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Lake Minnetonka Crushes 2018 Luxury Home Market

The list of top home sales in Minnesota this year is a stunner.

After a decade on and off the market, the most expensive listing in the state finally became its top sale – and its most expensive teardown.

In all, three of the top 10 sales are teardowns, to be replaced by one or more new homes.

Lake Minnetonka reinforced its reputation as a luxury market in a league of its own, with all but one of the top sales involving lake property.

Coldwell Banker Burnet’s Wayzata office dominated the list of transactions. Veteran agent Ellen DeHaven played a role in seven of the top 10 deals — and many that didn’t make it.

“Yes, it was a record year, with $80 million in sales,” said DeHaven. “I’m too busy to celebrate right now.”

DeHaven said she got into the business four decades ago, when agents kept paper listing sheets in three-ring binders. Now you can take online photo tours through all the top homes just by clicking a link.

Let’s start at the top.

Southways, the Lake Minnetonka estate best known as the former Pillsbury mansion, sold for more than $23 million, nearly hitting its $24 million asking price. The sale came only after the sellers agreed to level its historic 32,461-square-foot mansion and split its 12.72-acre estate into five lots. In the end, the estate at 1400 Bracketts Point Road in Orono will see three new houses, while a neighbor has bought two lots to expand his property.

“We tried our darnedest to find someone to embrace its history,” said listing agent Meredith Howell of the Coldwell Banker Burnet Wayzata office, who led the effort for several years. James and Mary Jundt, who bought the property in 1992 for $5 million and invested heavily in renovations, eventually retired to Arizona. They paid more than $500,000 a year to cover taxes, utilities and operating costs. Finally, the discussion of a sale turned to redevelopment, said Howell, who brought in colleague Brian Benson to share his expertise in land development.

“The time had come,” she said. “We tried our best.”

Howell, Benson and DeHaven all played roles in the multiple transactions involved in the sale, some of which haven’t closed and all of which are confidential.

The high prices and teardowns on the list are the most dramatic evidence of Lake Minnetonka’s evolution as a luxury community, said John Wanninger of Lakes Sotheby’s International Realty in Edina. Today’s buyers want new construction and aren’t really concerned about resale value.

“When somebody’s got the money to buy that, they want what they want,” he said.

Building permits don’t reflect the true cost of new homes, so there are no statistics on what’s being built. But Wanninger and other agents predict price tags of $10 million or higher for new construction will be seen more and more in the future.

Perhaps just as interesting as what made the list is what didn’t.

St. Paul didn’t make the cut. Neither did Edina. The Lake of the Isles didn’t cause so much as a ripple. The only sale in Minneapolis that made the list was a $4.6 million private downtown condominium deal tied for the last slot.

“There’s kind of a pause button that’s been pushed on downtown condo sales,” said Cynthia Froid of Keller Williams Realty’s Integrity Lakes office in Minneapolis, who had a $4.23 million condo sale that just missed the list. After years without new product, the opening of The Legacy this fall put 400 new units into play. With two more projects in the works, buyers now have the upper hand and sellers are making upgrades to stay in the game, Froid said. It could take years to see which ones succeed.

Overall, luxury sales in the 16-county Twin Cities metro remain a tiny but strong part of the market. In the 12 months ending in November, sales of homes priced at $1 million or more rose 13.8 percent over the previous 12-month period, according to the Minneapolis Area Association of Realtors.

Luxury sales for all of 2017 totaled 638 sales, up 29.9 percent over the 491 sales in 2016. Homes priced at more than $1 million make up just 1.2 percent of all the homes in the metro area, where the median sale price for homes is $264,100. Home sales priced at more than $1 million represent 700 of the 59,510 homes sold in the 12 months ending in November, up from 615 of 61,373 homes sold the previous 12 months.

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