The Death of the McMansion

[n2doc]

By Witold Rybczynski
Posted Wednesday, May 11, 2011, at 7:24 AM ET

A McMansion
The U.S. housing market is going through an adjustment of historic proportions. Before 2006, when the housing slump commenced, American home builders regularly built as many as 2 million new houses annually, rarely less than a million. This amount was needed to keep up with new household formation, immigration, homeowners moving up, and replacement due to obsolescence. Since then the number of new houses built has dropped drastically—the seasonally adjusted annual figure announced by the federal government in February 2011 was about 400,000! What's going on?


The recession, obviously. High unemployment and unease about the economy have made potential first-time homebuyers leery of entering the market, and many have decided to wait on the side lines. Although house prices have fallen, few are convinced that they have bottomed, and no one wants to buy a house and see its price decline. The large number of foreclosed (or about to be foreclosed) houses on the market, which account for no less than four out of 10 sales of existing homes, likewise dampens demand for new houses. And those willing to take the plunge discover that, despite low interest rates, lenders who were burned by the subprime mess now require large down payments. The other chief cause for weak demand is a slowdown in household formation—the U.S. Census reports that the rate of household formation is currently lower than at any time since 1947, as people put off getting married and starting a family. According to my colleague, real estate economist Peter Linneman, the marginal household size, which has historically hovered around two or three, shot up to more than six in 2009 and 2010, the result of doubling-up and moving in with relatives.

Common wisdom is that eventually the housing market will stabilize. Linneman expects housing to revive between 2012 and 2016. The young families that are sharing space will definitely want to move into their own homes, but what sort of homes? The increase in demand for rental housing has reinvigorated the apartment market, and some new construction has begun. What if people get used to renting? Owning single-family houses represents a long-established tradition that the U.S. shares with many countries (Canada, Australia, the United Kingdom, Ireland, the Netherlands, Norway), but 10 years is long enough for traditions and behavior to change. It is likely that in the future multifamily housing will represent a larger share of the American housing market than the one-in-five new dwellings that has been the historic norm.

What about single-family houses, which will still remain for many people the home of choice? There is some evidence that urban townhomes and infill housing are more popular, as rising gas prices increase the cost of commuting. Higher energy costs also affect heating and air conditioning, which may have the effect of discouraging homebuyers from purchasing large houses with soaring entryways and expansive family rooms. While the evidence is fragmentary—the current reduction in average new house sizes has more to do with the preponderance of first-time buyers than an overall shift in demand—it is clear that the long recessionary cold-shower will dampen the exuberance that characterized the boom years of 2000 to 2005. That will mean smaller houses closer together on smaller lots in inner suburbs, fewer McMansions, and fewer planned communities in the distant hinterland. An alternative scenario is that American optimism will prevail and it will be business as usual, as happened during the boom of the 1950s following the Great Depression, or during the period following the Energy Crisis of 1973, when car buyers, after a brief flirtation with Japanese compact cars, embraced minivans and SUVs. But I wouldn't count on it.

http://www.slate.com/id/2293106/

[joeybee12]

1. I think Grave Dancing is appropriate here...knr

[progressoid]

7. +1

[elleng]

2. 'Funny,' this looks like place where I found a room,

after left family house due to assault 4+ years ago. Owner/landlord had bought the McM, not sure why, after original family unable to finish it, so landlord rented out (still does, I think) 5 or so rooms, with kitchen privileges. Pretty good deal, and my first and last mcmansion relationship!

[izquierdista]

3. They were just ahead of their time, that's all

They had anticipated that household size was going to double. And who knows, it may double yet again. You can easily fit an extended family of 16 in some of those McMansions.

[LiberalLoner]

5. I think that's what's going to end up happening to them. I guess it will work out mostly. n/t

[Quantess]

29. I would love to see an extended family of immigrants move into one of those places.

Wouldn't that liven up the neighborhood?

Especially if they bring their cultural trappings with them, such as loud ethnic music, or a bunch of fixer-up cars parked out in the front yard. Grandma hanging up the laudry on the clothesline.

[NotThisTime]

30. Because we know the anglo's don't take care of their extended family? That is offensive

We have a large house we take care of our extended family and have for over a decade, who are you to judge?

[Quantess]

32. I didn't mean it offensively.

I just meant, I seriously would like to see that happen in a square, whitebread neighborhood of mcmansions, where a single couple ramble around in the huge house, filled with knick knacks.

