Tag Archives: McMansions

Recent uptick in sales of McMansions?

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Here is an argument that new home sales of recent months might be driven in part by larger homes, sometimes known as McMansions:

Data released on Wednesday shows that sales of newly built homes rose 3.3% in April from a month prior and 9.9% from a year ago. While the figures do not disclose the size of these new homes, home builders credited the McMansion side of the spectrum. That’s a reversal from recent trends: During the recession the size of homes got smaller, shrinking 3.4% to 2,382 square feet, according to the US Census. But last year that size jumped 5.2% to 2,505 – the largest in at least four years. In many regions of the country, homes are even larger.

Home builders say the trend toward larger new homes picked up more this year. Michael Villane, president of Lead Dog Builders, a custom home builder in Rumson, N.J., says he’s currently building homes with sticker prices of $1.5 to $4 million, up from the $1.3  to $1.5 million his clients were commissioning a year ago. While the average size of homes in the region is 3,500 to 5,500 square feet, he says the orders he’s received this year are for 7,000 plus-square feet homes. Though there’s no official definition of the word, many define McMansions as new homes larger than 3,000 square feet.

In some cases, home builders are enlarging homes even if clients don’t ask for it. Michael Dubb, CEO and president of The Beechwood Organization, a New York-based home building company, says his firm is building houses with larger kitchens, higher ceilings, and overall more spacious rooms in an attempt to appeal to buyers who might be on the fence about buying a new home. By building bigger without raising the price, he says, the company is hoping to increase its sales. (He says they’re not downgrading quality, but rather cutting into their profits in order to make more sales.)…

Requests for large new homes come at a challenging time for the overall new home market. New home sales hit a 51-year low of 307,000 last year, according to the NAHB. That figure is expected to jump 18% this year, but it would still be way off its peak of 1.3 million homes in 2005.

If I had to guess at what is behind this, here is what I would say: there is a bifurcation in the current housing market. On one hand, you have a large group of potential homebuyers who are looking for smaller homes. One recent book I reviewed calls this the “demographic inversion” as young adults and retiring Baby Boomers look to downsize and purchase in denser areas. Proponents of these trends argue that the Americans of the future are looking for a different kind of homeowning experience in the future. On the other hand, you still have a decent number of wealthy homebuyers who are now moving out of a hibernation stage brought on the economic/housing crisis several years ago. They are looking to buy homes similar to what they would have bought ten years ago but now feel financially stable enough to pursue this.

The article doesn’t mention this but I wonder if this is also at play: new home sales are at the lowest stage in 51 years so this new push for larger homes among the wealthy is really raising the average in a way that we haven’t seen in the past. When those at the lower economic spectrum get back into buying homes (though some would argue that they won’t – perhaps we’re moving to a rental society), the average figures for the whole country might come down or stabilize a bit.

Real estate wisdom: don’t build the nicest McMansion on the block

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An oft-cited piece of real estate wisdom is that you shouldn’t buy or build the nicest home in a neighborhood. Here is an update on that tale: especially don’t do this when you are building a McMansion.

For example, consider the fate of what became a conspicuously large house for sale in an Atlanta suburb.

A few years ago, at the top of the market, the owners purchased a small fixer-upper, then renovated and significantly expanded it. Once completed, the owners tried to sell their McMansion in one of the worst real estate markets ever. After a year without success, they had to lower the asking price multiple times — and ultimately walked away with a big loss.

The fact that they bought at the top of the market and tried to sell during a decline in values certainly didn’t help. But it wasn’t the only factor by any means. On one side of the house was an apartment building. On the other sat a home that was an eyesore.

The proximity of these two properties should have been a warning to the owners: Don’t super-size your house when it’s surrounded by properties that aren’t at least equal in value. Instead, the owners had gotten caught up in the market frenzy. They didn’t think about what would happen when it came time to sell…

A better strategy, no matter what kind of market, is to buy the worst house on the best block. You can always improve the property and therefore increase its value. And because it’s on a great block, improvements you make to the home will be practically guaranteed to give you a top return on your investment.

I wonder if there aren’t two factors here that could mitigate the reduced selling price of the McMansion:

1. The owners really really wanted to be in this particular neighborhood. And if they have the money to build the bigger home and absorb the loss more easily (the article doesn’t say), perhaps this was more about the block than the particular house. Sure, they may have not made the most money they could have on their property but perhaps that wasn’t the most important thing.

