'50 Shades of Grey' apartment building red hot

The view from the living room of the biggest penthouse in the Escala apartment building in Seattle. 'Fifty 

The "Fifty Shades of Grey" books have made British author E.L. James very rich. They have also made a certain Seattle apartment building red hot.

Ever since the trailer for the "Fifty Shades of Grey" movie came out last month, Erik Mehr's phone has been ringing a lot.

Mehr is the real estate broker for the "Fifty Shades apartment."

Yes, the upscale apartment building in Seattle where fictional billionaire Christian Grey lives -- and does lots of kinky things -- actually exists. It's called Escala.

Related: 'Fifty Shades of Grey' trailer

It's overwhelmingly women ages 19 to 50 that call Mehr's firm, begging to spend a night or two in the famous penthouse or, at least, get their photo somewhere in the building.

"Our silly phone calls have spiked again where people want to rent the room," Mehr told CNNMoney. "I don't think they realize that this is a condominium building that residents live in and there is no red room."

E.L. James heard about Escala, which was completed in 2009, and wove it into her story, although she did take a number of liberties. For example, there isn't a helicopter landing pad on the roof.

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Escala had to increase its security measures since the first book came out in 2011 and fans became a little too eager to get close to "the apartment."

The most expensive penthouse at Escala doesn't have a red room. A family from Oregon bought it in 2013 for $6.2 million.

But the building does have some famous people with ties to the building. Escala has had as many as three Major League Baseball players as residents. San Francisco Giants pitcher Tim Lincecum owned one of the "sub penthouses," but he sold it earlier this year.

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While the "Fifty Shades" trilogy and movie have caused some headaches for Escala residents, there have also been perks.

E.L. James gave a private book signing to building residents, according to Mehr, and the film crew took shots of Escala's exterior (with the owners' consent) that are likely to appear in the movie.

But the greatest benefit of all has been the skyrocketing home values since the book's release.

According to real estate website Zillow (Z), the median sales price for a Seattle condo has risen about 10% since 2010. The median sales price for Escala apartments, however, have surged over 75%.

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Only six apartments remain unsold in the building. Most are going for around a million.

Still, Mehr attributes the phenomenal rise more to the improving economy and Seattle's rising popularity than the book.

"Most of the unit owners are like you may expect -- they're business people or a bit older, so the book wasn't on their radar," says Mehr. "For the most part, they would rather downplay where they live."

But it's notable that much of the price jump occurred since the first "Fifty Shades of Grey" book came out in the spring of 2012. The median sale price rose 62% since then, according to Zillow.

That's the kind of economics ruthless businessman Christian Grey would likely approve of. 

Zillow buys Trulia for $3.5 billion

By Les Christie  @CNNMoney July 28, 2014: 3:03 PM ET

The two biggest names in online house hunting -- Zillow and Trulia - are joining forces in a stock deal valued at $3.5 billion.

Trulia shares jumped 12% on the news that it's selling to Zillow.

Zillow will continue to operate two separate websites, where consumers can search listings of homes for sale. Zillow and Trulia together attract more than 130 million visitors a month.

Both companies post detailed listings of homes for sale, and charge agents to post their names alongside their listings. Some agent teams spend $20,000 a month with Zillow, Trulia, or both.

Still the websites' revenue only add up to about 4% of the $12 billion the real estate industry spends on marketing via newspaper and television ads, billboards, direct mail and the like. Zillow CEO Spencer Rascoff sees an opportunity to capture more of those marketing dollars via mobile.

"Mobile is becoming the medium of choice for home shopping," said Rascoff.

Trulia's current CEO Pete Flint will continue to head Trulia's operations and report to Rascoff.

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The two real estate portals have transformed the housing market over the past decade by making information that was once only available through realtors easily accessible to consumers. The sites have made the home buying process much more transparent and stripped real estate brokers of their traditional role of gatekeepers of information.