I really would like to see how the neighbors responded to that.

It really would make more sense for an extended family to move in to a huge house like that.

I am sarcastic a lot of the time, and I'm sorry if you misunderstood my intention.

[LiberalLoner]

37. Actually they passed a law in Woodbridge, where I'm living at the moment,

that forbid multiple people living in a household or something like that. It basically forced many of the Hispanics to move from Prince William County to Fairfax County instead. That's what happens, the uptight people pass laws targeting the people and habits they deem "undesirable."

[leveymg]

43. Fairfax Co. has the same ordinance - has for decades - but it's not enforced here.

The County says that enforcement would contribute to an already growing homelessness problem. That is probably true. But, I do wish the seven or so unrelated people in the rental house (not a McM) next door would not continue to park one or more of their five or six cars in front of my driveway. I ask them not to, but one of them reappears every morning.

I have lived with this for the last eight or nine years or so, ever since the Wall Street Journal published an article about a new business model for residential real estate speculators buying up chunks of older single-family housing in the inner suburbs, subdividing these small houses, and making a huge profit.

And, people wonder why a lot of folks flee to the outer suburbs . . .

[LiberalLoner]

44. That doesn't sound good at all. I hate when people park in front of my

driveway. We have a bus stop right at the corner of our property and the parents drive their kids to the bus stop (from less than one block away usually, sigh...) And they have a habit of blocking my driveway. I have had to several times ask them to move so I could get to my doctor's appointment which is usually in the morning. They always move and never complain but to be honest I wish they would park across the street or something so my driveway wouldn't get blocked in the first place. I have empathy for your situation.

[leveymg]

45. Thanks, but I'm not voting GOP or for border fences or Arizona laws or any of that crap.

Just wish that everyone was handed a manual when they entered the country, "How to Be A Good Neighbor", Chapter 1: Suburban lawns and parking. Chapter 2: The back yard is for entertaining.

Kinda like "The Handbook for the Recently Deceased" in Betelgeuse

[LiberalLoner]

47. LOL thank you for the laugh! Yeah, when we lived in Alexandria we had

neighbors. The main tenant was a very nice lady who worked hard and had two adorable children who used to come over to my townhouse for a snack in the afternoons after school. I thought the world of that family. But they found it necessary because of economics to rent three rooms out to other tenants and sometimes those tenants weren't so great. There were drug deals over the back fence I witnessed (kind of freaked me out), fist-fights and other threats of violence, maybe due to the drug thing, and then the guys would drink all Friday and Saturday night and throw their beer bottles into our back yard which kind of sucked. Plus the noise they would make late at night sucked. They were all from Central America originally, and I guess to them, that kind of behavior was okay. Like you, I wished they could be given a guide on how to be better neighbors or maybe a trip to "Intervention" on TV so they could get clean and sober.

I grew up with an alcoholic and I can tell you, they usually bring trouble. It sounds prejudiced against drug users and alcoholics, I know, but I find it's true. They often have wonderful qualities but as long as they are using, they bring trouble, that's just the truth of the matter.

[KittyWampus]

51. You mean laws that forbid multi-FAMILY rentals? You think 15+ people should be allowed to live

in a house? There is such a thing as fire safety and environmental impact (cesspools overflowing).

On Long Island there have been tragedies where many Hispanics were crammed into houses and fires due to extension chords, overcrowding.

[kestrel91316]

4. These things are a blight on our landscape, and monuments to

conspicuous consumption.

Oh, and the properties they are on are a waste of perfectly good farmland.

[kentauros]

20. What has happened far too often in existing neighborhoods,

is that people will come in, raze a perfectly good single-story, brick or wood-facade house, and build one of these monstrosities. There is next to no lawn left, the driveways are those short, stubby things that then require they park all their SUVs on the surrounding street that's already packed up by the other neighbors that have done the same thing. Sometimes, you can also see the industrial-sized a/c unit needed to cool the place, though I've also seen two or more of the largest "family" sized units together.

Having a wide-open lot is more appealing to me than cavernous rooms, that then require far more effort to clean than a normal-sized home, or the rooms of the house they tore down. All the way around, it's excessive consumption. I'd rather seen them taken apart, and the materials re-used in Habitat for Humanity homes :)

[kick-ass-bob]

46. Edited for a house example: Yeah, they are doing this in part of Raleigh.

But, one house that they 'merely remodeled' (to the tune of some $400,000 worth) has been on the market since 2006 at least thru last year.

