Tag Archives: square feet

The declining “McMansion to Multi-Millionaire ratio”

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One analysis looks at the popularity of McMansions (amidst articles claiming they have returned) via a ratio of McMansions to multi-millionaires in the United States:

We can get a good contemporaneous gauge of the popularity of McMansions by dividing the number of new 4,000 plus square foot homes sold by the number of households with a net worth of $5 million or more: call it the McMansion/Multi-Millionaire ratio. (There’s no universally accepted definition of McMansion, but since the Census Bureau reports the number of newly completed single-family homes of 4,000 square feet or larger, most researchers take this as a proxy for these over-sized homes.)

The McMansion to Multi-Millionaire ratio started at about 12.5 in 2001 (the oldest year in the current Census home size series)—meaning that the market built 12 new 4,000 square foot-plus homes for every 1,000 households with a net worth of $5 million or more. The ratio fluctuated over the following few years, and was at 12.0 in 2006—the height of the housing bubble. The ratio declined sharply thereafter as housing and financial markets crashed.

McMansiontoMultiMillionaireRatioEven though the number of high-net-worth households has been increasing briskly in recent years (it’s now at a new high), the rebound in McMansions has been tepid (still down 59 percent from the peak, as noted earlier). The result is that the McMansion/Multi-Millionaire ratio is still at 4.5–very near its lowest point. Relative to the number of high-net-worth households, we’re building only about a third as many McMansions as we did 5 or 10 years ago. These data suggest that even among the top one or two percent, there’s a much-reduced interest in super-large houses.

An interesting measure that tries to put together how many wealthy people there are (the ones who can build and purchase McMansions) with how many new large homes were constructed (with the rough proxy of square footage – not all homes over 4,000 square feet would be considered McMansions). The conclusion is interesting: the number of McMansions being built today is quite lower than the peak ten years ago or so. So, when journalists write that the McMansion is back (usually with a negative tone – our wild spending and consumeristic days of the early 2000s are set to return!), it is not at the same scale as we are still in the middle of a depressed housing market.

You’ve been warned (again): McMansions are back!

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Newer American homes are bigger than ever:

New American homes were bigger than ever last year, according to data from the U.S. Census Bureau. After a few years of shrinkage in the aftermath of the Great Recession, the median square footage of newly-built homes last year tipped the scales at over 2,400 square feet. That’s nearly 1,000 square feet larger than the median home built in 1992. The death of the McMansion has been greatly exaggerated…

There are any number of explanations for this trend. Young first-time buyers, who are less inclined to buy big suburban houses, are largely sitting out of the market. Credit requirements are still much tighter than they were before the housing collapse, so much of the activity in the housing market is from wealthier families looking to trade up — and they’re looking for bigger and better.

Another, possibly overlooked contributor? Politics. A 2012 paper by Stanford political scientist Adam Bonica found that builders and construction firms were among the most politically conservative businesses in America, judged by their owners and employees’ contributions to political parties. And a Pew Research Center study last year found that conservatives overwhelmingly prefer communities where “the houses are larger and farther apart, but schools, stores and restaurants are several miles away.”

I don’t know how much of this is just political. To suggest so means that both sides can claim the other is trying to push a particular agenda: conservatives argue liberals are trying to force everyone into big cities and liberals can argue developers are politically connected people who only want to serve the wealthy. Either cities or McMansions become the big enemy. I would instead privilege two factors. First, an economic situation where many Americans don’t have the money to purchase a home (the homeownership rate is down overall) as well as a housing market that is primarily catering to wealthier buyers (there are more profits to be made in more expensive homes). Second, there is an American ideology that privileges individualism and private space, values that aren’t exclusively conservative or necessarily related to the exurbs. For example, the suburbs are not full of McMansions; suburbs range from inner-ring suburbs to exurbs with a wide range of housing and populations.

American homes are bigger again but now more energy efficient

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A new government report shows American homes are more energy efficient than in the past:

Efficiency gains are offsetting more than 70 percent of the growth in energy use that would result from the increasing size and number of U.S. households, reports the U.S. Energy Information Administration.

In fact, energy intensity—energy used per square foot—was 37 percent lower (or better) in 2009 than in 1980. It meant a reduced use of coal, natural gas and nuclear fuel.

Why this progress? The EIA cites factors that include energy prices, shifts in fuel sources and stricter building codes. It also notes the broader use of more efficient technologies—from appliances and lighting to heating/cooling units, some of which were promoted via energy labeling programs such as the voluntary Energy Star.

