobody is out smoking marijuana on the corner” just because it’s suddenly legal to possess and use it in private (it’s still illegal to use publicly). In addition, he says, “I don’t think it has any effect” on property values. “No one who can afford to buy property in Aspen is going to make their decision based on marijuana policy.”

If the lines snaking outside of the Breckenridge Cannabis Club are any indication, pot tourism might make Colorado the new Amsterdam. And heck, it might be a draw so much in that it awakens latent demand for buyers who want to move to a 4:20-friendly state, but perhaps in more affordable areas such as Denver and its surrounding suburbs.

Others, like Lubbock’s Colt and Amanda Smith, are among those planning to move to the state to ride the new economy. The couple founded the Lubbock chapter of NORML (National Organization for the Reform of Marijuana Laws).

They had talked about retiring in Colorado but decided to act early once the new law took effect.

“We have our house on the market right now,” Colt Smith said. “It makes sense to find exile in a place that has more reasonable laws than to sit around and wait for Texas to get there.”

The Smiths hope to launch a marijuana edibles business once they establish residency.

“We feel like Colorado is just beautiful and has beautiful laws,” Smith said. “When people tell me they’re going there to ski now, they use air quotes.”

“Skiing,” indeed.

 

As my site’s tagline reads, “you can never have too many homes.” Apparently, many buyers and homeowners agree. The latest Investment and Vacation Home Buyers Survey from the National Association of Realtors reported that vacation-home sales rose 7 percent in 2011.

In all, as I may have told you, vacation-home sales accounted for a healthy 11 percent of all real estate transactions in 2011. Not bad for a still-sluggish housing market.

And look at this gorgeous property I just found in Dana Point, California: $2500 per square foot at The Strand.

Of course, buying a vacation home is one thing. Maintaining it is another. What if you live in Dallas and your vacation home is in North Carolina or Miami or this $25 million number on the west coast? How do you make sure the kitchen sink isn’t leaking or the windows aren’t broken when you’re hundreds of miles away?

Simple. (Well, not that simple.) You hire a concierge service. These services – also known as property management services — will watch over your second home while you’re away, make sure that the grass is mowed and the snow (if your second home resides in a chillier clime) is plowed.

I recently spoke with my mortgage guru Marcus McCue, senior vice president with the Plano office of Guardian Mortgage Company, about the steps owners of vacation homes can take to find the right concierge service for their second residences. Mortgage companies tend to like it when you take care of your property. Not only do many of his customers have second homes, his family also maintains a vacation home in Colorado – one of the top two states for second homes for Texans.

Candy: First, why do you think the vacation-home market has remained so strong even during a slow time for primary real estate?

 Marcus: You have to consider the buyers in the second-home market. They are buying these homes because they want to, not because they need to. The economic slowdown obviously hasn’t hurt these people as much. They still have money to spend, and they want to spend it on vacation homes that they and their entire families can enjoy. Because of this, the second-home market isn’t as impacted by the ups and downs of the economy.

Candy: That’s exactly what we heard at NAREE. The second home market can be rather insulated. It’s easy to enjoy a vacation home while you’re there. But what about when you’re not? That’s the challenge, right, maintaining these homes when you live across the country from them?

Marcus: That can be a challenge. You need to hire a concierge or property management company to take over the day-to-day maintenance of these second homes. You can do little when you live hundreds of miles away. You can’t just leave and forget about that second home once your vacation is over. Who knows what can happen to that property when you’re not there?

Candy: A woman in Dallas has a second home in East Texas, very remote, and the thing BURNED — she didn’t even know it ’till she drove out there! What can the owners of vacation homes expect their concierge services to do for them?

Marcus: Basically, they do everything that you do for your primary residence. There’s the basic upkeep, of course, but they are also there to handle any emergencies. Maybe a front window gets broken. They’ll take care of it. If there’s a leak in your home, they’ll handle it. Need someone to open the gate for a furniture delivery? Your concierge has the keys.