2. If one does pursue the strategy of buying the worst house on the block, might one have to pay more to buy into a nicer block compared to buying a nicer house in a worse block? In other words, this advice partly depends on the context of the neighborhood. To buy into a nicer neighborhood at the start, one is likely to have to overpay, particularly in neighborhoods that are really hot or where there is a lot of pressure to tear down the existing home and build something bigger and better.

Overall, I’m intrigued by the general logic here from real estate agents: all that matters is the spread between what an owner paid (plus what they end up putting into the house) and what they get when they sell the home. In a perfect real estate world, all homeowners are told that they too can make money off their homes. Is this really possible? Is it even realistic for most owners? There are other reasons people buy homes and wealthier homeowners have more financial latitude to do what they want.

McMansions are not retirement vehicles

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In a discussion of the number of Americans approaching retirement age, one economist briefly mentions one issue: the expectation some retirees had that their homes would be retirement vehicles may be misguided.

“The fact of the matter is that this aging-but-not-yet-aged segment of the baby boomer class can’t afford to retire,” said David A. Rosenberg, the chief economist of Gluskin Sheff, a Canadian firm, noting that overall household net worth was 15 percent lower than at the prerecession peak. “Dreams of the 5,000-square-foot McMansion being a viable retirement asset have morphed into nightmares of a deflationary ball and chain.”

This is indicative of a larger shift: with the ongoing housing crisis, homeowners can’t expect to cash out their homes in the same way they might have in the late 1990s and early 2000s. McMansions are emblematic of people taking out large mortgages and then having difficulty in paying off their mortgages or moving (“downshifting”) to a cheaper residence because of the reduced value of their homes. Of course, this shift moves housing back to its historic role as a dwelling but not necessarily as a golden nest-egg for retirees.

I would be interested in knowing at which age people tend to purchase McMansions or other large homes. For example, buying a McMansion in one’s 50s might not be the best idea if someone wants to retire at 65. If a homeowner is willing to live in a home for a longer period of time, say more than 10-15 years, then such a purchase might not be as unreasonable as the homeowner can pay off more of their mortgage. Living in a home long-term may not be possible for everyone given changing job circumstances as well as the general mobile nature of American society but there are ways to help ensure one could make more money off of selling a large home.

McMansion owners are bike haters

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I know the arguments between drivers and bike riders can become quite heated but I haven’t seen this twist before regarding bike-hating McMansion owners:

It takes just five minutes on top of this bike for me to know I am good for the environment, healthy, frugal, smarter than all of y’all.

Whoa! Slow your roll, Virginia boy. Can’t you see that I’m busy saving the Earth on my bike? That SUV of yours takes up half the city. I bet you live on a huge cul-de-sac, in a McMansion with your own septic system and sad little saplings planted by the developer who chopped down all the mature trees to build that monument to yourself. I bet you don’t even recycle.

I roll my eyes at you, shake my helmet head at your obvious ignorance.

Headline of this column: “Bike lover, bike hater: Depends on whether you’re on four wheels or two.”

I’m always intrigued by the propensity in our culture to label people based on one consumer item, whether it is a McMansion or a bicycle. Here we get a classic description of a McMansion owner: because a person lives in a McMansion, they hate the earth, drive an SUV, and are generally self-centered. Granted, buying a McMansion is a large monetary choice, a home probably the biggest single investment people will make in a lifetime, and large symbolic choice as Americans have long held that one’s home should reflect those who live in them. It would be interesting to see how these single choices, McMansion or bike, line up with other consumer choices: do bike riders live in the city, tend to drive a Prius (or even better, not own a car and utilize Zipcar), and shop at Whole Foods while McMansion owners are suburbanites who tend to drive SUVs and shop at Walmart?

This is a reminder that moral values are often attached to consumer goods. Buying items isn’t simply about functionality or desires but rather indicate how a consumer views the world and what they value. Additionally, certain items, such as McMansions, are clearly viewed as moral signals by others.

 

Social profiling of McMansion owners?

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The mayor of an Australian town suggests that some residents are profiled because they live in McMansions:

HILLS Mayor Greg Burnett challenged Prime Minister Julia Gillard last week to meet struggling families and businesses from the Hills.

The mayor set the challenge on the Ben Fordham show on 2GB last Wednesday in response to the Prime Minister’s suggestion that Sydney’s north shore was out of touch.

