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Sale of the Week: A Winnetka Builder Weathers the Storm

List Price: $1,595,000
Sale Price: $1,485,000
The Property: Never mind the house pictured here. It’s gone, demolished on March 5th, two days after the Winnetka-based Heritage Luxury Builders closed on its purchase of the site. The lot is first-rate: just under half an acre in east Winnetka, surrounded by impressive homes—both old and new—and with lakefront parks one and three blocks away…

List Price: $1,595,000
Sale Price: $1,485,000
The Property: Never mind the house pictured here. It’s gone, demolished on March 5th, two days after the Winnetka-based Heritage Luxury Builders closed on its purchase of the site. The lot is first-rate: just under half an acre in east Winnetka, surrounded by impressive homes—both old and new—and with lakefront parks one and three blocks away.

Heritage is already marketing the replacement it will build on the site, a 14-room, 10,000-square-foot house with a brick exterior and a slate roof. Inside there will be six bedrooms, seven full and three half baths, a movie theatre, a wine cellar, and six fireplaces. The price tag: $3.975 million.

Unlike other builders, Heritage hasn’t been a victim of the glut of new home construction. It closed sales of three new houses in Winnetka between December 5, 2008, and January 8, 2009, for prices ranging from $2.45 million to $3.5 million. Another house is scheduled to close March 31st, for $3.15 million, according to Steven Aisen, one of five family members working at the six-person company started by Leo and Milena Birov 20 years ago. Those sales cleared out Heritage’s Winnetka inventory—though there’s still one unsold in Glencoe, priced at $3.775 million—which explains this recent teardown.

“We need a presence and inventory in the village when people come looking,” Aisen explains. The company bought another Winnetka lot in January, for $1.5 million, he says, and may buy more this year. From 2002 to 2006, the company annually built 10 to 12 houses on spec, all but a few of them in Winnetka and Glencoe. Aisen says that the rate now is more like two spec houses a year, with more homes custom-built for contracted clients.

With its many teardowns, Heritage has played a key role in a large-scale transformation in Winnetka’s housing stock. Last year, village officials said that one in ten houses that existed in town prior to 2000 had been torn down by 2008.

Aisen says the credit crunch hasn’t impacted Heritage’s plans, because the company self-funds its projects, using proceeds from past sales to pay for the next house. Tightened lending has, however, impacted clients: while the buyer of a $4-million house could put down just $1 million a few years ago, now the banks expect a down payment of as much as $2 million for a purchase that size, Aisen says.

Price Points: The company’s three recent and one pending Winnetka sales are each only 9 or 10 percent below the original asking prices of the houses—indicating that Heritage has not had to slash prices to offload inventory. Also, Aisen pointed out that about a year ago, when the house it is now replacing was for sale with an asking price of $1.8 million, his firm offered $1.62—and was rejected. In November, the sellers, James and Deborah Caruso, who had owned the house since 1990, accepted Heritage’s latest offer—which was $140,000 less than its earlier offer. The Carusos could not be reached for comment.

Listing Agent: Howard Meyers of Baird & Warner, 847 881 2313; howard.meyers@bairdwarner.com

Photo courtesy Heritage Luxury Builders

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