That’s the good news. The EIA also gives the bad: “The gains from energy intensity improvements would have been even larger if it were not for consumer preferences for larger homes and increased adoption of home appliances and electronics.”

Two competing interests: trying to reduce energy usage but Americans, when they have the money, tending to purchase larger homes. Progress is being made on the efficiency front but the real gains would come if Americans had smaller and more energy-efficient homes. There are two possible courses of action:

1. Continue to try to convince Americans they don’t need such big homes. This might be done with psychological arguments (smaller homes will fit you better, feel more cozy), shame arguments (that size of space is unnecessary), environmental arguments (you are wasting energy), cost arguments (smaller homes could be cheaper both in purchase price and upkeep), or peer pressure (a smaller home may grant higher status or you don’t want to be the one who sticks out with your extra-large home).

2. Continue to keep improving energy efficiency so that the bigger homes aren’t as problematic. More passive houses? More net zero energy homes? Offer tax credits to improve energy efficiency?

In the short term, I imagine #2 is the most likely path with a small group continuing to work on the arguments of#1.

2.

Deciphering the words in home listings; “quaint” = 1,299 square feet, “cute” = 1,128 square feet

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An analysis of Zillow data looks at the text accompanying real estate listings:

Longer is almost always better, though above a certain length, you didn’t get any added value — you don’t need to write a novel. Over 250 words, it doesn’t seem to matter. Our takeaway was that if you’ve got it, flaunt it. Descriptive words are very helpful. “Stainless steel,” “granite,” “view” and “landscaped” were found in listings that got a higher sales price than comparable homes.

And there are words you should stay away from, especially “nice.” We think that in the American dialect, you say “nice” if you don’t have anything more to say. And then there are the words that immediately tell a buyer that the house is small: When we analyzed the data, we found that homes described as “charming” averaged 1,487 square feet, “quaint” averaged 1,299 square feet, and “cute” averaged 1,128. All of them were smaller than the average house in our sampling.

The impact of words seems to vary by price tier. For example, “spotless” in a lower-priced house seemed to pay off in a 2 percent bonus in the final price, but it didn’t seem to affect more pricey homes. “Captivating” paid off by 6.5 percent in top-tier homes, but didn’t seem to matter in lower-priced ones.

There are certainly codes in real estate listings that are necessary due to the limited space for words. But, as the article notes some of the words are more precise than others. If someone says they have stainless steel appliances, the potential buyer has a really good idea of what is there. But, other words are much more ambiguous. Just how “new” are some big-ticket items like roofs or flooring or furnaces? The big data of real estate listings allows us to see the patterns tied to these words. Just remember the order for size: cute is small, quaint is slightly larger, and charming slightly bigger still.

If I’m Zillow, is it time to sell this info to select real estate professionals?

LA McMansions prize interior space over backyards

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New LA McMansions tend to have limited backyards for a variety of reasons:

“Comfortable” translates to a desire for bigger spaces, more amenities and higher-quality materials than in the past, notes John Closson, vice president and regional manager of Berkshire Hathaway Home Services...In many cases, the yard is not the family center it used to be, says architect Hsinming Fung, director of academic affairs at the Southern California Institute of Architecture. “What a family would do together for entertainment value is no longer in the backyard or the frontyard,” Fung says. “Technology has completely changed the way we use space. They need the indoor space because they use it much more.”…

A simple — some say brutal — development equation is at work today: More square footage equals greater return on investment. “Obviously, the price of land continues to climb in Los Angeles,” architect Ron Radziner of Marmol Radziner says. “Even if the client doesn’t necessarily want a bigger house, they feel they need to have it as an investment to have it make sense.”…

One point generally acknowledged is that many people today do not want the expense and hassle of a big yard. “It’s not practical to have a big lawn these days,” Tighe says. “People are rethinking that, rightfully so.” But they do still want something of a yard, just not the way we think of it.

One complaint about teardown McMansions is they are built close to the lot lines, dwarfing other homes or open spaces. At the same time, I’m not sure about the concern for backyards. These spaces have also tended to be private spaces, even if they are outdoors. Many yards have fences and landscaping intended to keep others out of sight. Backyards are also a symbol of sprawl: every housing unit has its own outdoor space.

A stronger public argument might be made for front yards. As New Urbanists and others argue, these are important for joining the street and sidewalk with the private home. This is why many architects emphasize front porches – they can provide some of the same features of the backyard deck but do so in sight of the public, encouraging social life and presenting a more lively and green streetscape.

It will be interesting to see if arguments/discussions about McMansion regulations in Los Angeles include guidelines about backyards.