Candy: What about handling rentals? Many owners of vacation homes rent out those homes when they’re not using them. Concierge services can help with that, too, right?

Marcus: Definitely. Good ones screen renters and set up their schedules. They collect the rent and arrange for cleaning afterwards. Plus, they check the home for damage after a stay.

Candy: What questions should vacation-home owners ask when they’re investigating concierge or property management companies?

Marcus: First, ask a company how long it’s been in business. You want to work with a service that has a lot of experience. The more experience a concierge service has, the more prepared it will be to react to any problem. Also, make sure to ask how long a concierge service has worked in your vacation-home market. You don’t want to work with a company that may have many years of experience but has never tried to rent out a condo or home in your vacation home’s neighborhood.

Owners should ask, too, for a complete rundown of concierge services’ fees and what services come with these costs. They should ask how a concierge company will market their vacation homes. That’s important when it comes to securing renters. Finally, ask services how often they’ll check on your vacation property. Ask if they’ll do a complete walk-through after each group of renters checks out.

Candy: Do you have anyone you recommend?

Marcus: There aren’t any nationwide concierge services so you need to find one near your vacation home. In Colorado, I can recommend The Grand Concierge in Winter Park and Frias Properties in Aspen.

Candy: Thanks, Marcus. This conversation makes me want to take another vacation. I think it’s time we checked out YOUR second home in Colorado!

If you have questions about buying, financing and maintaining a second home, feel free to contact Marcus McCue at 972-200-3380, marcusmccue@gmc-inc.com or on Facebook.

Those of us in real estate know that when the housing market plummets,  vacation places plummet the most. Second homes are most often discretionary purchases you wait on until you feel flush with cash.

Well, get ready. Realtors say second-home buyers are returning to the store,  shopping from Cape Cod to Lake Tahoe. As I told you, nationwide vacation home sales rose 7% in 2011 to 502,000 homes, according to the National Association of Realtors. They made up 11% of total sales in 2011, more than they did in 2010.  And NAR’s spokesman Walter Molony, who I hope to see in Denver next week at NAREE, expects continued momentum.

“We’ve heard positive reports from Las Vegas, Telluride, Col., Lake Tahoe, Naples, Fla., and some areas of California,” he told Investor’s Daily. “We’ve been seeing a little bit of unleashing of pent-up demand.”

Well yes, that plus bargain prices.

But while the number of transactions is increasing, vacation home prices are still not generally appreciating. The healthiest segment of the market is, surprise surprise, upper-end properties: the luxury market.

Neal Hanks, an Asheville, N.C. agent says he is seeing significant increases in sales of homes in excess of $500,000 in the Blue Ridge Mountains.

I hear the Florida market is even tightening up. No Girls Gone Wild, but firming. The recent death of my brother-in-law has me poking into the Naples market, where they own two homes. In nearby Sarasota, Manatee and Charlotte counties, inventory is just 4.7 months, the lowest since 2005.

In Southwest Florida,  broker associate Jennifer Calenda of Michael Saunders & Co., a luxury regional real estate firm affiliated with Ebby Halliday through Luxury Portfolio, says dollar volume sales are up. Prices are not going up, but people are buying about $100,000 over where they were — so folks looking at a $300,000 condo might spring for $400,000. Are people really feeling more flush, more confident, or just sick of depriving themselves?

Some feel people are getting back on their feet, paying off debt, and I think I read that American’s debt levels were decreasing. David Southworth, founder and CEO of Southworth Development, which specializes in upscale vacation-resort communities, says demand is coming back as people get on their feet.

“The second-home market is always a trickle-up type,” he told Investor’s Business Daily. “As the economy gets better that means small business owners start making money again and executives start getting bigger bonuses. And that’s when our customers come back.”

“During the past year, investors have been swooping into the market to take advantage of bargain home prices,” said NAR Chief Economist Lawrence Yun . “Rising rental income easily beat cash sitting in banks as an added inducement.”