“It’s social profiling and it’s similar to comments made regarding our area when they talk about McMansions and our levels of income,” he said.

“We have the highest proportion of families with mortgages than anywhere in the country and parents working 70 to 80 hours per week.

As I’ve suggested before, there isn’t really an acceptable quick comeback if someone accuses you of living in a McMansion. Such claims tend to put the owner in a defensive position. It is common to hear people make comments about McMansion owners, not only because of their perceived wealth but because of their bad architectural taste, their disinterest in community life (particularly in teardown situations), and how their purchases help feed into large social problems like sprawl and consuming too much.

The most support McMansion owners get tends to come in more wealthy communities with a critical mass of larger and more expensive houses. It is in these places where teardowns are not always seen negatively and property rights are more important in public discourse and regulations. These communities often have zoning that at least allows, if not encourages, the construction of McMansions. But from the outside, these communities can be viewed as exclusive as it requires a decent amount of money to live there and some communities actively work to keep certain housing and people (anything that might harm property values) out.

However, it might be going too far to suggest that McMansion owners are deserving of pity. After all, these tough economic times mean that there are plenty of people experiencing financial difficulties. These days, McMansions (and there owners) are a favorite whipping boy. See this example from a comment about a Atlanta Journal Constitution story about debt:

It’s because everyone wanted the McMansion ($300K). Then you had to have the Cadallic Escalade (40K)…to impress the neighbors.

And there were numerous housewifes who LOVE to shop and don’t work…

There is not much support for McMansion owners today…

McMansions are so big you need staging to define the rooms for potential buyers

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A New York firm talks about why staging is needed in McMansions:

Staging is a concept that started on the West Coast, and was virtually unknown when Guest and Kramer started introducing it to real estate brokers 12 years ago.

“The advantage is huge,” says Guest. “People walk in to these McMansions. There are so many rooms they don’t know which one is used for what. Is this the family room? Parlor? Great room? We define it. It lets them see that they could live there.”

“We would try to explain to the real estate brokers,” says Kramer, “giving them figures and excerpts from articles in San Francisco and London. It was a difficult idea to sell to a seller.”…

But since then, times have changed. From the real estate boom to the recession that followed, house staging has continued to grow.

“The worst year for everyone was out best year ever,” says Kramer. She acknowledges that perhaps, as it gets harder to sell a house, people are willing to put a little more effort into the process. In addition, people have gotten more involved in the process.

McMansions are so large that people don’t know what to do with the space! Why not get prospective homebuyers maps or at least architectural plans in order to make it through the house! On one hand, this seems to reinforce some stereotypes about McMansions: they have a lot of unnecessary space and Americans, for some reason, really like to have that kind of space. I can imagine Sarah Susanka would have a good time talking about why people should go with smaller homes rather than have to have their spaces defined for them.

On the other hand, staging seems to be pretty common today across housing types. It can be difficult for homebuyers to envision what a space can become without a little help. What does it cost to stage the typical McMansion (let’s say between 3,500 and 6,000 square feet) these days? And what staging touches in McMansions work the best for selling the house?

Greenwashing Cadillacs and McMansions

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A review of the 2012 Cadillac Escalade compares the greenwashing of the Escalade and McMansions:

And of course, the Escalade is not a paragon of fuel efficiency, but you knew that. Still, 13 mpg city and 20 mpg highway is pretty grim. Much better mileage is available, however, in the form of the Escalade Hybrid. It’s easy to view that car as a cynical bit of greenwashing (sort of like putting bamboo floors in your McMansion), but the Hybrid’s EPA ratings of 20/23 mpg put it on a par with much smaller vehicles — the city rating particularly.

Two thoughts:

1. I’ve asked repeatedly whether McMansions could be considered green. SUVs have similar issues: how many MPG would they need to no longer be considered with derision by critics?

2. The comparison between McMansions and SUVs is not unusual. Here is a finding from my recently published paper on the meaning of the term McMansion: out of the 637 articles that mentioned McMansions in the New York Times between 1/1/00 and 12/31/09, at least 33 compared McMansions and SUVs. Both are often cited as exemplars of excessive consumption (using resources, debt, sprawl, etc.) and many critics would love to leave the two objects to a foregone past.

