It might seem counterintuitive, what with all the talk about how our economy is in a nosedive, to embark on a new housing project geared toward new home prices starting at $500,000 and soaring to well over $1 million.

But Loveland developer Greg Muhonen, who heads Timber Wind Land LLC, is unfazed as he launches the Overlook at Mariana, a 67-lot new home development perched above the Mariana Butte Golf Course.

"Some people may call me a fool with my timing, but it is what it is," he said. "We will all collectively do our best to convince Northern Colorado that there's no recession."

Muhonen, whose previous projects include The Springs at Mariana, and his marketing partners at Re/Max Alliance in Loveland have done enough research on the loftier end of the region's housing market that they are confident it will support their efforts in blending maintenance-free patio homes with custom-built estates.

"There's a lot of risk involved, with all that capital up front," said Kirk Lussenhop, a broker with Re/Max Alliance who is collaborating with Muhonen and a few well-chosen custom-home builders on the project.

"And, our feeling is that there's certainly a large inventory of homes in the $700,000 to $1 million range, about 35 months' worth," Lussenhop said. "But you look around at projects like Harmony Club and Thompson Crossing, and those products are still moving. Harmony is selling well. There's a lot of money on the sidelines, still, and people will spend it for unique products in unique locations."

Of course, the new homes will not all sprout at once. Muhonen said he anticipates a buildout in three phases that will consume about six years.

He has teamed with two custom builders so far, and will be lining up others, with permits in the works that will lead to construction starts next month. Custom On-Site Builders of Fort Collins has pulled two permits and will be the first to put hammer to nail.

"They're anxious to break ground because they want to have something ready for Parade of Homes in September," Muhonen said of Custom On-Site, a perennial winner of the fall new-home showcase.

One feature that makes the Overlook project unique, and has engendered a small measure of controversy, is that all these upper-end homes will be locked away behind entry gates. For decades, Loveland has discouraged gated communities within its city limits.

"One thing we're banking on is our success in obtaining a permit to gate this subdivision," Muhonen said. "I didn't see it as particularly contentious. There was at least one councilor, the mayor, who had some strong words in opposition. But the council supported this."

Joining Custom On-Site on the project's first phase is PJL Homes, a small Loveland builder that Muhonen said had secured his respect with the work they did at The Springs at Mariana, where homes sold for between $475,000 and $800,000.

He is also talking with Fort Collins builder Jay Stoner, whose Eagle Ranch, Greenstone and The Hill projects have defined the upper end of the region's housing market.

"He hasn't committed, but we're in dialogue," Muhonen said. "We'd love to have him out here."

Muhonen said deliberation would be the key to the Overlook's success.

"There's nothing gained by creating a project with a bunch of empty specs," he said. "Timing and market will influence how this goes."



Editor Tom Hacker covers real estate for the Northern Colorado Business Report. He can be reached at 970-221-5400, ext. 223 or at thacker@ncbr.com.