The median vacation-home price was $121,300, down 19.1 percent from $150,000 in 2010.

The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.

Eighty-two percent of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat. Thirty percent plan to use the property as a primary residence in the future, while only 22 percent plan to rent to others.

Forty-two percent of vacation homes purchased last year were in the South, 30 percent in the West, 15 percent in the Northeast and 12 percent in the Midwest; Only 1 percent were located outside of the U.S.

They’re not all back. Southworth recently bought some communities on the cheap after the real estate bubble burst: Creighton Farms in Virginia horse country and most recently Willowbend in Cape Cod. Willowbend is doing the best, because of 8 million in metro Boston who can drive there. Most second home owners prefer to drive to their vacation homes, on average about 4 hours, but most often one or two.

Next week, I’ll hear more about Longcove at Cedar Creek Lake east of Dallas: 45 minutes east of Dallas.

The segment doing the best is the high end of the vacation market, this according to Brent Herrington, senior vice president of luxury developer DMB Associates.

“Inventory is much scarcer in the most desirable locations,” he said. “Prices are firming … we’re getting back to a world of multiple offers.”

Those amazing deals in the tops spots of the Hamptons, Martha’s Vineyard, Aspen and Vail peaked in hit in 2010-11. If you didn’t do it then, or are not quite in that league, look for the secondary markets — beachfront but not the name-drop locations.

After a few decades of recession, Palm Springs is becoming a hot second home market, beating out Santa Fe, say some realtors. And the developers are there to give buyers what they want: sun and out here, golf.

“We find our buyers appreciate all the things that Palm Springs and Indian Wells has to offer – the relaxed, resort atmosphere, no traffic concerns, friendly service, warm winters, incredible views and an abundance of outdoor activities, “ says Bill Bone, CEO and Founder of Sunrise Company, developer of Toscana, a golf community development in Indian Wells.

There is golf of course but also hiking, biking, farmer’s markets, as well as great shopping, dining, entertainment, the arts and medical facilities.

“Members have so much fun here, they call it “Camp Toscana”, says Bone. “We are very pleased with our sales results this year: have been 34 homes sold at Toscana, more than $59,000,000 in total sales.”

 

Palm Springs is within close proximity to sooo many Cali locales – less than 2 hours from LA, Laguna, San Diego, Palm Springs is brimming with mid century architecture, history and development.

“It appeals to people who really value properties of that era, and the new boutique hotels and restaurants keep things fun and interesting,” say Palm Springs agents Mark Godson and James Dalton Utsey. “The evolution of our downtown strip continues with the Fashion Plaza being rebuilt as a pedestrian friendly shopping and gathering place.”

 

Like many areas in California, Palm Springs was not spared during the housing bust, but values are beginning to inch up. Don’t have to worry about hurricanes here. Look carefully there are deals to be found.

 

Many consumers buy thinking they can rent out the home for cash flow and potential income, and they can. Vacation home rental listings are up at the website HomeAway. It had 433,000 listings in 2009, but 700,0000 listings now, says its vice president, Jon Gray.

Buyers are stirring, multiple offers are being reported, but there are no indications of appreciation. In some areas, prices are still falling. Do not be afraid to make an offer below asking: U.S. vacation home asking prices dropped 1.7% year over year in the 12 months ending in April, as overall listing prices fell 0.2%.

I do not advise buying a vacation home for pure appreciation. Just look for family enjoyment and maybe a place to rent out.

Still, some areas are seeing a tweak upwards when the distressed properties are all sold out. And demographics may be favorable for long term growth in vacation homes, with the average buyer age 50. There are 42 million people 50 to 59, right behind them are 43.5 million 40 to 49. Then there are 40.2 million people 30 to 39. These people grew up with vacation homes as common as swingsets and may follow their parents’ footsteps in buying.

 

TMZ is reporting that Terrell Owens took a bath on his Azure condo:

According to public documents, Owens paid $340,000 for the 2,600 square foot place back in 2006, right after he signed a $25 million contract with the Cowboys.

