Is the McMansion era over?
McMansions have been the butt of jokes for years; there even is a great website, McMansion Hell, that dissects their design better than TreeHugger ever did. (We tried). It has seemed that everything built post the Great Recession was a McMansion, but according to Patrick Clark in Bloomberg, the bloom is off the McMansion rose. He picks up on McMansion Hell:
Lately, these homes have been the subject of fresh scorn, thanks to an anonymously authored blog that breaks down the genre’s design flaws in excruciating detail. Posts lambasted builders for erecting garages bigger than the homes they’re attached to, dropping giant houses on tiny lots, plus shoddy construction and a mishmash of contrasting styles. (Gothic Tudor, anyone?)
There were many reasons for the McMansion boom. After the recession the banks tightened up lending so that only the rich with huge downpayments could get a mortgage; increases in income inequality meant that there were a lot fewer people able to by cheaper, smaller houses; there were millions of them on the market, left over from the crash.
Builders loved them because they were really profitable; the hard expensive stuff is the same whether the house is big or small (services, plumbing, kitchens) but they are selling a lot more air. They get a lot more profit per square foot.
They also sold for a lot more money; four years ago, the average McMansion cost 274 percent more than an average house in Fort Lauderdale. Today, the premium is down to 190 percent. In fact, the premium has dropped significantly in 85 of the 100 largest U.S. metropolitan areas. In most places, the bottom has fallen out of the McMansion market.
Clark lists some of the reasons, including overbuilding.
Along the same lines, builders have largely neglected the market for smaller, entry-level homes since the housing market collapsed nine years ago, said Ralph McLaughlin, chief economist at Trulia. That’s created excess demand for smaller, older abodes, leading those homes to appreciate faster. Still, there's another possibility: McMansion owners are losing out because the market considers their homes an ugly investment, too.
I like to think that people are finally realizing that they don’t want the long commute, they demand quality over floor area, they want healthy green efficient homes, and that they care more about design these days. But that's my fantasy.
It’s more likely just dumb builders doing what builders do, which is keep building until they run out of customers and the bank takes their truck away.