Zillow, for instance, has its own home value algorithm called Zestimates. Trulia offers extensive rankings on crime, public transit and schools.

 

Zillow CEO: Why Trulia is worth it

The ultimate fear: Zillow and Trulia could make brokers irrelevant.

The new Zillow will still have plenty of competition from other sites such as Realtor.com, Homes.com as well as from Coldwell Banker, Re/Max, Century 21 and other real estate brokers.

But it will give the combined company the leverage to charge realtors more, said Steve Murray, editor at Real Trends a real estate communications and consulting company.

Related: Mansions for under $1 million

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Shopping for million-dollar homes comes with perks

Jack Cotton, a realtor in Cape Cod, Mass., will take potential buyers out on his powerboat. He works with properties on the high end, which he defines as the top 10% of the market.

"That's kind of our secret weapon," he said of his boat. His clients enjoy cruises of the nearby inland waterways to "experience the lifestyle of being here."

He mentioned his counterparts in Colorado will take their clients out skiing, and Manhattan realtors take potential buyers out in limos.

Ken DeLeon, a realtor in Atherton, Calif., the highest-earning zip code in California, recently took delivery of his own private plane. He uses it to give buyers -- particularly overseas investors -- aerial views of what could essentially be their next backyard.

California real estate agent Ken DeLeon speaks to clients in front of his new private plane.

But a plane isn't the only way to give clients a birds-eye view of a property.

Realtors are now using drones, and drone technology, as a way to stay on top.

"The high-end market is very competitive," said Colette Harron, a real estate agent in Essex, Conn. "So whatever it takes." Her company recently used photographs taken by a drone to showcase a large, multimillion-dollar home in Connecticut. The drone was able to capture the stunning water views of nearby Long Island Sound.

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Buyers in the well-heeled River Oaks neighborhood of Houston are offered something new from builder Al Ross, who's putting up several large houses in the $4 million to $5 million range.

He includes a personal concierge service with each home. Good for one year, the service includes seasonal flower and plant renewal, cleaning of the home's exterior and gutters, touch-ups to walls that are scuffed or scraped, and other services.

Clients "want to know that you are there for them when they need you," Ross said.

Each home also comes with a three-year warranty on its construction. If anything breaks, he'll fix it, no questions asked. "It's no different than buying a very luxurious car," he said. "You expect everything to function properly."

Picnic, anyone? Realtor Jack Cotton said boating is part of the lifestyle in Cape Cod, Mass.

For others, selling a high-end property is about creating an experience, and making a buyer understand the lifestyle that comes with a certain property.

Los Angeles realtor Eric Lavey used to produce sleek, narrative-driven videos with professional actors that gave potential homeowners the ability to see what life might look like in the properties he markets, which usually go from $10 million and up.

Now, he says, the market is so hot he doesn't have the time to create videos, and instead focuses on getting his clients properties with the two must-haves for his area: views, and a substantial master bathroom.

Related: America's top-earning zip codes

But wooing the potential buyer may take more than that.

Michael Meier at the Meier Group in New York City goes truly over the top when it comes to imagining a certain lifestyle. In a recent shoot for a downtown loft, he added a scantily-clad lingerie model to the scene. In one shot, she relaxed in bed with two male models.

"People dress themselves in jewelry to make them look good. I dress homes in beautiful people to make them look good," Meier said of the shoot, in a recent video on his website.

Related: Crazy requests for the luxury concierge

Meanwhile, Cape Cod realtor Jack Cotton said he doesn't believe in staging for the high-end buyer because "it's not real, it's contrived, it's pretend ... people in the high end don't want to be played," he said. "They want the truth." He doesn't even believe in the old trick of baking cookies before a home's showing.

He contends that it all comes down to knowing the buyer.

"You have to adapt to the market that you're in," he said. 

Home prices jump nearly 11% in April

Home prices jumped nearly 11% in April , and are now up more than 22% from the bottom three years ago.