Yes, 2006.

They bought a single story house for roughly 250k and poured 400k more into it, looking to sell at 1M, then 900k, then 800 - which was about 500k over the neighborhood.

We fled to a small town suburb closer to my work so I don't know if it has sold yet.

Edit:
Found the house, still not sold, but they bought it for 350k and now the tax assessment is over 700k.

Found it on realtor.com: list price is down to 524k
http://www.realtor.com/realestateandhomes-detail/1109-Glen-Eden-Dr_Raleigh_NC_27612_M66312-48312?source=web
Tax records:
http://services.wakegov.com/realestate/Account.asp?id=0043129&stype=addr&stnum=1109&stname=Glen+Eden&locidList=&spg=1

make sure to check out the before and after pics on the tax pages

[CoffeeCat]

53. They'll never sell it...

With housing prices lower now, and new-construction lagging--who in the world would opt to pay 500k+ on a house
like that--when you can build new and get just as much (if not more).

If you've got an older home to sell, you've got to price it much lower. People can just as easily build and
buy brand new--you have to give them some incentive to purchase an existing home.

That home is priced to recoup the 400k they sunk into it. Fact is...those rennovations are not worth 400k to a
buyer.

[kentauros]

54. Yep, another example of "property-flipping".

I really wish that practice was severely limited, like you have to remain the owner of a property for a year or more, before you can resell it. That would take some of the profit motive out of the picture, especially if they had to pay property taxes for a few years (like in your example.)

I noticed, too, that they cut down at least two trees, while the realtor lauded the property for being "wooded". The one closest to the house had to be cut, because they had to have that second garage slot, but I don't get why the one out in the front yard had to be removed. They could have made a tidy profit by upgrading the interior, leaving the structure alone and making a better landscape while keeping the trees. However, I blame the mentality put out by the likes of HGTV, that bigger is better and everything must be made out of stone :eyes:

[kick-ass-bob]

58. I was flabbergasted when I saw them redoing that house.

They gutted the entire place and clearcut the front so they could have the circular drive and a fountain. The initial list price was not quite $1M, but over 900K, in a neighborhood where the tax values run at roughly 450k.

They did everything wrong, and now they have paid for it. $6500 in property taxes for 5 years + upgrades+ other carrying costs.

It's probably a short sell at this point.

[Jackpine Radical]

34. Not a waste of farmland--

Just turn the McMansions into farm communes.

[kestrel91316]

38. Excellent idea!

[KittyWampus]

52. On what land? McMansions are built under the plan that people want indoor space so outdoor space is

limited.

[Jackpine Radical]

55. Depends on where you are, I guess.

In my neck of the woods, you sometimes see them sitting in the middle of a 40 with nothing around them except the attached 4-stall garage & 40x80 pole building for their toys (boats, snowmobiles, ATVs, "estate tractors," etc.

[PassingFair]

6. My husband and I used to drive thru these developments and ask "Who can afford these?"...

Apparently, no one could.

[Liberal_in_LA]

11. yep. Buyers were counting on being able to sell them for more in a few years

[eissa]

25. We used to do that to, and then we bought one

Yes, I own a McMansion, don't judge me! Of course we bought it when the market tanked for a fraction of what the original owners paid. It's still a nice neighborhood in a good school district. It cost less than a older, non-McMansion home that needed some remodeling. Never thought I'd buy one and not exactly my dream home -- very typical of most tract homes with all house and no lot. But I've always been told to buy low, and that's what we did. We plan on staying for about a decade when the youngest finishes high school. If the economy has turned around by then, hopefully we'll downsize into something half the size of this monstrosity.

[PassingFair]

28. Hey, no judging here....

A deal is a deal!

My problem would be the heating & cooling bills.

I'm paying $120/month in electric and
$150/month in gas for my little ranch!

[eissa]

49. I could live with the bills, what irks me

is hearing everything your neighbors say or do. And by neighbors, I don't just mean the houses next door, but usually 5-6 houses down the street. It drives my husband nuts; he shuts the window in our bathroom anytime he's in there because he's afraid everyone will hear him fart.

And honestly, the bills are not that bad; house is surprisingly energy efficient so we're not paying that much more than what we did in our previous home which was half the size.