Plug and play 10 square feet Cubitat on display

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Toronto’s Interior Design Show featured a 10×10 square foot Cubitat living unit:

Cubitat is a 10-by-10-by-10-foot cube that houses a kitchen, bathroom, bed, laundry, and storage.

Once plumbing and electric are hooked up, the structure can theoretically turn any dwelling into what the developers are calling a “plug and play” living space that looks something like a giant’s Rubik’s cube and seems to beg to be painted in Mondrian colors…

The concept is appealing but problematic: For the moment, Cubitat comes assembled in one giant piece. So although it looked great in the large, light-filled exhibition space at the Toronto show, figuring out how to get this giant module through the doors of most existing structures is an obvious obstacle (unless you’re lowering it into a roofless barn or sliding it into a converted double garage).

The pictures are really interesting and hint at the creative possibilities of mass-produced small housing units. Yet, the biggest problem seems to be ignored: since a number of the features open outward (the bed, the kitchen, etc.), this unit is only as good as the larger space in which it sits. If you had a big loft – particularly with taller ceilings – you could plop a Cubitat or two right in the middle. But, what other spaces offer such options and provide another set of exterior walls?

Is the Biltmore Estate “the original McMansion”? No

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One TripAdvisor reviewer suggests the Biltmore Estate in Asheville, North Caroline was “the original McMansion”:

At first we were a little surprised at the price of admission but after all was said and done, definitely worth it. It is really an all day project. The tour through the house itself is kind of a slow line through but you do get to see a significant portion of the house, actually you see rooms on all 4 floors. It took us about 90 minutes to go through. Then there are the gardens which are very extensive. There were other tours one could take like a ‘behind the scenes tour’ which seemed really interesting but alas we had run out of time. Our lunch at the Stable Cafe was superb. At the height of the lunch rush we had a 45 minute wait so we went off to some of the nearer gardens for a half hour or so. The setting is literally what used to be the stable and the old horse stalls are booths now. The rotisserie chicken that I ordered is about the best chicken I can ever remember. Juicy, flavorful, cooked to perfection. Sometimes simple is best. And served quickly no less. We commented on that to the waiter who said, We know you have better things to do.

Visited October 2014

From all accounts, this sounds like a flashy and impressive house. Here is the opening description from Wikipedia:

Biltmore Estate is a large private estate and tourist attraction in Asheville, North Carolina. Biltmore House, the main house on the estate, is a Châteauesque-styled mansion built by George Washington Vanderbilt II between 1889 and 1895 and is the largest privately owned house in the United States, at 178,926 square feet (16,622.8 m2) of floor space (135,280 square feet (12,568 m2) of living area) and featuring 250 rooms. Still owned by one of Vanderbilt’s descendants, it stands today as one of the most prominent remaining examples of the Gilded Age, and of significant gardens in the jardin à la française and English Landscape garden styles in the United States. In 2007, it was ranked eighth in America’s Favorite Architecture by the American Institute of Architects.

This sounds like a classic case of (1) an anachronistic application of the term McMansion as well as (2) an instance where this is clearly a mansion. When it was built or today, the home is simply large – McMansions are often roughly 3,000 to 8,000 square feet and this home has 135,000 square feet of living space – and this wasn’t just some new money but real big money from the Vanderbilt family.

Perhaps the home’s most McMansion like feature is its borrowing of architectural styles with French and English gardens alongside French architecture. Here is Wikipedia’s brief description of the estate’s architecture:

Vanderbilt’s idea was to replicate the working estates of Europe. He commissioned prominent New York architect Richard Morris Hunt, who had previously designed houses for various Vanderbilt family members, to design the house in the Châteauesque style, using several Loire Valley French Renaissance architecture chateaux, including the Chateau de Blois, as models. The estate included its own village, today named Biltmore Village, and a church, today known as the Cathedral of All Souls.

Vanderbilt borrowed the imposing and monied architecture of Europe to convey similar ideas in the United States. Yet, over a century later, the home’s architecture is celebrated.

My conclusion? The Biltmore Estate is nowhere close to being a McMansion.

Builder magazine: are millennials ushering McMansions out?

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Builder continues the debate of whether millennials will help McMansions disappear:

But the millennials inhabiting high-tech, yet cozy student housing and apartments don’t have outsized space expectations. Over the next decade, their preference for the walkable convenience that often accompanies smaller living spaces will collide head on with their parents’ (and grandparents’) insatiable addiction for square footage.

Will millennials’ maturation force home builders to come up with walkable communities and smaller, more innovative homes that might, finally, kill the McMansion? Or will it lead millennials to make the decision to abandon walkability and convenience for more square footage?

