Opinion: What does the $34 million house say about Asheville?

Like just about everyone, I occasionally fantasize about winning a gigantic lottery and what I’d do with the money.

And yes, with the Mega Millions jackpot passing $900 million recently, I bought a ticket, even though a former editor once said to me, “I thought you were too smart to pay the ‘stupid tax.’” His point was, apparently your chances of winning are very small, and your chances of giving the state of North Carolina free tax money are very great.

Generally, people do not overestimate my intelligence. So recently, I paid the “stupid tax” and let my mind meander about what I’d buy.

One item decidedly not on my list? The $34 million home for sale in the Asheville area called “Deerhaven Gardens.” Oh, it’s a lovely estate, with a gigantic home and a smaller but still luxurious guest house comprising a total of 14,000-square-feet of living space.

It has six bedrooms and six bathrooms, seven half-bathrooms, a 50-foot “award winning infinity edge pool,” a “world class Har-Tru lighted tennis facility,” a fire pit next to a 30-foot waterfall — and three kitchens. Sure, it was merely the summer home of owners Marcus and Pearl Katz, who made their fortune in the student loan business, but it’s one magnificent manse.

The virtual tour on the real estate website is worth a few minutes if you want to see some true opulence.

By comparison, the Boyle estate in Fletcher, which henceforth shall be known as “Boylemore,” has three bedrooms, two bathrooms, a fire pit from Lowe’s that my son and I built in the backyard and enough land to hit tennis balls over the roof from the front yard to the backyard, a popular game with our kids when they were growing up. We also had one of those nice inflatable pools – the big round ones with about three and half feet of water, which I put up in the backyard during summer and plied with just enough powdered chlorine to keep from turning green.

Let’s call it our “finity pool.” I do have fond memories of throwing a pirate party for our youngest son when he was about 6 and holding a two-by-eight board off the ladder so kids would have to “walk the plank” blindfolded. They loved it.

If I do hit the lottery, first of all, you’ll never hear from me again. I’ll be traveling the world, seeing Ireland and Italy, going on African game-watching safaris and visiting every American National Park.

I guess my wife Grace and I will have to live someplace, and we may want a little nicer home, maybe one with some granite countertops and hardwood floors, instead of the wall-to-wall carpet our 13-year-old female basset hound thinks is a litter box. In her defense, as Molly will tell you in dog language, she has a well-documented kidney problem.

We’ve talked about this extensively and agree that we’d probably buy something that has about 3,000 square feet, with some nice views and preferably 10 acres or so for a basset hound/goat farm. I suspect we’d have to drop over a million bucks for that, but then we’d be set.

I don’t begrudge anyone making a good living, or even becoming rich. Of the various economic systems in the world, it’s clear to me that capitalism, for good and bad, offers the best chance to create a higher standard of living for everyone.

We do have a housing crisis here

But this house being for sale for $34 million dollars here in Asheville, it just seems, well, obscene to me.

Maybe it’s because I’ve written so much about the housing market in our fair mountain oasis, and how young people, especially, cannot afford to buy a home here, or often even rent a place. We have the highest rents in North Carolina, coupled with wages that do not keep up with many of the other metro areas.

And every quarter, homes become even more expensive. Consider the most recent quarterly real estate report from Mosaic Community Lifestyle Realty in Asheville, which states, “Despite interest rates being higher than the same time last year, strong demand and low inventory kept pressure up on home prices, driving them higher.”

Median home prices here just keep setting records, and this year is no exception.

“The median home sale price was the highest on record in Buncombe County at $465,000 in the second quarter of 2023, while in the City of Asheville, the median home sale price of $500,000 tied the previous record set in the second quarter of 2022,” Mosaic’s report states.

Let’s be clear here: most working class, younger people around here cannot afford those prices. That’s why so many people keep moving farther out, to counties with lower prices, or even to South Carolina and Tennessee.

U.S. Census data show the median value of owner-occupied housing units in Buncombe County for 2017-2021 was $273,900. And the median household income for that time frame was $59,699.

Meanwhile, the owners of Deerhaven Gardens say in a letter about their decision to sell that the “appraised cost of ‘recreating’ Deerhaven today is $40 million. Our ‘asking price’ is $34 million.” 

News station WYFF4 ran the letter, penned by Marcus Katz, in May.

Buncombe County tax records show the home, located at the top of Biltmore Park on about five acres, has a total appraised value of $6.3 million. These appraised values are notoriously low, however, and I suspect they do not take into account the incredible renovations the Katzes made, inside and out. The original home dates to 2003, although the Katzes made many of the renovations a decade ago.

Marcus and Pearl Katz made their fortune in the student loan business, according to an Asheville Citizen Times “Home of the Week” profile of the couple from 2015. From that article: 

“Originally from Atlanta, Marcus spent much of his adult life in California, where he ran what he said was the first company of its kind in the country to offer student loans directly to the public. (“I went out there with an idea,” he said.)”

Apparently, that idea translated into megabucks, allowing the Katzes to take an existing home and turn it into Deerhaven Gardens, their summer estate. The couple lives in South Florida in the cool months.

In the letter, Marcus Katz said as much as he loves Deerhaven, his wife convinced him it’s time to “pass the torch” to a new family.

