Million-dollar homes: Down on Main Street

Source: Samer Kuraishi

Source: Samer Kuraishi

As millions of Americans head home for the holidays, home sales will likely fall into their usual seasonal slumber. While a new house might be on many wish lists, it is not historically a popular holiday gift.

Housing sales actually began to slide in September and October as rising mortgage rates and uncertainty over the D.C. budget crisis left many potential buyers wary about added financial risk. The positive momentum of last spring and summer “continues to lose steam,” according to a Fannie Mae report on attitudes toward housing in November.

Prices are also playing on consumers’ nerves. While the sharp jump in the first half of the year was welcome news and returned millions of homeowners to a positive equity position on their mortgages, by August the gains were so large that they began pricing some buyers out and sparking debate over a potential new “bubble.” The gains are now expected to ease as we head into 2014.

(Read more: Trick or treat: The million-dollar home challenge)

All the uncertainty has some wondering what the new year will bring, and what better place to find out than right back home for the holidays … on Main Street. The latest edition of CNBC’s “Million-Dollar Home Challenge” will feature seven $1 million homes with “Main Street” addresses.

(Read moreWant a million-dollar home? Tips from a megabroker)

On Wednesday, reporters on CNBC shows are displaying two homes without disclosing their locations. They are documenting the interiors, exteriors, marketed features and one unique bonus of each home. The anchors are guessing where the homes are. Then real estate maven Dolly Lenz decides which house gives buyers a better bang for their buck. After revealing the two houses’ locations, Lenz chooses a winner. That house then goes up against the next mystery location on the next show.

We will crown a winner on CNBC’s “Closing Bell.”

(Read moreBest bang for your buck: $1 million home challenge)

Round One:

Cozy Cottage

On “Squawk Box,” the first house was in Montrose, Ala. and priced at $995,000. This quaint two-story bay cottage sits on 2½-acres and features magnificent waterfront views from either the screened-in porch or a private platform. This 2,300-square-foot home displays original woodwork and four fireplaces. The kitchen includes granite counter tops and beadboard cabinetry.

This charming cottage has three bedrooms and two baths. The master bedroom is downstairs and up the cherry wood stairway are two spacious bedrooms.

“Montrose is a beautiful place, gorgeous beaches, almost the Hamptons,” said Lenz. “The problem with the property is it has a fatal flaw.”

“The house abuts the house next door so you can look right in,” Lenz added. “Then the value is suddenly destroyed.”

Mammoth Manor

Built around 1850, this Greek Revival mansion is in Camden, Del. and sits on 2.3 acres. This grand manor is 7,000 square feet and at nearly two centuries old, it is priced at $960,000.

While the ample-spaced kitchen needs some renovation, upstairs has 11 potential bedrooms. But the real selling point is the manor’s grand main level featuring nearly 13-foot ceilings and original stencils that match the house’s stain glass.

“It has a lot of potential uses,” said Lenz. “Both as a bed and breakfast, as a wonderful compound for a family.”

The winner: Mammoth Manor

By CNBC’s Diana Olick and Ismaela Best. Follow Olick on Twitter @Diana_Olick.

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