No one really knows the answers to these questions, but trends demonstrate that Gen Yers—many of whom currently are living in student housing and apartments—have different expectations than the generations before them. Even if they eventually end up in single-family homes in the suburbs, their acceptance of efficient spaces might change the game for many builders. But without public policy changes and rethinking what home value really means, their preferences for efficient spaces may do little to cut square footage…

Despite these testimonials, even the most resolute urbanist wouldn’t proclaim that millennials are going to forever eschew the size and acreage of the suburbs to gather in cramped apartments in the city. For many, life will evolve, priorities will change, and the desire for a yard, more space, or a good school system for children will win out over having multiple trendy bars down the street…

Even if millennials do follow their parents’ path to the suburbs, many architects predict (and hope) that the efficient designs they’ve become accustomed to in college and apartments will follow them to their single-family home.

As noted elsewhere, no one really knows what will happen yet there are plenty of people with opinions and hopes. Give it a few years and decades to play out.

At the same time, even changing tastes among millennials as a group doesn’t necessarily mean the disappearance of McMansions. Millennials are unlikely to completely kill McMansions. Like now, there could still be a significant minority of that generation that still want McMansions and because of the higher profit margins with such homes, there will be builders ready to build them. Additionally, there will still be a lot of existing McMansions that, like other homes, will continue to generate sales and interest. Unless, of course, there is some sort of rapture for only McMansion owners – perhaps this is the sort of scenario those who dislike McMansions could get behind.

Question: “Are MOST homes built in the 80s or later ‘McMansion’ style?”

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One post at city-data.com asks whether McMansions have dominated housing since the 1980s:

Are MOST homes built in the 80s or later “McMansion” style?

Would you say the majority of homes built in the past 35 years in America have that ugly vinyl siding and are made of cheap materials?
The discussion thread goes in some different directions. Most of the responses have to do with the particular traits of McMansions and whether vinyl siding and cheap materials is enough of a definition. As noted, homes of a variety of sizes could have these features. The stereotypical features of McMansions often include lots of square feet, two story foyers, impressive fronts yet a neglected back and sides, multi-gabled roof, and an imposing garage.
But, the direct answer to the question regarding the number of McMansions is a clear “no.” Even at their peak, McMansions – defined by square feet – were never even a significant percentage of the market. Here is an update on this data from the Washington Post:
In 1973, the median newly-completed single-family house was 1,525 square feet; forty years later, in 2013, it was 2,384 square feet. That is a record high.
That’s just the median, of course. But the share of newly built homes that are at least 4,000 square feet is now at 10 percent, equaling the series’s peak in 2008, after having dipped slightly immediately after the crash. The share of homes that have at least four bedrooms is also at a historical high, at 44 percent. That’s almost twice the share in 1973.
At the same time, McMansions became quite a popular topic, whether viewed as emblematic of poor architectural quality, teardowns, excessive consumption, or suburbia or tied McMansions to the housing bubble of the mid-2000s. From some of the reports, you might think there are a lot of these homes built each year but this is not the case. Just to repeat: most Americans do not live in McMansions, even in the suburbs or more conservative areas.

Wait, they are “practically giving away” “suburban mega-McMansions”?

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Curbed Chicago returns to a listing for a 19,438 square foot suburban home and notes the reduced price:

Demand for suburban McMansions is so low that some owners are practically giving them away. Take for instance this totally redonkulous 19,438 square foot home set on a 10 acre parcel of prime Barrington Hills real estate. It’s gone on and off the market since 2010, when it was originally listed for $10.5 million. Today, it can be had for $4.75 million. Its ask is now less than half of what it was when it first listed four years ago. This McMansion joins many others in the Barrington area to take huge price chops. While the value of most homes in the city have begun to rise again since the 2008 foreclosure crisis, large suburban McMansions continue to feel the hurt. The good news is, if you’ve always wanted to live the 1990s MTV Cribs lifestyle, it can now be had for about half the price.

Large home with lots of features. Yet…

1. The price may have been cut by half but it is still $4.75 million. In fact, this price reduction may not indicate that the owner is ready to give this away but rather that it was overpriced to begin with. I think the piece is trying to imply that the demand for “mega-McMansions” is low so the price was cut but we would need some more evidence before jumping to that conclusion.

2. What exactly is a “mega-McMansion”? The square footage puts this home way out of reach of the normal suburban McMansion owner as does the price. The home may not be pleasing to everyone – I’m thinking the pool room looks most desirable – but it is a scale above McMansions. Again, tying a home like this to the term McMansion is intended to add another layer of criticism that “mansion” just doesn’t add.