And agree with SoCalDem-- a lot of these homes are empty because the owners have become slaves to their mortgages. We live in a commuter area, so most people are either working or on the road most of the day. It blows my mind what people originally paid for these character-less boxes, but there honestly aren't many of those remaining. Most of them have abandoned their homes and they're now either being rented out or scooped up by people like us who waited out the boom.

[HughBeaumont]

26. I drive up and down "Mansion Row" in this city and say the same thing.

That's either CEO, blueblood retiree or Pro Athlete money that can scoop up lakefront property. McMansions are usually surgeons or old attorneys. Or someone who likes a mortgage up to their eyeballs.

[SoCalDem]

40. All house-no life

There are a lot of people out here who spend 4 hrs a day commuting to and from jobs they hate (if they are lucky enough to still have jobs), and have a huge mortgage payment, so their dogs & cats can lounge all day in a McMansion. Their kids are trundled off to equally expensive daycare, and weekends are spent doing the mundane chores that no one has the energy to tend to during the workweek.

It's odd too when you realize that modern families are usually smaller than they used to be. Boomers all over the place were raised in 1K or less houses, with one bathroom , and now these behemoth houses are somehow "necessary" to raise 1 or 2 kids.

I recently found our old house on Zillow, and was shocked to be reminded that it was 1100 sq.ft.. It seemed big enough, even though our two younger kids shared a room with two cribs in it, and our living room was barely large enough for our furniture.

Our current house (for 33 years) only has 1547 sq ft, and it's plenty big enough. There was a time when we wanted a bigger house, but lucky for us, we were too lazy to make it happen..

Unless there are some serious zoning changes around here, those big empty (some unfinished) McMansions will stay that way. We have zoning rules that prevent multiple occupation. They are strictly one-family only, so people who rent rooms & get caught would face some steep fines.

[smirkymonkey]

59. ....and who could be tasteless enough to want to live in one.

They are a blight on the landscape, I don't care how much money they cost. They're hideous.

[Leopolds Ghost]

8. A lot of these McMansions are becoming suburban barrios with multiple units. Not "will", "are".

It's happening. I know people who live in these setups.

[KamaAina]

9. Hemet, CA, for one, is placing Section 8 tenants in vacant McMansions

complete with the granite countertops, etc.

[Liberal_in_LA]

10. One family to a mcmansion?

[KamaAina]

14. Not sure they went into that

but there seem to be enough empty McMansions to go around.

[Leopolds Ghost]

15. That'd be a waste. Nah, they're cutting them up into multiple units like they did with Victorians

Name one inner-city Victorian mansion that is not today either a tenement, condo or museum.

[marions ghost]

23. yep

that's what needs to be done. Chop em up for apartments or condos. Some could even be hotels or B &B's if private enough. Doesn't solve the parking problems though...

[elleng]

13. I lived in one, see #2, but no 'barrio,' good deal, nice place, decent people.

Obviously depends on neighborhood + landlord.

[Leopolds Ghost]

16. I didn't mean it in a bad sense. But many of them are pioneered by immigrants

With a substantial white working class moving in later.

After all, the people that BUILT the McMansions are usually first to hear about a dead development being potentially open to subtenants, foreclosed owners holding over and renting them out to "handymen", etc.

It's the huge informal economy of the future... and unlike the inner city, the Federal Government doesn't have the resources to go after these neighborhoods except the only way we know how... by keeping the poor out to begin with.

Because these single-use neighborhoods are founded on a principle of segregation, once you let anyone else in, there is nothing there for the original owners to latch on to. They are socially dead spaces in their current, one family per acre form.

That's what happened to Harlem when it was a white suburb during the 1890s financial crisis.

[annabanana]

42. A little "high-densitizing" seems reasonable for these monstrosities.

Two birds, one stone and all that.

[Hannah Bell]

62. that's what happened to a lot of city mansions in the gilded age. they were divided into

working class apartments.

first time i went to london, 1981, hiked through miles of stuff like that -- rooming houses that had seen better days, miles & miles & miles it seemed like. it was such a weird landscape to me, as the biggest city i'd ever seen up to then was vancouver bc.

[JHB]

12. Why, NO ONE could have seen this coming...

For over a decade seemingly all the new housing was McMansions or Luxury apartments and townhouses. The only lower-priced new units were in over-55 communities.

Too expensive for most people, especially those starting out.

But that's the deregulated "free market" for you: all the players shoot for the high-end demo, because building lower isn't profitable enough for them.

