At $3 million, a lakefront penthouse is the most expensive listing in Duluth in decades

DULUTH — The penthouse of a new luxury condo complex on Lake Superior will have million-dollar views times three: It's set to list at $3 million, making it the most expensive residential listing in Duluth in at least the last couple decades.

The Breakers on Water Street will be a 10-unit concrete building meant to withstand the lake's volatile waves and increasingly extreme storms. Tucked between Beacon Pointe resort and a row of single family homes, the building will undergo construction this summer and is being developed by Duluth's F.I. Salter Real Estate for $17 million.

"The location is attracting people from around the country," developer Sandy Hoff said. "It's certainly one of the last in this area that's available on the shore of Lake Superior."

Most of the single-level condos with underground parking are about 2,700 square feet and cost $1.6 million. The penthouse, with 360-degree views, is 3,500 square feet. They'll all be sold with unfinished interiors, bringing the finished value of the bulk of them to about $2 million, Hoff said.

Four have already sold.

Million-dollar homes — both luxury condos and historic mansions — are becoming more common in Duluth, especially as demand for a range of housing outpaces inventory, said Karen Pagel Guerndt, president of the Lake Superior Area Realtors and owner of Real Estate Services of Duluth.

Since January, seven Duluth homes have sold for more than $1 million, with more than 25 listed. The closest to the penthouse price in the last two decades is a $2.5 million sale on Park Point in 2021.

"Like everything else, there's inflation across the board," Pagel Guerndt said. "So I don't think we're too far off from those prices starting to become more prevalent here."

Prices are high in other area housing categories, like a new $195,000 tiny home. The 205-square-foot house breaks down to $951 per square foot — more than the Breakers penthouse.

Tiny homes are more of an untested market for the area, so the price seems higher than what people might expect, Pagel Guerndt said, referring to local social media uproar about the cost.

The city says it needs all types of housing, even luxury offerings.

Duluth is short on owner-occupied condos, said its deputy director of planning and economic development, Adam Fulton. New condos expand the tax base and can free up other housing for someone to buy, "causing continued shifts in the housing market," he said.

The city approved a 10-foot height variance for the F.I. Salter complex overlooked by Interstate 35, allowing it to reach 55 feet. The developer did not seek any other public assistance, Fulton said.

The scope has changed since F.I. Salter first announced plans in 2021, with 17 units in the initial project. Construction costs and high interest rates pushed construction further out, and the complex is expected to open in the fall of 2024.

Hoff, who was also involved in the development of the Pier B resort, said the market for high-end condos continues to grow, and out-of-town buyers used to more expensive real estate — some seeking refuge from a changing climate — are fueling it.

"When you talk to someone in Duluth they go, 'Oh, my goodness, that's expensive,'" he said. "And you talk with people outside Duluth and you tell them where it is and the amenities and they go, 'Well, that seems like a good deal.'"

Hoff said he's spoken with interested buyers from Chicago, Los Angeles and Minneapolis, but at least one condo is going to a Duluthian.

Mark Boben and his wife, Linda, are selling their eastern Duluth home to make the move, planning for their next stage in life.

"Having a maintenance-free condo right on Lake Superior with beautiful views of the lake, the skyline, the Aerial Bridge and ore boats?" he said. "It's perfect."