Owens no longer works in Dallas … and probably won’t ever work in Dallas again … so he put the place up for sale.”

I think they are wrong. Here’s the real story. Owens owns not one but TWO (2) units at The Azure, as I told you way back. He also owns a 2297 square foot townhome at the East Side Lofts on 1st Street. The smaller Azure unit on McKinnon, #307, is on the market for $279,000, price lowered from $325,000. The price per square foot is just over $300. This is a one bedroom unit at 881 square feet and while he may have paid $340,000 for that one, he bought both props in 2008. Yeah, pre-bust. But the condo he is probably most anxious to shed, and the ONE THAT IS SALES PENDING, is the big mama on the 20th floor that he had listed for $2,250,000 that is 3559 square feet with 6 garage spaces  This 3 BR, 4.5 Bath custom residence on the 20th floor comes with all those garages plus two storage spaces. There are three outdoor terraces with gas fireplaces, downtown views of the Dallas skyline, 10 ft ceilings, a loaded kitchen with built-in SubZero fridge, Miele gas cooktop and double ovens, etc. The Master suite features his-her seperate bath and closets, plus a sitting area and private outdoor terrace with gas fireplace. Best of all, the place has not been lived in much. This pad has been reduced to Holy Schnickers $1,600,000, and at that price, brings the price per square foot at The Azure for this essentially Ferrari property down to $449.56. And that’s if they got asking! 

But TMZ is right about one thing: If TO paid anywhere near $2 million for unit 2008 whenever, he is most certainly taking a bath. Actually, no, not a $56,000 bath but a million plus tsunami –that’s close to a million going bye-bye…

The Texas Rangers are going to be world champs for the second year in a row, I feel it in my bones! But Rafael Palmeiro, the Rangers former slugger turned real estate developer, might be wishing he could get back into the game and out of real estate. Palmeiro is now asking creditors in his bankruptcy case (says the Fort Worth Star Telegram) to give him five years to sell the 200 acres of undeveloped land near Grapevine Mills mall he had planned for a mixed-used development called Gardens of Grapevine.

Palmeiro’s creditors are owed more than $40 million, and $10 million of that is owed to Palmeiro himself, the “skin” he apparently put into the deal which has Branch Banking & Trust listed as the largest creditor at $19 million. According to the Fort Worth Star Telegram, Palmeiro negotiated loan extensions with three lenders last year, but in March, BB&T played hardball:

“BB&T “abruptly demanded $8 million cash to extend again,” and posted the property for foreclosure, pushing the development into bankruptcy, court filings said.”

Wow, that’s mean. Palmeiro and his wife, Mary Lynne, live in Colleyville. Stay tuned for the deets on that home. But they also own a home in in Pebble Beach, Calif., worth at least $10.5 million, they claim, which they say they will sell. (Hey, I know a great Realtor out there.) The Star-Telegram says they plan to make $2.5 million from the sale of the Pebble Beach property to make interest payments on notes until the Grapevine property, which fronts Texas 121 and Farm Road 2499, sells, hence the request for five years until the market turns around.

I did some digging in Pebble Beach, where I spent a week this summer at Concours D’Elegance. My sources tell me the Palmeiro Pebble pad is about 6,700 square feet, a stunning 1920′s Mediterranean complete with a wine cellar, three car garage, pool and guest house. It was originally priced at more than $12 million, but they snagged it in 2008 for $8,500,000. It may well be worth $10.5 million, but how do they expect to sell it in this market — and California real estate is not exactly flying off the shelves — for more than they paid in 2008? That’s a real head-scratcher.

Of course, my sources there do tell me that while the summer in Pebble was slower than my golf game, things have picked up.

Palmeiro is working to obtain liquidity: Gardens of Grapevine is under contract to sell 17 acres to Lincoln Property Co. for $6.9 million in February. And Lincoln has an option for another 17 acres. With luck and any sort of market turn-around, he could sell 192 acres to net as much as $46.3 million.

