In 2005, the rich got richer for the third year in a row, according to Forbes' list, The 400 Richest Americans. They will need that extra money, because the priciest real estate in the country is also going up.
The average price of the properties on our list of the Ten Most Expensive Homes in America is up about 5 percent this year, to $58.1 million from $55.25 million. That's more than 216 times the average home-sale price as of August 2005, according to the National Association of Realtors. While that might seem expensive to most people, it's just one-tenth of one percent of Bill Gates' net worth, estimated at $51 billion. Meanwhile, your average American home-owning household has 32.3 percent of its net worth tied up in its home, according to the U.S. Census Bureau.
What makes the most expensive homes so expensive? For one thing, they are located in some of the most desirable parts of the country, concentrated on the coasts and in inland areas that we associate with great wealth, such as the Hamptons, Florida, Los Angeles and Lake Tahoe.
For another, they are often quite vast. We'd be hard pressed to even take an average, because we would have to factor in main houses, guest houses, staff quarters and spacious pool cabanas. The smallest main home on our list is 6,650 square feet, but it is part of a multibuilding compound on Miami's Star Island, with a total of 13 bedrooms and a 10,000-bottle wine cellar. One property has a carriage house that itself is nearly seven times larger than your average American abode — which is 2,349 square feet, according to the National Association of Home Builders.
But to reach an asking price that tops $45 million, a property has to be not just large, but very special indeed, laden with luxurious details and possessing some rare feature that would be difficult — if not impossible — to obtain in any other way.
The most expensive home on our list, for example, is a magnificent estate set on a practically unheard-of 60 acres of land in Bridgehampton, N.Y. — and far more. Three Ponds features a golf course designed by Rees Jones, its own pro shop, 14 gardens and three ponds stocked with fish.
The second most expensive property on the list has a feature that is historic as well as extravagant: The original ballroom at the top of New York's Pierre hotel, built in 1920. It has an 18-foot-high fireplace, spectacular city views and enough space for nearly 300 guests. You couldn't rebuild it for any amount of cash.
For our list, we sought out the priciest homes currently on the market. There may be others that are being shopped around privately at higher prices, and there are certainly homes that are worth even more — though they aren't up for sale. Larry Ellison, head of software giant Oracle, reportedly spent more than $100 million to create his Japanese-inspired palace in Woodside, Calif. Microsoft founder Bill Gates' family compound in Medina, Wash., has an assessed value of around $140 million. And as far as we know, he's not looking for buyers.
Which may be a good thing, since the pool of potential buyers is painfully small for such expensive properties, and they can linger on the market for months, and even years. That's why there are perennial entries on our list — the top two properties are the same as in 2004, for example. But the ranks have also changed a good deal over the past year. About half of the properties appear for the first time, including a $65 million Malibu estate that overlooks the ocean, and a pedigreed Manhattan townhouse that, at $50 million, is the most expensive in New York history.
They replace residences that have dropped off the list for various reasons. The home of late billionaire Marvin Davis, which was last listed for just under $60 million, sold for a reported $46 million earlier this year. Others houses were taken off the market, are being sold in parts (like the top floors of Trump World Tower in New York) or had their asking prices slashed and no longer make the cut.
But sometimes the opposite happens, and a home that has been on the market for years just keeps increasing in price. The Robert Taylor Ranch, in Brentwood, Calif., was once owned by the late film star and has been on and off the market for years. It reappeared in 2000 with a price tag of $29 million. By the time our 2004 list rolled around, the asking price was $50 million, and this year it was jacked up to $60 million.
Will these houses sell for their astronomical asking prices? Two things are certain: One, at some point in the future, a house will go on the market for more than the current $75 million record; and two, billionaires didn't get rich by throwing their money around. If the homes of most billionaires are anything to judge by, even the ultra-wealthy might find the thought of spending $75 million for a house too rich for their blood.