The values of McMansions may be proportionally down and evidence from one well-off Chicago suburb suggests they are selling at similar prices to 15 years ago:
In South Barrington, home to swathes of McMansions, the market has been slow to recover. There, large single family homes regularly hit the market at the same prices they sold for in the ’00s, indicating an enduring lack of demand in the northwestern suburb.
Despite the risk that these homes presented leading up to the recession, it would seem they’re a more sensible investment today — so long as buyers know what they’re getting into. Pound for pound, McMansions are a ton of house for the money. But they’re not speculative equity, and they’re not a retirement account.
It would be helpful to see more data across suburbs. Without such figures, it is hard to know if:
- Is this an issue related to Barrington and its location and amenities? The suburb is almost all white and Asian and has a median housing value of just over $800,000. Is there less demand for housing in this particular location?
- Is this a problem for all McMansions in the Chicago area? If people are indeed seeking more “surban” locations or Baby Boomers are all trying to unload their McMansions at once, there might be relatively few buyers for such homes in a region of over 9 million residents.
- Are the particular features of these homes limiting the value? This could be due to particular features of the homes or many are now up for updates that have not been done.
The issue may not be McMansions at all: perhaps it is the mindset common among Americans that houses should be investments that increase significantly in value.