“I’m speaking to you ‘today’ because we both ‘believe’…it’s our responsibility…to find ‘just the ‘right family’ — a family who’ll appreciate Deerhaven as much ‘our’ family and friends have over the years,” the letter states.

(Side note here: How can a person with such an infuriating dearth of quotation and ellipses skills have made so much money?)

Marcus Katz cited George Vanderbilt’s decision to locate the Biltmore Estate in Asheville and how he searched for years for just the right spot. The Biltmore Estate never acquired the Deerhaven property, however, which is south of Asheville, which Katz proudly points out.

‘Incredibly’…America is ‘just now’ beginning to understand the ‘many reasons’ George…chose…’Asheville.’ Katz wrote.

 I think folks found out about Asheville long before the past couple of years.

So yes, it’s sad they must part with their summer estate on a hilltop. I’m sure that, well…almost nobody living around here feels their pain.

‘It shows we are where everyone wants to live’

It’s interesting that Marcus Katz mentioned the Vanderbilts, as that mammoth 250-room estate, now on 8,000 acres, is a linchpin to our tourism industry here. And it illustrates how the uber-wealthy have been coming here since the railroad came through in the late 1800s.

I reached out to a former newspaper editor of mine, Larry Pope, who’s lived in this area since 1971, for some perspective. He first pointed out that he doesn’t know “how one person’s excess affects the average guy.

“I mean Asheville has had that disparity forever, dating to the Vanderbilts and Groves and Vances,” Pope said. “On some scale every city does. That $34 million house to me has much less effect than the $1 million three-bedroom rancher in North or South Asheville.”

That’s a fair point.

I also checked in with Barry Bialik, who develops moderately priced homes in and around Asheville and served as chair of Asheville’s Affordable Housing Advisory Committee. He too noted that Asheville and western North Carolina have always been popular with the wealthiest Americans, so he’s not surprised the Katzes chose to live here, too.

“It shows we are where everyone wants to live, and we’ve always been,” Bialik said. “We’re founded because this is where the Vanderbilts and really wealthy people wanted to have their escapes. I have no problem with it as long as there’s the other side of it — there are equitable things available for those who still live and work here.”

That’s where we’ve run into problems. We don’t have enough of that kind of housing, and a lot of developers don’t build it in part because they can make a whole lot more money building larger homes.

“There’s always going to be where there’s big industry or big money, there just needs to be the balance,” Bialik said. “And I wish more of the larger employers or those with a lot of the money were more part of the solution.”

I don’t know the Katzes. I made multiple attempts to reach them for this column, and if and when they’re available and want to tell me about all of their charitable work, I’ll be all ears. Perhaps they are delightful people who’ve donated gazillions to good causes.

Also, all the money they spent on the magnificent upgrades to the interior and exterior of the property undoubtedly boosted the economy — and the incomes of local carpenters, landscapers, builders, plumbers and other working folks. That’s always welcome.

I did ask to tour the home and use photos from the website, but I got shot down. A real estate contact for the estate, Valerie Sowell, said she sent my request to Pearl Katz.

“Unfortunately, neither Mr. or Mrs. Katz will be available until just after Labor Day,” Sowell said via email. 

Also, Sowell said, “No photos, articles, videos can be posted or used unless cleared by Pearl.

So if you do the article she would need to clear it first.”

We don’t allow sources to “clear” articles first, so here we are.

I did find an interesting December 2021 article in the New York Post that featured Pearl Baker Katz, with the headline, “Millionaires-only R360 club filters out ‘wrong people’ to stay ultra-exclusive.” Here’s an excerpt:

Member Pearl Baker Katz said it’s a relief to be among people who understand the peculiarities of being rich.

“I can have a conversation about exactly how much money I have, which you can’t have with most people out in the world. It’s a community,” said the 57-year-old, who winters with her husband, Marcus, on Fisher Island in Miami Beach, and summers in San Diego. Her fortune derives from the student loan business she founded by borrowing a million bucks from her then-boyfriend, which she parlayed into a company worth $144 million when she sold it in 2009. That was enough for her to retire at just 44.

Baker Katz apparently is one of the founders of R360, according to the Post article:

“It’s a safe space I can go to, and get help on anything I need in life, because we’re mentoring each other,” she said, noting that it was R360 connections that have helped her finesse plans for Deerhaven Gardens, the women’s rehab treatment facility she’s opening in North Carolina in January, having converting one of her luxury homes expressly for the purpose.”

Well, that does sound like a nice amenity for the community. WLOS-News 13 did a story on the alcohol addiction treatment center when it opened in May 2022.

At any rate, back to the lottery. I pledge that if I win a whopper, I will build a nice home with a small farm. OK, and maybe buy a lake house on Keowee.

I’ll set aside enough to live on for the rest of our lives, and then proceed to make some whopper donations to Asheville Habitat for Humanity, Homeward Bound, Eblen Charities, ABCCM and some others. 

But buy a $34 million house? Hard pass.

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Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. John Boyle has been covering Asheville and surrounding communities since the 20th century. You can reach him at (828) 337-0941, or via email at jboyle@avlwatchdog.  To show your support for this vital public service go to avlwatchdog.org/donate.