Luxury homebuilders are doubling down on the Eastside’s high-end market, with speculative mansions fetching million-dollar price tags. Developers such as Xue Wei Investments, GIB Development, and JBeloff are leading the charge, banking on strong demand for ultra-luxury real estate.
Speculative, or spec, homes – built without a buyer lined up – are common in residential development but have traditionally been built with the median homebuyer in mind. However, as Eastside home prices climb, developers see an opportunity to capitalize on the luxury market, betting that high-end buyers will be drawn to these move-in ready estates.
Xue Wei Investments purchased 1.3 acres on Medina’s Gold Coast for $1.8 million in 2013 and built three estates on the land. The first two sold for $17.5 million and $10.8 million, while the third home was listed in October 2024 for $27.8 million. JBelloff, a family-run construction company, listed an $11.5 million waterfront home on Lake Washington in August 2024. The following month, a 4,035-square-foot property in Bellevue sold for $8.65 million in just eight days, attracting five cash offers. GIB Development also saw success, closing a $13.5 million sale on Mercer Island in November and preparing to list another speculative home in early 2025.
Medina’s 98039 ZIP code is the seventh-most expensive in the country, with median home prices at $4.5 million. Mercer Island’s 98040 ZIP code ranks 71st, with homes typically selling for $2.2 million. The state’s highest price home sale of 2024 occurred on Mercer Island, where a 10,030-square-foot estate sold for $28.5 million.
Despite high interest rates, the luxury market remains strong. Unlike traditional developments that depend on financing to sell, high-end homes – priced at $5 million or more – are largely purchased with cash, making them less sensitive to interest rate fluctuations. At the ultra-luxury level of $10 million and above, roughly 70% of transactions are all-cash deals. Because of this, luxury developers continue to build without buyers lined up, confident that the right purchaser will emerge for each unique property.
This post was based on information found on Puget Sound Business Journal.
Image: Andrew Webb, Clarity Northwest
