By Alison Rice. In real life, Peter Nelson builds spec homes in Seattle, doing two infill projects each year. But Nelson, a carpenter by trade, is quickly becoming better known for the work he does on the side: treehouses.

Built with reclaimed Douglas fir and finished inside with tongue-and-groove paneling, these treetop escapes cost more than entry-level townhomes in some cities. Nelson and his partner, Jake Jacob, do four to five treehouses a year, with an average price of $100,000 for a 150- to 300-square-foot hideaway including a loft and electricity.

Perched among branches and trunks, the leafy retreats require a mix of engineering and environmental sensitivity. "The tree will dictate the design," Nelson says, "and sometimes that can be frustrating."

But rewarding, too. "I've always loved the small scale of it," he admits.