Construction of luxury vacation homes and second residences near lakes in Kootenai County has increased sharply and buyers from across the country are getting in on the action.


Builders say the high-end second-home market started to take off about five years ago, and theres no end in sight to the trend.


Prices for new high-end homes now range between roughly $1 million and $5 million, says Jim Edwards, owner of Edwards Construction Inc., a Coeur dAlene contractor that specializes in building high-end vacation homes.


A few years from now, $5 million homes might be a bargain for those who can afford big luxury retreats that have at least 5,000 square feet of floor space, he says.


I see bigger and bigger homes continuing to be built, Edwards says. The $15 million to $20 million homes being built here arent in the distant future. Were just starting to experience the beginning of that type of home around here.


Exclusive developments in Kootenai County, such as Coeur dAlene developer Marshall Chesrowns Black Rock and his planned $125 million Ridge at Sun Up Bay project, are taking advantage of the demand. Developers say the areas natural beauty and relatively inexpensive prices, compared with far higher prices in places such as Lake Tahoe and Sun Valley, are driving the market.


The trend is showing up in statistics on valuations, sources say.


Kootenai County issued 486 building permits for single-family homes in 2004, down slightly from the year before, but the $114 million valuation on those permits was $14 million higher than the valuations on such permits in 2003, says Rand Wichman, the countys planning director.


I wouldnt be surprised if its up that much, or more, this year, says Wichman. We have seen a lot of high rollers.


He says he believes the increased total valuation is coming mostly from the building of luxury residences rather than from a general rise in residential housing prices.


Kootenai County doesnt track the number of luxury or second-residence homes being built, but Wichman estimates that 20 percent of the building permits issued for single family homes last year were for homes that would have more than 5,000 square feet of floor space. That compares with probably only 5 percent of the permits for single-family homes issued five years ago, he says.


Half of those homes will have people living in them for less than a month every year, Wichman says. The whole idea that vacation homes are being built to be used for a couple of weeks a year is amazing. Its shocking actually.


Many vacation homes are being built near the shores of Lake Coeur dAlene and Hayden Lake, where suitable sites are becoming harder to find, Wichman says.


The easy ones are built on, he says. It requires more careful monitoring on proposed house sites now to protect the environment from erosion. We have some folks who do a bang-up job and some who dont pay much attention, and frankly they need to get more attention from us.


Edwards says that because of the shrinking supply of lakefront lots, some people are buying multiple lots to accommodate larger homes. In some cases, buyers will demolish older homes and cabins to make way for bigger homes.


I would live in some of the stuff that people have knocked down, Edwards says. Its amazing.


Chesrown says hes not surprised that people from across the country are building luxury retreats in North Idaho.


I think that in the last couple of years, the area has been discovered, he says. In my opinion, property values have been undervalued, and theyre getting up to speed with the property values around the country. The market here has a lot of legs for a lot of years to come.


To date, more than 50 homes and cabins, an exclusive 18-hole golf course, and a palatial clubhouse have been built at Black Rock and roughly three-quarters of the lots in the development have been sold or spoken for, he says.


Chesrown asserts that people who own second homes in Kootenai County are valuable to the countys full-time residents.


The nice part about it is that these are property taxpayers that dont use community services because theyre here only part of the year, Chesrown says. They build expensive homes, and the full-time residents of Kootenai County get the benefit.


Many of the vacation homes are far removed from the lake cabins of 20 years ago, when minimalism ruled the day, Edwards says. Todays luxury retreats have special features that typically werent found in the homes being built then, such as giant fireplaces, wine cellars, small movie theaters, and bowling alleys. Many also have computer systems that control room temperatures, lights, and security features.


The materials are high-end, and there is a high premium on craftsmanship, Edwards says.


The clients are very involved, and most of them use design people, he says. Very little of the materials are bought off the shelf. Weve had an opportunity to use a variety of finishes and materials that most people dont see all the time.


The rest of North Idaho continues to see strong growth in the luxury home market. Sandpoint developer Joel Wahlin plans to sell 102 lots on Schweitzer Mountain, just south of the ski area, this summer to people who wish to build homes starting at about $400,000. Depending on lot size, the prices of the homes could be in the millions of dollars, and the average lot price is $175,000, Wahlin says.


I think these will be sold to the market that can live half the year here and half the year traveling in warmer climates, he says. The market here is more realistic than Sun Valley. We dont have the $15 million homes yet, but its probably coming.