Street of Unfulfilled Dreams : Million-Dollar Showcase Homes Still Stand Vacant

A year after its splashy debut, a developer’s dream neighborhood in the Escondido hills stands vacant--a wonderland of faux granite walls and waterfalls where nobody wants to live.

When the so-called “Street of Dreams” was built last year as a promotion for area craftsmen, about 50,000 people paid $7 each to ogle the seven elaborately furnished custom homes with names like “Palazzo Classico” and “Paradisio.”

The throngs walked over marble floors and under gold-plated chandeliers, saw all-encompassing entertainment systems, and a Chinese bathroom sink worth $1,200. From the windows, they saw bird’s-eye views of the rugged countryside and the Lawrence Welk Resort.

But no one bought.

Dismayed developers slashed up to $600,000 from their prices, which originally ranged from $1.3 million to $1.8 million. Now the houses are on sale for between $995,000 and $1.4 million. Still nobody has bought, although an offer is pending on one house, a saleswoman said.

Anxious about the stagnant sales, Escondido home-builder Robert Crowe discounted “Palazzo Classico” and “Paradisio” to $1 million each, down more than $350,000 from last year. With construction payments coming due, he says he’s eager to unload them.

“Otherwise, I’m in deep ca-ca,” said Crowe, one of five builders involved in the project.

Behind the fancy street is a Seattle-based promotions company called Street of Dreams Inc. Since 1985, the company has orchestrated about 40 dream streets in the United States and Canada, said president Dave Straughan. The company chooses an area, enlists builders, decorators and landscapers to create and decorate the fantasy houses, and then aggressively markets them.

“We create a promotion wrapped around these beautiful homes, have a seven-week (tour) and then we go away,” said Straughan.

Although less than 1% of the oglers can actually afford the homes, Straughan said people readily pay for a look. They also get to vote for their favorite houses, which later get awards based on the elections.

“It’s a chance for people to go into beautiful mansions that are furnished with everything--fine art, fine furniture,” Straughan said. “They get to walk in the front door of a house they only dream of just driving by.”

Those admission fees, he said, keep his company alive. Meanwhile, the builders and others promote their companies and get access to buyers.

But the strategy has failed so far on Street of Dreams, Escondido--the first such venture in Southern California. Straughan says a bad economy and a somewhat remote location have slowed sales, but probably not doomed them.

“If we had done it 12 months earlier, all the houses would have sold,” he said. “Twelve months from now, they may be selling.”

Despite the stagnation, Crowe doesn’t blame the promoters. Given the chance, he says he’d do another Street of Dreams.

“It wasn’t the show. It was the economy,” he said. “It’s bad.”

Escondido’s Street of Dreams is actually a cul-de-sac, called Crystal Ridge Drive, at the top of the Rimrock development, a gated community owned by the Welk Real Estate Group.

Straughan said the Welk Group welcomed the Street of Dreams, selling lots to builders for the promotion in hopes of exposing potential buyers to available property it owns nearby.

Experts say the Street of Dreams nightmare is not unique. Except for a few pockets in Northern California, mansions just aren’t moving, said John Karevoll, spokesman for Dataquick Information Systems, which gathers real estate statistics.

He said the million-dollar home market in San Diego County is 25% slower than one year ago and about 35% slower than two years ago.

“That (Street of Dreams) was poor planning or bad luck I guess,” Karevoll said. “I think that right now everybody’s kind of waiting things out. Anything that is not essential buying is falling by the wayside.”

Meanwhile, Crowe said, the builders are worrying about having to refinance their construction loans or let the banks repossess the palaces. Actually selling them is starting to seem like, well, a dream.

“I get ridiculous offers from the bottom feeders,” Crowe said. “Since (the home tour) it’s mostly been people seeing what they could steal.”