Despite the price tag, the home is a mere shell – it doesn’t have interior walls, floors or ceilings – and will require more than $10 million to complete. And it will require a buyer with a net worth of just under $1 billion. While any such buyer would surely pay cash, financing the palace with 10 percent down would mean a mortgage and property taxes of around $500,000 a month.

Three doors away on Broadway, in a six-block area known as the Gold Coast, is a chateau-esque mansion up for grabs for $55 million. Recent sales in the neighborhood include a nine-bedroom, nine-bath mansion for $22.5 million; a new California contemporary home on the Presidio Wall for $15 million; and the Arts and Crafts-style home that prompted a bidding war and sold for $14 million.

As the mortgage market reels, foreclosures surge and home prices fall, a rarefied part of the real estate market remains unruffled. In this gilded corner of San Francisco, buyers are not only landing homes on prestigious blocks, but are buying up the block, collecting adjacent homes to create family compounds.

“What’s happening in the luxury market in San Francisco, which starts at around $3 million, is bullish because of the new businesses and building at Mission Bay and the Presidio,” said Joel Goodrich, a San Francisco real estate agent who specializes in high-end properties and is co-listing the $65 million villa with David Barrett of Warwick Properties Group.

“We are seeing a huge amount of high-tech money, but the big thing now is investment bankers and venture capitalists drawn to the area by the new industries,” he said.

Twenty-five homes priced at more than $3 million have sold in Pacific Heights in the first nine months of this year, up slightly from the 22 sold during the same period last year, according to San Francisco’s multiple listing service.

Nationally, the picture is equally upbeat.

“Three years ago the most expensive property on the market was $75 million, and now it’s $155 million,” said Rick Goodwin, publisher of Ultimate Homes, which compiles an annual listing of the nation’s most expensive properties for sale. This year’s listing of the 12 most expensive properties places the $65 million San Francisco villa as tied for seventh with a Malibu beach home and a property in Incline Village.

“From where most people are sitting, these prices are outrageous,” Goodwin said. “But if you’re talking about someone whose net worth is a $1 billion and the house is at $50 million, that’s a small percentage of one’s total worth. And people with means will spend that kind of money on a house, as it’s such an emotional entity. For a lot of people, the house becomes a trophy.”

Pacific Heights, running from Van Ness Avenue on the east to Presidio Avenue on the west, Union Street at the north and Bush Street at the south, has drawn the well-heeled since before the turn of the past century.

Arthur Bloomfield, a classical music critic and author with his late wife, Anne Bloomfield, of the new book “Gables and Fables: A Portrait of San Francisco’s Pacific Heights,” said the neighborhood began to take shape as the city’s cable car line extended west.

“The building of fairly large houses was happening in Pacific Heights in the late 1800s,” Bloomfield said, citing as examples the romantic, all-white Casebolt house at 2727 Pierce Street, built in 1866; the Burr mansion at 1772 Vallejo, built in 1878; and the Renaissance-style Flood mansion – now the Convent of the Sacred Heart – at 2222 Broadway, completed in 1901.

Today, the neighborhood is home to old and new money, to society figures Ann and Gordon Getty and software billionaire Larry Ellison. It is a place where mansions are not big enough.

The Gettys, who already expanded their home across two lots, recently spent $8.5 million on a third adjacent home on Broadway. Gap founder Don Fisher bought a property behind his Pacific Avenue home so he could add a lap pool. A couple living on Jackson Street who bought two houses and created one large modern home designed by Olle Lundberg have now purchased a third adjacent home. A prominent commercial real estate developer is expanding his Divisadero and Pacific Avenue property by developing the site next door.

“There are about 3,000 fabulous single-family properties in San Francisco and there will never be any more,” said developer Mitch Menaged. “San Francisco is always going to be a powerhouse of a city. We’ve got Stanford and UC Berkeley and we’ve got the brain trust of high tech, of medicine, of biotechnology. Luxury properties in San Francisco will always be a great investment.”

Menaged acknowledges, though, that he never could have predicted the appreciation of one particular property in Pacific Heights – a piece of which became the $65 million villa.

It was Menaged who in May 1998 outbid a handful of other deep-pocketed developers for a weed-strewn, 1.1-acre lot on Pacific Avenue owned for more than a century by the San Francisco Unified School District.

The lot, purchased by Menaged for $13.7 million, was then subdivided into seven parcels on Pacific Avenue and two parcels on Broadway. Three lots that extended from Pacific to Broadway were bought by the daughter of one of the founders of Oracle to create a family compound. Another three lots also running from Pacific to Broadway were purchased by Gloria Gilliland, whose husband made a fortune in cable and communications systems. The smaller remaining lots on Pacific were turned into three separate single-family homes.

Gilliland purchased her three lots in 1998 for $8 million, and hired well-known architect Charles Young. The building of the neoclassical villa and guest house began. After pouring some $20 million into the property, Gilliland decided to sell it unfinished. In November 2002, the villa – then about 40 percent complete – was sold to Peter Sperling for $32 million. It was the highest price ever paid for a home in San Francisco.

Sperling, son of the founder of the University of Phoenix chain of learning centers, has spent the last five years continuing the building – at an estimated cost of around $18 million. To date, no one has lived on the property. The Sperlings decided to put the house on the market for $65 million. It is now about 80 percent complete.

On a tour of the villa at Broadway and Broderick, Realtors Joel Goodrich and David Barrett showed off the three floors of living space, the soaring 16-foot-high ceilings, the back staircase for the help, the French-made doors and windows that required installation by a team from France, the top- floor glass atrium and reading room with a view of the Golden Gate Bridge, Alcatraz – and the living spaces of neighbors across the street, including Ellison and the Gettys. All exterior walls, columns and terraces were clad in limestone mined from a quarry outside Paris.

They then headed across a gravel yard – soon to be a reflecting pool – and into the 6,000-square-foot guest house, situated above the six-car tandem garage and overlooking an eight-car motor court for guest parking. The main house and guest quarters are construction sites, with steel beams for walls, unfinished concrete floors, and nails and wires protruding around every corner.

Barrett said the unfinished aspect of the property is a plus, as it will give the buyer the chance to complete it to one’s personal taste. He said there has been consistent interest. After all, there are 946 billionaires in the world, according to this year’s count by Forbes magazine.

Goodrich said that as much as 50 percent of the $65 million valuation was based on location.

“It is about location,” he said. “It’s about the quality of construction, about the inability to duplicate this house anywhere, and about the ability to be on the Gold Coast.”

Barrett said of his clients: “The Sperlings are purists when it comes to their homes. They do not buy homes to flip them. They do not buy properties to make a profit. They buy homes for the preservation of good architecture, for the location, and for their true love of beautiful homes.”

The Sperlings have told Barrett that if the house at 2845 Broadway doesn’t sell, they’ll take it off the market, complete construction and call it home – or at least call it one of their homes. They own more than 30 houses across the country.

“I would like the one below but I will settle for the one on the gold coast” says Sandy Hutchens.