And more good news: a recent appraisal put the land’s market value at $55.2 million, up $2 million from an appraisal done a year ago, court filings said, as reported in the Fort Worth Star Telegram. Very encouraging, indeed.

Cinnamon Shore

This may be a great time to BUY a second home, but are banks, who make it hard enough to finance your primary residence, cooperating? The answer is yes, if you have good credit and a hefty down payment. But I have heard so many conflicting stories on the nuances of getting a second home loan, I decided to consult broker extraordinaire Marcus McCue of Guardian Mortgage. Is it true, for example,  that the home has to be a certain distance away, and that some banks would rather eat a Listeria-laced cantaloupe than make a second home loan. Raw land? Impossible,  Wells Fargo told me — too many underwater mortgages. So I needed to bring in the big gun, aka Marcus. He tells us the biggest challenge is defining just what a second home is. Here’s a secret: even Real Estate agents get confused:

It seems obvious what it means when you tell your REALTOR® or lender you’re buying a second home, right? If only that were true! Many surprised homebuyers have gotten part-way through the loan process and been denied before they discovered that their home cannot be categorized as a second home and cannot be financed as a second home due to the occupancy requirements for second homes.

1. The second home must be located a reasonable distance away from the borrower’s principal residence.

What is a “reasonable distance” can be up to interpretation. For example, if the property is a lake house or beach house, the property may be located less than an hour away from the borrower’s primary residence and still be acceptable to the underwriter as a second home. However, if you live in Dallas and are buying a second home in McKinney, the originator or their underwriter is likely to deny the loan as a second home and will require the loan to be processed and closed as an investment property.

2. It must be occupied by the borrower for some portion of the year

If the property is a second home, then this means the property will be occupied by the borrower for some portion of the year. This could be seasonal for those properties located in ski or beach areas, numerous times per month like weekend visits to a lake house, or periodically during the year like a home grandparents purchase near their grandchildren.

3. Financing is restricted to one-unit properties only

A duplex or other multi-unit property is categorized an investment property by conventional guidelines even if you live in it part of the year. The owner would be occupying only one of those units – with the other units leased to tenants – the financing on the entire property would be categorized as an investment.

4. The property must be suitable for year-round occupancy

A property that is only functional in one season like a hunting cabin with no heat will be denied.

5. The borrower must have exclusive control of the property (no timeshare or split ownership situations)

6. The property must not be a rental property or a timeshare arrangement

7. The property cannot be subject to any agreements that give a management firm control over the occupancy of the property.

Basically, see point #6. If you have an agreement where a management firm controls the occupancy, then the borrower does not have exclusive control of the property and the property is likely to be rented to tenants during the year.

Question: Does this mean you can never rent out your beach house?

The issue here is intent. The intent at the time of closing needs to be that the property will be owner-occupied and not rented. If the property is rented after closing or years later, but the borrower occupies the property themselves at some time of each year, then the loan is not fraudulent.

Question: What if you want to buy a house for your child to live in while in college?

In this scenario, the property is an investment property and not a second home. Your children are not you … so if they occupy it is not owner-occupied. There are very limited and specific scenarios where properties can be financed for family members as owner-occupied properties, but these are limited to disabled children and elderly parent situations.

If a parent is buying a property in a college town because their child is attending the college, then their intent needs to be that they will be occupying this property themselves when they visit the child in college: Not that the child will live as the occupant and they will have a room to stay in during visits.

Question: If you’ve determined that your home is not a second home, what are your financing options?

The options are primary residence, second home or investment property. If a property is not your primary residence and not a second home, then the only other option is investment property. Both primary residence and second home properties are in the “owner occupied” category. If the property is not owner occupied, then it is investment. Investment properties generally require more of a down payment and do not qualify for the same tax benefits as an owner-occupied home.

