Goodbye McMansions, Hello Big Boxes: American Houses Are Growing Again

Since the real estate business crashed, there have been a lot of stories about the move to build smaller houses. Many, like Daniel Indivigio at the Atlantic, thought there was a real change afoot in people's expectations:

Since being green is so en vogue these days, I would suspect that larger, energy sucking houses will also be out of style indefinitely.

I was skeptical.
I wish I could say that people will flock to well designed, smaller, greener, healthier houses, but I've had a couple of very expensive lessons that convinced me that it just ain't so. When it comes to the marketplace, size matters, efficiency doesn't.

So in this dreadful market, guess what is actually moving? Supersized, big box houses at extraordinary prices. The reasons are the same as they always have been; the bigger the house, the lower the cost per square foot since volume, drywall and carpet are cheap. But forget about the McMansion part of it, no big Tuscan entrances anymore, these are just big, simple boxes on boxes. According to Teresa Burney of Builder Magazine:

The big-box home trend was born as a way to compete with resales because it is rare to find large homes among resales and foreclosures, making their plus-size a product differentiator. Also, the larger homes can often pass muster with appraisers more easily, because the bigger the house, the smaller the square-foot price, and the higher-priced portions of the home, kitchens and bathrooms, are amortized over a larger number of square feet. The lower price per square foot helps the homes compete with the lower per-square-foot cost of distressed home sales.

So the lousy market actually encourages the building of bigger houses. But it has to be cheap.

Still, the formula of building such homes at a profit is tricky. It requires that land in the right neighborhoods be bought at fire-sale prices and that the home itself be value-engineered for cost efficiencies as well. The box on top of a box model is a less expensive way to build than a single-level house or one with more complicated shapes and roof pitches.

The article points to one developer in particular, Meritage Homes in Orlando. They can do this because the land is cheap, the trades are starving and will just about work for food, material costs are down and they can sell a 4,163 square foot house for $246,990, or $ 59.32 per square foot, a number I haven't seen in twenty years. And as we know from every single post I have written about prefabs and minihomes, cost per square foot is what matters in America, to buyers, bankers and appraisers.

The houses are "green", too, "a true testament to Meritage Homes' commitment to the future of homebuilding with respect to Energy Efficiency, Water Conservation, Sustainability, and Green Building Practices." They get Energy Star, because the rating system doesn't really give a damn how much energy you use, just that you are more efficient than a code compliant 4,163 square foot neighbour. I really do not mean to criticize Meritage; they appear to be quite serious about their green-ness. It's just that the priorities are so upside down; low flow shower heads matter, but acres of irrigated lawn in a world of sprawl don't.

Of course, everything we hate about big box retail is here; car dependent, built so cheaply it won't outlast the mortgage, out of PVC and particle board but it doesn't matter, because, in the end, people buy the biggest house they can afford, period. And the whole system, from the land developers to the planners to the municipalities to the lenders to the appraisers, is designed to encourage it. Why am I not surprised.

More at Builder.

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Goodbye McMansions, Hello Big Boxes: American Houses Are Growing Again
They are big, they are cheap, they are ugly. And they are selling, for all the wrong reasons.

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