Among the Rich, Many Mansions

It’s a damned nuisance, having the country club send announcements to the wrong residence. But, Rosamary Bogert said after a moment’s careful reflection, that could be the only downside to owning multiple homes.

In the same affectionate tone most people use to describe their children, she said, “We love each one of our homes.” Commuting between various parts of the country is no problem, provided you remember to bring the sterling when you move from house to house.

With addresses on Chicago’s Lake Shore Drive, in a Michigan resort town called Lakeside and in Osprey, Fla., the Bogerts are part of a growing group of well-to-do Americans who own and enjoy three, four and even five or more homes, sometimes on several continents.

Second homes, once the purview of those then-rare birds called millionaires, are soaring in popularity among an increasingly affluent population. Not to be outdone, an emerging segment of ultra-rich Americans is building real estate portfolios to rival its conquest of the stock market. The first step in attaining this kind of opulent profile is acquiring at least a third home.

Only a very narrow slice of America can think of owning many homes for personal use. But after years of exploding stock prices, that slice has widened considerably. “It’s like we’ve repealed the laws of scarcity in this world,” said Wellesley College economist Karl Case.

New York University economics professor Edward Wolff, a specialist in real estate statistics, said 4.48% of American households owned three or more residential properties in 1998, against less than 1% in the early ‘90s.

Third residences range from a one-bedroom co-op in Manhattan at $350,000--a cozy pied-a-terre for someone whose main home is in Boston, or on the West Coast--to a $20-million spread in the Hamptons. Property in that pricey part of Long Island is so hot that sales of million-dollar homes in 1999 more than doubled over the previous year. But for most third-home buyers, money is generally no object: Real estate agents in choice third-home spots like California’s Napa and Sonoma valleys complain of a dearth of inventory, not a lack of buyers.

The fact that third homes often are occupied for only a few weeks a year has spawned a small industry in destinations such as Deer Valley, Utah, where high school girls can earn $20 an hour for checking on unoccupied houses.

Economists say the rush for multiple homes is among the most visible reflections of the wealth effect, the huge purchasing power made possible by widespread participation in a flourishing stock market. Just since the end of 1995, said Case, the U.S. stock market has shown an appreciation of $8.5 trillion, more than the entire value of the United States housing stock.

Many buyers of third homes often have so much disposable income that they literally have to work to spend it. Whether or not it increases in value--and generally it does--real estate seems like a sensible investment. Residential real estate prices usually are less volatile than the stock market. And where home buyers of a decade ago were aiming for substantial growth in their investment, today many multiple-home buyers are seeking to safeguard astounding new wealth they have made on Wall Street.

Consider the well-known Americans who flit between multiple residences. Oprah Winfrey has at least four homes. Martha Stewart’s three abodes include a private island in Maine. Investment tycoon Henry Kravis has both a ranch and a ski place in Colorado, a home in Manhattan, a weekend place in Southampton, N.Y., and an island getaway in the Dominican Republic. Media wizard Ted Turner has a home in Atlanta, a plantation in Florida and a ranch in Montana. Having sold his place in Malibu two years ago, producer Steven Spielberg is down to just three homes: in Pacific Palisades, East Hampton, N.Y., and Brentwood.

Feinsteins’, Kerrys’ Multiple Manses

Along with their mansion on one of San Francisco’s most exclusive cul-de-sacs, Sen. Dianne Feinstein (D-Calif.) and her husband, investment mogul Richard Blum, have residences in Hawaii, Colorado, Washington and on a beach north of San Francisco. Another Democrat, Sen. John F. Kerry of Massachusetts, and his wife, Theresa Heinz, have a home on Louisburg Square, Boston’s most fashionable address, as well as a grand home in Washington, a farm near Pittsburgh, a place in Sun Valley, Idaho, and a house on Massachusetts’ Nantucket Island.

The national Social Register and magazines such as Vogue and Town & Country abound with the names of moneyed Americans who cavort at homes on several continents. For example, textile manufacturer Bob Baras and his wife, Francine, a psychologist, have homes in Manhattan, Long Island, Sun Valley and the south of France. Los Angeles compensation consultant Peter Mullen has a house in Brentwood as well as a castle in Scotland, a villa in Tuscany and a place in Big Sur.

“This is sort of proof positive” that the buyer has made it, said Nicholas P. Retsinas, director of Harvard University’s Joint Center for Housing Studies. “I’m not going to invite you up to show you my stock portfolio. But homes are a traditional way for people to show off their wealth.”

America’s 10,000 or more billionaires and untold numbers of Silicon Valley millionaires who crop up each day may think nothing of buying three or four homes. But in Los Angeles County, only 36% of households can afford to buy one typical home. Throughout California, a recent survey showed that housing affordability slid to 32% from 43% a year ago.

Retsinas said the move toward multiple domiciles has been fueled, “like everything else,” by technology. Executives who telecommute no longer require a home base, “one central place where you need to be,” Retsinas said. In fact, they may want many homes, all set up to function on many levels--right down to the 5,000-bottle wine cellars that are being built into 7,000-square-foot residences in Henderson, Nev., a popular third- and fourth-home destination.

At Lahontan at Lake Tahoe, where executives from Silicon Valley like to escape for working weekends, million-dollar home sites come with membership in a spa.

Owning three or more homes offers no tax break. Mortgage interest is only deductible on up to two residences, and, depending on circumstances, up to $1.1 million in debt.

Such technicalities are of scant concern to multiple-home buyers. Most pay cash, and despite their propensity to display huge wealth in a manner that some might consider ostentatious, most are fiercely private.