If you have additional questions about your particular mortgage financing situation, feel free to contact Marcus McCue at (214) 473-7944, marcusmccue@gmc-inc.com or find him on Facebook. Or email me and I’ll hook you up!

Get this: Austin has an unemployment rate of only 6.7%. That could be why, except for South Padre Island, Austin now has the highest priced median homes in Texas: $194,600, according to the Real Estate center at Texas A&M University. Sales of existing single-family Texas homes in August were up 24 percent from a year ago, according to the most recent Multiple Listing Services (MLS) data compiled by the Real Estate Center at Texas A&M University. More than 21,200 existing single-family homes were sold, data showed. The median home price was $153,200, about the same as a year ago, and the state’s overall inventory was at 7.4 months.

So why is our little sister city to the south, the one often equated with San Francisco, kicking butt in the real estate market? I reached out to my friends at Realty Austin, an Austin real estate firm. Here’s what agent Brittanie Flegle has to say:

Based on the latest financial news, one might assume that very few people are purchasing homes this year.  However, you might be surprised to know that in Austin, July and August home sales reached record highs.  In fact, July marked the best month for Austin real estate in over 2 years!  Here is a snapshot of the Austin real estate market as compared to one year ago.

  • $524,492,455 – Total dollar volume of single-family homes sold, 23% more than July 2010.
  • $196,750 – Median price for single-family homes, 11% less than July 2010.
  • 1,973 – Single-family homes sold, 32% more than July 2010.
  • 205 – Condos and townhomes sold, 45% more than July 2010.
  • 77 – Days on market, 5% longer than July 2010.
  • 2,808 – New single-family home listings on the market, 13% less than July 2010.
  • 9,393 – Active single-family home listings on the market, 20% less than July 2010.
  • 1,994 – Pending sales for single-family homes, 28% more than July 2010.

All of those total to a 32% increase in year over year home sales. This can be explained by the sharp decrease that occurred when Federal homebuyer tax credits expired on June 30, 2010. However, there are several other positive factors driving the Austin real estate market.  These include:

  • Record low mortgage rates
  • Stable home values
  • An unemployment rate of only 6.7%
  • A limited supply of new and resale homes for the 56,000 people expected to move in 2011

One great example of an Austin community that has seen lots of growth in the past year is Scofield Farms. Price points: $300K.  Located in North Austin, it has quickly become one of Austin’s most sought-after neighborhoods for new Austinites and their families.  Scofield farms realtor Jenny Walker agrees. “Scofield is great for families because it is a very close knit community.  Neighbors really look out for one another here.  Scofield is also within walking distance of great schools and near high-tech employers like Dell, Samsung, and IBM” Jenny says.

On the other hand, if you’re in the market to sell, keep in mind that there are 20% fewer homes on the Austin market than there were at this same time last year.  In short, this means significantly less competition for those selling homes.

After a challenging year in real estate, the Austin market seems to be back and holding strong.  How do you spell a healthy real estate market? JOBS!

Paradise Valley is like the Highland Park — no wait, make that Vaquero — of Phoenix.  Paradise Valley is in Maricopa County, home to twelve resorts, and one of Arizona’s top tourist destinations. Very pricey dirt: the median home price is about $2.74,  many homes exceeding $10 million, some over $40 million. So when there is a foreclosure, people drop their fingernail files.