[Leopolds Ghost]

18. US Housing market is founded on a principle that 80% of the new housing is for the top 10%

According to INDUSTRY statistics. And this is FULLY ENFORCED -- if they can't price it for the top 10%, it doesn't get built and the development market slumps. They buy up "depreciated" neighborhoods and sit on them, letting them "fully depreciate" until they can get top dollar for new residents. Nothing but TOP DOLLAR will suffice.

Anyone attempting to de-gentrify a top-dollar neighborhood will get drummed out of the realtor profession as a block-buster.

[Hannah Bell]

63. They buy up "depreciated" neighborhoods and sit on them, letting them "fully depreciate" until they

can get top dollar for new residents."

currently happening in detroit.

and imo, they/their friends target neighborhoods & whole cities for ghettoization.

turning slums into new middle class areas & middle class into slums; they make money on both ends.

[thereismore]

17. In this case I am grateful for property taxes. It's the one thing that kills these monsters. nt

[Dappleganger]

19. Remember all those old mansions from the early 1900's?

Thousands of them were lost and then divided up into tiny apartments. Perhaps they should consider doing the same.

[cordelia]

22. I lived in a house kind of like that

in Salt Lake City in the 1980s. It was said it was an old polygamist's mansion, and that the upstairs was for one family, and the downstairs for the other.

Don't know if the story was true, but I loved that apartment better than anywhere else I've ever lived.

[Sherman A1]

64. Except those older homes

were built to much higher standards. These new ones may not hold up. My B-I-L lives in one and the construction was frankly pretty shabby.

[Tierra_y_Libertad]

21. A death as worthy of mourning as the death of disco.

[WinkyDink]

24. Young couples seem not to want to wait for their Big House.

[Shireling]

27. Yeah!!!!!!!!!!

Those ugly things clutter up the beautiful green hillsides.

[Fire1]

31. There's a monstrosity still being built after almost two years

around the corner and just outside our subdivision. I just know it's a developer waiting for a buyer that he's never gonna get. It sits in a lovely wooded area that could've been the home to many animals. I hope he loses his shirt, the greedy dirt bag.

[bluedigger]

33. My brother and his family live in the basement of his wife's uncle's McMansion.

Two bedroom walk out apartment. Their rent is still too damn high, though...

[Shagbark Hickory]

35. This article is soooo 2008. Now its clear the mcmansion isn't going anywhere. nt

[chrisa]

36. These houses are (or hopefully were) an atrocity.

This is just my own personal opinion. I would be fine with this if it was housing for all. However, McMansions were cookie-cutters built on borrowed money (heavily encouraged by Mortgage companies knowing that they would never be able to pay it back in a million years) that were monuments to our broken national business model.

Let's not make the mistake of blaming the home buyers on this, though. They were the victims of a sick game by the Mortgage companies.

This is my favorite / simple website:

http://www.businesspundit.com/sub-prime/

[marions ghost]

39. agree --it's not a blame the victim thing

these steroidal bunkers were over built, over-hyped, over sold. The builders made a bundle and in many cases buyers lost money. They were exploited.

These "houses" are also ridiculous for small families, couples or singles. I actually know one single person living in 5000+ square feet. I have nothing but pity, certainly no misplaced righteousness or judgment.

[ThoughtCriminal]

41. The house of 17 Gables

Economics and waste only surpassed by pure ugly.

[NNN0LHI]

48. Got one of these white elephants in my subdivision that won't sell

The property taxes are $18,000 per year. I couldn't afford the taxes or even to put a new roof on it or run the two air condition compressors even if it was given to me free and clear.

Don

[Arugula Latte]

50. Where will we park the Hummers, though?!

:cry:

[Patiod]

56. the older I get, the better a ranch house looks

We live in an older split-level. The size is actually perfect - not too big, not too small, and no central air (so we can cool only the room we're in, which works for us).

But the stairs are killing me!

[Fire1]

57. That's exactly why we bought a ranch. n/t

[LynneSin]

60. I can see alot of folks moving back to the cities

I just don't understand the appeal of the suburbs anymore. Cookie Cutter homes that are made cheap, overpriced and require that you drive an hour each way to work. That commute not only is expensive but it takes time away from your family too. Two hours on the road could be better spent getting an extra hour sleep or having family time with your kids.

[Leopolds Ghost]

61. According to Minority Report, They're a great place to get black market eyeballs.