What Kind of House Will $100 Million Buy?

Call it quaint, but there was a time when a $75 million house made news. In 2005, that's what happened when the Three Ponds Estate in Bridgehampton N.Y., landed at the top of our list of most expensive homes in the U.S.

No more. That number is practically pocket change compared with what the market currently bears.

This year, the country's priciest properties include a $135 million Aspen, Colo., ranch and a $125 million Versailles-inspired estate in Beverly Hills, Calif.

Why such price acceleration in the top-flight market? The simple answer: a good mega-mansion is hard to find.

"Try to find eight or 10 acres in the middle of the Hollywood Hills," says Mauricio Umansky, a broker at Hilton & Hyland. "God's not making any more land. [Trophy properties] are a true microeconomy with much less supply than demand."

In addition, the financial muscle of flush buyers allows for quite a bit of upward price flexibility. Twenty percent of a household's wealth consists of home equity, according to the National Association of Realtors. Following that logic, steel magnate Lakshmi Mittal -- worth $32 billion -- could easily afford $6.4 billion in housing.

"The net worth of the buyers and the sellers is such that they can do whatever they want," says Joshua Saslove of Joshua & Co., an Aspen-based affiliate of Christie's Great Estates. "The rules of the regular real estate market don't apply."

Sellers who find themselves able to piece together huge pieces of land in desirable locations can expect large listings.

Gigantic Gems

The latest addition to the $100 million-plus club is Suzanne Saperstein's Los Angeles jewel aptly named the Fleur de Lys. Listed at $125 million and built in the style of Louis XIV's palace at Versailles, the 45,000-square-foot home took five years to construct following the accumulation of five acres in Beverly Hills during the 1990s by Saperstein and her now ex-husband, billionaire David Saperstein.

In Florida, beachfront land drives the highest-end market.

"There's nothing under $20 million that has 120 feet of ocean frontage in Palm Beach," says Cristina Condon at Sotheby's International Realty. "[Trump's house] has 475 feet on the ocean."

While it's not news that private jets and telecommunications make the world smaller, an increasing number of buyers for trophy properties are international. This, says Peter Kozel, executive managing director of Newmark Knight Frank, an international real estate appraisal firm, "is easy to understand in light of the cheap dollar."

Hot Holdings

What better place to develop a foothold in the U.S. than in the most desirable neighborhoods of Malibu, Aspen, Palm Beach or the Hamptons?

"Trophy properties can serve as a branding for big, new money," says Dolly Lenz, a broker at Prudential Douglas Elliman. "For a Russian oligarch, a trophy home in New York or Palm Beach is a way to brand themselves in the U.S."

As a result, brokerage houses are ratcheting up their efforts to reach out to potential buyers all around the world.

"International marketing has been very good for our [Florida] properties," says Condon. "We advertise in Russia, Asia and the Middle East."

But problems can arise when it comes to verifying those international buyers. In order to schedule a showing of a $65 million or $125 million home, brokers need to know you can afford to buy the house beforehand. If you don't appear on the Forbes billionaires list, a simple note from a Swiss banker will do.

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