Still, they are 18% below the peak set in July 2006, according to S&P/Case-Shiller. And price gains are slowing.

"Although home prices rose in April, the annual gains weakened," says David Blitzer of S&P Dow Jones Indices. "Last year some Sunbelt cities were seeing year-over-year numbers close to 30%, now all are below 20%."

Low mortgage rates, which the Federal Reserve is expected to keep reined in through mid-2015, and gains in the job market should continue to help the housing market, according to Blitzer.

But don't get too comfortable.

Home sales are being supported by all-cash buys and low supply, said Blitzer. And he says qualifying for a mortgage is still a problem.

"First time home buyers are not back in force," he said.

More homeowners becoming landlords

Low mortgage rates and soaring rents have convinced a growing number of homeowners to hang onto their former homes and become landlords instead.

"Clients tell us all the time, 'We're never going to sell our home, even after we buy a new one,'" said Glenn Kelman, CEO of the brokerage, Redfin.

Susan Young of Lawrence, Kan., refinanced the mortgage on her house in 2013, landing a 3.25% rate on a 30-year fixed loan. She bought another house but has not put her old home on the market.

"If the interest rate was high, I'd sell," she said. "But this is such a perfect loan package, I just can't bring myself to give it up."

She gets $1,100 a month in rent, several hundred dollars more than her expenses, and is using the profits to pay off her mortgage.

Related: Buy vs rent: What you'll pay in 10 biggest cities

Redfin reports that 19% of current homeowners either purchased or refinanced homes between 2011 and 2013 -- when rates were historically low falling just below 3.4%.

Chris Cannon and his wife currently live in Mt. Lebanon, Pa. and plan to move to start a family. But he will a hard time letting go of his home.

"It would be incredibly hard to give up the 3% mortgage we have," he said. "When we bought in November 2012, rates were at the bottom -- about 3.4% for a 30-year -- and we paid a couple of points to get ours down to 3%."

He figures he can rent his home in Mt. Lebanon for $1,400 to $1,500 a month, easily covering his mortgage payment and taxes which total $1,100 a month.

The math works in most landlords' favor these days. Rents have risen by about 20% nationwide since mid-2006, the housing bubble peak, while home prices are still about 21% below what they were at that time.

For people who are still underwater on their mortgages and unable to profit from a sale, renting helps soften the blow.

Related: Millennials squeezed out of buying a home

Juliana Ruiz and her husband Mauricio Jimenez bought their three-bedroom Pembroke Pines, Fla., home for $362,000 in June, 2005 when the market was red hot.

They opted for an adjustable rate mortgage, which turned out to be a great deal: rates have plunged, as have their mortgage payments. Now, they pay a 2.75% rate and owe $250,000 on the home, which is worth about $300,000 thanks to a recent surge in home values.

But since they now have three children and both Juliana and Mauricio work mostly from home, they needed more room.

They bought a six-bedroom home nearby and have been renting their old place out for a year.

"The local real estate market allows me to cover the mortgage and small incidentals with the rent collected," said Ruiz. "At the same time, my property value is increasing."

If the mortgage rate starts to climb, they'll consider selling. By then, they hope they will be able to sell for a profit.

Of course, there are downsides to becoming a landlord. Owners have to make repairs, deal with tenants and cover expenses, even when the property is vacant.

"[Being a landlord is] definitely not for someone who hates spending money on plumbing repairs and new locks," said Young.

Related: How to win a bidding war on a home

And some tenants can be demanding, say if the water isn't hot enough or the air conditioning not cold enough.

"Tenant happiness is important to me and I try to give them whatever they ask for -- within reason," she said.

The surge in landlords is working out well for most owners, but it is taking a toll on the housing market, according to Kelman. Every home converted into a rental property is one less that goes on the market. And in hot real estate markets these days, very few homes are up for sale.

"It's a major reason we have low inventory and limited sales growth," said Kelman.