In 2003, Microsoft co-founder Bill Gates paid $1.31 million for a home beside his Washington estate; 21 years later, he sold it for $4.85 million, nearly 4 times as much

In 2003, Microsoft co-founder Bill Gates paid $1.31 million for a home in Medina, Washington, close to his sprawling lakeside estate. Twenty-one years later, the property changed hands for a reported $4.85 million, nearly 3.7 times its original purchase price. The sale also showed that Gates' property holdings extend beyond Xanadu 2.0 into the surrounding neighbourhood.

According to Architectural Digest, Gates's real estate portfolio includes properties across several US states, from California to Montana and Florida. However, the 2024 sale stood out because the house was relatively modest compared with his principal residence. It was a mid-century modern home of approximately 2,430 square feet, with four bedrooms and three bathrooms, situated near Lake Washington in one of the Seattle area's most expensive residential communities.

A neighbouring property close to Xanadu 2.0


As reported by Barron's and Mansion Global, Gates acquired the house through a limited liability company linked to him in 2003, when it last changed hands for $1.31 million. Built in 1954, the residence offered a different scale of living from the main Gates estate, which occupies a prominent position along Lake Washington. The house featured wooden ceilings, large windows, a double-sided fireplace and a kitchen with a skylight. Its living and dining areas were arranged to take advantage of the surrounding views, while the property also included a family room, an office and a Zen garden.

Waterfront access certainly helped to make it more desirable, with the view reaching toward Seattle and the Olympic Mountain range. It was located adjacent to what would have been considered Gates's main house: Xanadu 2.0, located in Medina, which borders Lake Washington on its eastern side. However, there is no publicly known reason why Gates had chosen to purchase the particular piece of property, nor how he had used it.

The sale came within days of its listing

According to Realtor.com, the house was listed on 29 March 2024 for $4,988,800. By 9 April, it had reportedly gone under contract, meaning it attracted a buyer in less than two weeks. The quick sale may reflect demand for waterfront homes in Medina, where location, views and privacy are major selling points. Initial news reports released during the pending status of the transaction did not include details on the sale price. Later reports on the real estate transaction said it was sold for $4.85 million. Inflation during 21 years, property tax, expenditures on renovations, insurance, maintenance, etc., were not taken into account in these figures.

How the smaller home compares with Xanadu 2.0

The difference between Gates' primary residence and the smaller home makes it easier to understand why there was so much fuss about the sale. Architectural Digest notes that the Xanadu 2.0 covers around 66,000 square feet and is famous for its technologically advanced interior, its garden and its location above Lake Washington. This house was designed by architects James Cutler and Peter Bohlin and includes such features as a 60-foot pool, an indoor trampoline room, and a large domed library for Gates’ book collection. The house is named after the fictional mansion featured in the movie Citizen Kane, whereas the word “2.0” refers to its technological design. Bill Gates started buying the land for his house in 1988, and the construction took several years. It became a well-known private house associated with the technology industry. This transaction involved a very small house compared with others, but it demonstrated another feature of property ownership in an expensive neighbourhood. Gates has bought many houses and pieces of land around his Xanadu 2.0 estate, which were later sold.