And this one is a doozey. This sumptuous five acre estate at 5636 East Mockingbird Lane would be perfect for a man with, say, multiple wives. Or girlfriends. It has seven bedrooms, ten baths, for a total of 35,000 sq.ft. under roof, but relax: only 25,000 square feet needs to be cooled or heated. (Can you FATHOM the A/C bill?) Only two years old. Incredible amenities include flooring of six foot marble slabs (as opposed to 12 by 12 or 18 by 18 tiles, like the rest of us peons have) from Italy. The library has $350,000 Pierre Lang mahogany cabinetry, $1,200,000 Avia high tech security & sound equipment. There is a 13 seat mahogany theatre with movie projection and those D-box chairs that move with the movie action — I saw those at Robb & Stucky back in 2006 and wondered who the hell would buy them. The marble in this house must have cost a least a couple million to ship: the luxurious master suite has a bathroom with six foot onyx slabs and the boutique closets are so built out they resemble a Fifth Avenue department store.  There is a two-bedroom guest house of nearly 2,000 square feet, his and her’s libraries, his and her dressing rooms.  Oh, I can’t forget the $1.2 million security and sound system and its own solar electric generating station. Oh and not one, but TWO swimming pools, including a solar heated lap pool for frosty days. Did I tell you about the 21 car garage that would be Jay Leno’s dream? It has $400,000 finish-out — reminds me of former Dallas City Coucilman Mitchell Razansky’s garage on steroids: rubberized colored floor tiles, lights, lighted gas pumps. Of course there is also a billiard room, wine room, piano room, three family rooms — maybe one for each wife or girlfriend? Exercise room (only one), two libraries , a two bedroom guest house, outdoor marble walkways because cement is not fancy enough, and in case this home sucks all of the energy out of Maricopa County, it has it’s own solar electric generating station.

Goes without saying: lovely mountain views with ultimate security. Owned by M&I Bank, started at $17,900,000 now an REO for $15,995,000.

You know me, I just had to know more about this property. My first thought was that someone from like Bahrain had built it then fled the country. But no, no one from the Middle East built this palace. I had to dig and bugged my realtor friends in Phoenix and said, hey, who owns this? Turns out he is an All-American guy who went to West Point. (I’ll bet, not sure, but will bet he even played football.) And me thinks this is a strategic foreclosure. Which is really a business decision, I understand. And don’t tell me this is what brought down the housing market: multi-million dollar foreclosures are a very small piece of the market crash. More than 80% of the homes in foreclosure in Dallas County, for example, are $200,000 homes or less, and the story is not much different elsewhere. But I still think this is a very interesting foreclosure story.

So this home was built in 2009 by Cal Christiansen, big time home builder in the Phoenix area. The owners are listed as Phillips and Patricia Smith. Dr. Phillips Smith has been, since January, the Chairman of Lightwave Logic, which does something with high speed fiber-optic telecommunications and optical computing. Dr. Smith is actually brilliant, and has an amazing background in lasers and such. From the company press release: 

“Dr. Smith has over 35 years of experience with high technology companies serving as both chief executive officer and chairman, and in corporate officer positions at three Fortune 500 Companies.  In 2001, Dr. Smith brought TASER International, Inc. public through an IPO and most recently served as Chairman of TASER International, Inc. (Nasdaq: TASR) until his retirement from that position in December 2004. Dr. Smith subsequently resigned his TASER board seat in October 2006.  Since then, Dr. Smith has been actively involved as an investor in start-up companies.”

TASER — those guns all the police use to zap criminals and tame the populace. This guy was Chairman of TASER and his home was foreclosed!

Previously, he was Chairman and CEO of CAE Systems (sold to Tektronix Inc. for $75M in 1986), CEO and Chairman of EDGE Computer and CEO and Chairman of ZYCAD, a public company on NASDAQ.

Dr. Smith received his B.S. degree from West Point, an M.B.A. from Michigan State University and a PhD from St. Louis University.”

You can see where he has been able to finance his taste in big homes. What the heck happened with 5636 East Mockingbird Lane? It’s located on Mummy Mountain for God’s sake.

My theories:

1. The house is haunted.

2. The two owners got carried away, like when they brought in that Elvis statute in the theater office. (And TWO pools? 21 car garage? What is this, the next Concours D’Elegance?) They decided the house is too big, too muddled: a strategic default over bad aesthetics?

3. With all the rooms they built, they forgot the most vital: a room to play laser tag.

Like my friend Tom says, it appears the true hardship facing the previous owners of this bank owned beauty is deciding on Brazilian hardwood or Italian marble for their new digs.   My suggestion: bamboo, and who needs marble sidewalks?