Comparing the mass-produced ranch to the mass-produced McMansion

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I’ve recently seen several articles about the ranch house (I discussed Atomic Ranch magazine a few weeks ago) but this one, “Ranch housing style makes a comeback,” led me to thinking why the mass-produced ranch may be popular and the mass-produced McMansion is not. Here is a brief explanation from the article:

Cicaloni is not alone in her appreciation for the ranch. Though it will never be as popular as the ubiquitous Colonial here in New England, the ranch is making a return. The simple home is being embraced by young people attracted to the mid-century modern vibe; by aging boomers who no longer want to deal with stairs; and, as always, by those looking for an affordable home…

“Popular publications portrayed a confident and easygoing way of life that could be accessible to one and all; of particular interest was the casual California lifestyle, implying prosperity, glamour and optimism as embodied in a sunlit and breezy ranch house where indoors and outdoors blended effortlessly,” Betsy Friedberg of the Massachusetts Historical Commission wrote in a 2003 issue of Preservation Advocate. “In the 1950s, I think, [ranches] were considered fresh,” says Zimmerman. “They were built at the same time as Capes, which looked very traditional. If you were a person who was up to date and interested in the latest thing, then, yes, a ranch is the thing you would have chosen in 1952.”…

BUT EVENTUALLY, thanks to tract housing like in the infamous Levittowns, people didn’t see the charm anymore. The 1962 song “Little Boxes,” inspired by a drive through a postwar development in California, ridiculed the conformity: Little boxes on the hillside, little boxes all the same. There’s a green one and a pink one, and a blue one and a yellow one. And they’re all made out of ticky tacky, and they all look just the same…

But the other thing is that taste in homes, like fashion, is cyclical. “All building styles go through a period when they are unpopular,” says Zimmerman. “At one point, Victorian houses were thought of as white elephants and hard to heat and not set up for modern living and not in tune with the landscape. So, in the ’60s, we lost a lot of Victorians.” And so, the ranches often derided as “ranch burgers”?—?as in mass-produced by a fast-food chain?—?were replaced with homes that came to be known as “McMansions.’’

So it’s simply a matter that ranch houses are on an up-cycle? It is somewhat amusing to think that these simple houses could be an antidote to an era of supersizing house size and debt.

I’m sure some critics of suburban houses would argue that ranch homes and McMansions share several important characteristics. To start, they are associated with sprawl and tract subdivisions. McMansions may be an easy target today but there were plenty of critics of the Levittowns and similar subdivisions built after World War II. In this sense, the problem may not be with the homes themselves per se but rather with the way of life that promotes building mass-produced houses. Second, both ranches and McMansions are not prized for their design or architecture due to their mass-produced nature as well as their unpleasing aesthetics (though these differ: ranches are meant to be more simple while McMansions are meant to impress or be flashy).

It would be interesting to see figures about how quickly housing stock is replaced in the United States. For example, how many ranch houses were built and how quickly were they replaced? What can this tell us about how quickly McMansions might be replaced?

McMansions are symbols of “the excess of greed”

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An interesting way the term McMansion is sometimes used is to see such houses as symbols for some larger issue in our culture. This usage is illustrated in a documentary to be shown next week in Vancouver:

Vancouver’s treasury of modern architecture is the subject of Coast Modern, by Michael Bernard and Gavin Froome (May 8, 7 p.m., Vancity Theatre).

“Coast Modern is an exceptionally beautiful film,” says Woodend. “I have a bit of a yen for modernist architecture, just because it’s so exquisite, and it’s one of those films [that takes] house porn on a whole new level.

“Although, to give it credit, it looks at architecture as a manifestation of social values. [It has] Douglas Coupland weighing in on McMansions, and how they’re sort of this travesty, not just in architectural terms, but as an embodiment of cultural and social values, the excess of greed that has come out of the last 10 years and shown up in brick and mortar.

“In that regard it’s pretty thoughtful, it really uses architecture as a means to talk about culture.”

From this point of view, houses are not just things to be purchased by individual buyers. Rather, homes and their architecture represent broader trends in society. McMansions can then be viewed as symbols of excess, products of an era where people consumed more than they needed with impunity. Presumably smaller homes indicate (whether they are tiny or “not-so-big“) fighting back against this culture of excess.

Of course, labeling a home as a McMansion then does the job of pointing out the excess. If you live in such a home that acquires this label, do you try to respond that the home really isn’t that excessive? Or perhaps that it is green enough (perhaps a tactic of celebrities)?