‘Very Worried About Security’

In San Francisco, real estate broker Birgit Hall said her office was seeing more third- and fourth-home sales. But her voice turned mysterious as she added: “Unfortunately, I cannot talk about it. Most of the people who are buying that sort of property don’t want the world to know. They are very worried about security, that sort of thing.”

Many purchasers shield their identities by forming trusts whose sole purpose is acquiring a particular property, Hall said.

Financial consultant Susan Bradley of Palm Beach, Fla., author of the new book “Sudden Wealth,” said one reason people buy so many homes is to try out new identities. “People are trying to figure out what it means to have all that money.” Spending money on new housing lifestyles “is totally not about money. Survival is way behind you. You did that. You’re looking to find out who you are.”

Southern Californians with house money to burn like their second homes on the beach in Malibu, Del Mar or Santa Barbara. For a third home, they go to the Sierras or Rockies. Northern Californians follow a similar second-home pattern, with spots on the beach in Carmel or north of San Francisco, according to real estate agents. For guaranteed weather, Northern Californians like Hawaii, while Southern Californians migrate to Mexico. Europe, said Hall, “is just too inconvenient.”

For brokers who serve this market, it’s a boom time. “Right now, it’s fabulous,” Hall said. “The real problem is, there are many more buyers than properties.”

Some high-end communities are attempting to fill that gap by building like crazy. One luxury patch under construction in the chic ski village of Deer Valley, Utah, features homes that range from $5 million to $8 million and average around 10,000 square feet. Elevators are standard, along with screening rooms, private gyms, lap pools and the all-important heated driveway that never needs a snow shovel.

The developer of one such mountainside mansion, listed at $7.5 million, assumes it will be a third or fourth home for a buyer who will live in it no more than 45 days a year. One Deer Valley real estate agent said she recently sold a third-home lot for $3.5 million.

“We’re getting a lot of people who have scored in the stock market and a lot of tech people,” she said. “These are buyers who’ve just gotten money suddenly, and it’s like, they don’t know what to do, so they buy houses.”

Pamela Fiori, editor-in-chief of Town & Country magazine, said that while in Sarasota, Fla., recently, she visited friends from New York who transported 800 bottles of wine from their second home in Venice, Italy, to their third home in Florida. “They wanted to be able to open some of their rare bottles among friends. It’s a very special thing.”

Along with finding a place to park their disposable income, Fiori said multiple-home buyers often are looking for a way to expand their social circles. “The fact is, once they went to Paris and stayed at a five-star hotel. Now they have an apartment there. It means they can settle in, develop friends, have dinner parties and go to dinner parties--at least in their fantasies.”

Writer/producer Elizabeth Braunheim of Santa Barbara said she acquired her third residence--a flat in a quaint section of Montreal--”to have an investment in life in a city I love.” In their sylvan moments, Braunheim and her daughters escape to their cabin at Tehachapi. Their place in Montreal, said Braunheim, gives them the urban experience.

Though she spends, at most, 30 days a year in Montreal, Braunheim believes it is advantageous to own, rather than to rent or stay in some fancy hotel. “The quality of your experience in a place is very different if you have a house there,” she said. “You get to know the shopkeepers, the neighbors, the restaurateurs.”

With two residences in Michigan and two in Florida, Brenda Hoyt said multiple-home ownership “makes you crazy.” There are bills to catch up with in every home, “and the maintenance drives you nuts.” While her husband, Jim, runs a metal-stamping business in Michigan, Hoyt said she has learned to keep “full sets of everything”--from Cuisinarts to Tabasco sauce--in every kitchen.

On Nantucket--where the most desirable country club carries a 20-year waiting list--real estate broker Lucille Jordan said most homeowners keep primary residences in “Boston, New York, Washington--that sort of power arena.” Since the charm and isolation of Nantucket seem less charming and more isolated in any season but summer, many power-arena islanders also own homes in Florida. Jordan said fourth-home destinations for this population include warm islands such as St. Bart’s, or ski resorts.

Jordan said she is not at all amazed that newly wealthy people are willing to pay $8 million to $10 million for a home on Nantucket they will then tear down and rebuild. “I don’t see it as all that different from the way wealthy people have always behaved. What I see is that there are more of them.” In any case, she added, “when people have the kind of wealth that we’re seeing in our time, it’s sort of like royalty. They have castles in different places.”

Just back from a real estate conference in London where third-home ownership was among the topics, real estate agent Michael Saunders of Sarasota agreed that the impulse to own many dwellings is as old as “our own dot-com royalty” is new.

An Ancient Parallel

“It’s also a way of balancing a portfolio,” Saunders said. “It’s a safe place to put your money while you enjoy it.

“You used to find people who scaled up. Now they just move around, or buy more. I don’t see any end to it, actually.”

Meanwhile, deep in the heart of Silicon Valley, at Palo Alto’s Congregation Etz Chayim, Rabbi Ari Cartun said he had been trying to make sense of a society where more and more people have no homes at all, while others think nothing of buying three or four dwellings. His puzzlement sent him to the Book of Amos, where “the wealthy got wealthier and the poor did not, just like in our time.”

Disgusted by the excess, Cartun said the prophet Amos talked a lot about smiting palaces. “He nails it. What he’s saying is, I will smite your summer houses and your winter houses.”

He read this passage not long ago to his congregants. Usually, he said, they’re pretty talkative. After hearing the words of Amos, they were uncharacteristically quiet.

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Times researcher Edith Stanley contributed to this article.