Would You Spend $80,000 on a Playhouse?

Steve Chernicky is riding the wave of the luxury home recovery. At the high end of the market, prices are up and bidding wars are back, while less expensive homes are languishing. Chernicky's clients are willing to pay top dollar for his houses' exquisite craftsmanship, attention to detail, and efficient use of space.

But his audience also prizes things that most homebuyers don't, like dolls and sleepovers. That's because Chernicky's customers aren't grown-ups. They're 7 year olds.

Chernicky owns Lilliput Play Homes, a builder of luxury playhouses that run anywhere from $5,000 -- his cheapest model -- to as much as $80,000 (what he's charging a wealthy Russian for a scaled-down Palace of Versailles). Perhaps illustrative of the recession's relatively mild impact on the uber-wealthy, business is thriving. In fact, Lilliput Play Homes is currently on pace to have its best year yet, Chernicky says.

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While some might consider an air-conditioned Mediterranean-style mansion a bit indulgent for the kiddies, buyers of the backyard manors offer a passionate defense: The homes are a worthy investment in their child's imagination, they say, a counterweight to the mind-numbing electronic devices that normally hog kids' attention these days.

In addition to a full line of stock models, like the "Storybook Bungalow" and "Grand Victorian," Chernicky's 15-person operation also does custom jobs like the 30-by-16-foot replica of Versailles, which has secret rooms and tunnels. Just like full-scale manufactured housing operations, the crew builds the structures in Chernicky's Peters Township, Pa., workshop, then disassembles them and ships them to their buyers.

While he does receive orders from what he calls "Mercedes and fur coat" buyers, many of whom live overseas (Chernicky estimates that 30 percent to 50 percent of business comes from abroad), plenty of his clients are ordinary folks: "Grandmas with station wagons," he says.

"This is an emotional buy," he says. "These things are looked at as something that is part of childhood." As far as the expense, he adds, they're "no different than a hot tub and much less [expensive] than a swimming pool."

Caroline, a mother in Pennsylvania who asked that only her first name be used for this story out of security concerns, is one parent who decided that a play house that costs more than thousands of real-life homes in places like Detroit was worth the investment.

"I believe in traditional family values," she says. "I believe that in today's society kids are so hung up on technology and video games."

A lawyer who has one 7-year-old and two 14-year-olds, Caroline opted for the Grand Victorian, the company's flagship playhouse that has "all the bells and whistles," she says.

The home, which cost $25,000, offers a wraparound front porch constructed of simulated wood, stained-glass windows and a skylight, among other features. Caroline hired a decorator who added drapes, a dining table, a crystal chandelier, electricity, and a rose garden. The family later added a flat-screen TV too.

All in all, says Caroline, the playhouse, which she and her husband gave to their 7-year-old as a Christmas present, has been an "extraordinary experience" for her kids. The youngest spends three to four hours a day in the home with her friends, hosting pretend tea parties, and availing herself of other amenities that we neglected to mention earlier: a miniature grand piano and pond filled with hungry turtles.

The playhouse serves its purpose, she says, offering creative amusement to her children, who must maintain an A or B average for the privilege of playing video games on the weekend.

What's more, the home serves as a family "heirloom," Caroline says. Chernicky also stressed the homes' pass-down value, claiming that, in contrast to his competitors' products, Lilliput's playhouses last at least a generation.

Asked of her reaction to those who might disapprove of a $25,000 playhouse, Caroline says that "everyone has to make a decision based on their own experiences." From her perspective, she says, the playhouse is an invaluable contribution to her childrens' development.

But she draws the line at a Versailles replica.

"I'm sure to the average person it might seem extravagant," she says of her kids' backyard hangout, "but it's more realistic than some other playhouses that I've seen."