“Death of the McMansions“, “home buyers want higher quality-smaller homes” has been the mantra for awhile. While that makes great headlines and great “feel-good” writing, the truth is something entirely different.
The housing boom and easy financing lead to the home sizes increasing, as the homes got larger the nickname “McMansions” was created. The nickname is not meant as a compliment to these larger homes, but rather an insult. I believe much of the criticism about larger home sizes stems more from jealousy than anything else. There are however some good arguments made for smaller homes, but the consumers are not choosing those homes.
If you asked any of the home owners who live in these “so-called” McMansions, I doubt you will find any one of them that believe they live in a McMansion and you would probably find a number of them that are “against McMansions”. It is all relative perception…
Home Sizes Shrinking?
There was a trend during the housing crash that the average home size was getting smaller, and that is where the bandwagon of reporting started from. Certainly these decisions are made out of environmental concern and higher consciousness for energy efficiency. I contended that the consumers are value shoppers, and size is one of the perceptions of value. It appears as if I my beliefs are being proven correct.
I categorize the consumers perception of value as weighing these 3 factors against the pricing when shopping for a home.
- Location (school district, commute, family)
- Size (raw square footage)
- Feature/Finishes (built-ins, upgrades,technology, etc)
In Minnesota most homes have full basements, this is primarily because of our frost levels in winter require our footings to be at least 42″ below grade – therefore it is not that much more money to add a full basement. Where we are seeing home builders providing “value” in our local market is by adding the finished square footage in the basement. This is relatively inexpensive square footage to add. The other area local builders are providing Size value is in bonus rooms over the garages. This area already has a roof and footings, so it is cost effective square footage to add. We are also seeing a trend away from the 2 story open foyer and that space is being utilized as living space now.
Builder published a great article on home sizes beating me on timing, but delivering some awesome content. At Builder Online they are onto this trend of larger home sizes. So I referenced some of their content.
Between 2010 and 2011, average new, single-family home sizes spiked to 2,522 square feet—larger than during the height of the boom, leaving the industry wondering whether smaller homes were ever truly in vogue or if they were simply a necessity due to tight credit, high unemployment, and a lack of equity.
Why do consumers prefer larger homes?
We as Americans like to dream big, and our homes are among our biggest dreams. Family sizes are not getting larger, yet our need for larger homes is growing. Much of this is the amount of stuff we own.
Personally I own so much stuff that I can hardly function. I try to get rid of stuff, but more stuff keeps piling up. It just somehow magically accumulates on me. I am not the only one with this dilemma… We live in an age where there are cheap products readily available for impulse purchase.
Think about 2 generations ago. .. My Grandfather probably owned about 4 days worth of clothing – today that number is probably 10 fold. He didn’t have an “entertainment center”, let alone a television, no computer or home office, no charging stations for iPads, iPhones, and gizmos, no rec room, craft or hobby rooms. He and his family of 8 lived comfortably in 900 square feet. Today I couldn’t fit all my iPads, iPhones, Computers, Printers, TVs into 900 square feet… Unless the economy goes back to more of “survival basics” – I don’t see the home sizes shrinking…
Right or wrong, it is reality.
- Small-Home Trend Reverses as More High-End Buyers Enter the Market (speakingofrealestate.blogs.realtor.org)
- The trend of right-sizing, not downsizing of American homes (agbeat.com)
- Where Are New-Home Sizes Going? (builderonline.com)
- The McMansion trend has peaked (grist.org)
- Defaults of the Rich: Walking Away From the McMansions (tampabayrealtor.wordpress.com)