McMansions will be on the rise again

The Orlando Sentinel ^ | November 11, 2010 | Beth Kassab, Business Columnist

[2ndDivisionVet]

The McMansion, the mass-produced, super-sized home that saw its heyday earlier this decade, is poised to resurrect itself from the ashes of the real estate collapse.

A few months ago, real estate site Trulia declared, "The McMansion Era is Over."

Just 9 percent of the people surveyed by the site said their ideal home was more than 3,200 square feet. That news came on top of data from the National Home Builders Association that the median size of new homes dropped from 2,268 square feet in 2006 to 2,100 square feet in 2009.

The implication is that the recession has caused us all to abide by a new mantra that less is more.

That may be true when it comes to cars and over-the-top spending — the Hummer and Christmas shopping budgets that end in three zeros are long gone.

But when it comes to our homes, there's already evidence to suggest Floridians will still take as much square footage as they can get.

Meritage Homes is marketing an eight-bedroom, 5,100-square-foot model in several Central Florida developments that is proving to be a top seller.

The home, known as the Del Rio, perhaps best illustrates the new McMansion. Its architecture is uncomplicated, making it less expensive to produce at a more affordable price. It also provides ample space that is energy efficient for today's families that find themselves taking in an older relative or adult child....

[2ndDivisionVet]

Makes sense: If you have two, three or four generations under one roof due to the Obama depression, you need a lot of space.

[marron]

To me, the whole “McMansion” thing was always a sneer at people deciding for themselves what they wanted and what they needed.

Just like the whole “SUV” controversy, where again people decide what they want and need, while others sneer and try to use government to stop them. If you see the need and are willing to pay the cost, that should be the end of the discussion.

[LibLieSlayer]

Why that is downright American of you! Careful... obama does not like patriots.

LLS

[griswold3]

The trend is starting for the small cottage in the back yard just big enough for mom and dad while the main house is average.

[mosesdapoet]

Pardon my cynicism but this sounds like a developwr with a lot of Plorida ,where it gets pretty hot,) air to sell.

[Grim]

Oh yeah! Things are REALLY looking up.

Last Hurrah for Housing

Case-Shiller is a backward looking index. The increasing number of foreclosures, the complete collapse in new home sales, a massive increase in inventory, and the end of tax credits all suggest we are near the end of the line for this bounce in home prices.

Interestingly, even the home builders are against another home tax credit. Is that reflective of the massive distortions caused by the credit, the realization the tax credit was useless, or the fact that homebuilders recognize there is little chance Congress will back another tax credit?

Regardless, here's the deal: New Home Sales Consensus 330K, Actual 276K, a Record Low. As a followup please see How Many New Home Sales Was That?

Expect to see new all time low prices in some cities later this year or next year as pent-up demand dries up along with incentives that merely brought that demand forward.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

[tbw2]

Mother in law suites or boomerang kid cottages can be turned into a rental in some areas.

[hoyt-clagwell]

Pardon my cynicism but this sounds like a developwr with a lot of Plorida ,where it gets pretty hot,) air to sell.

This ^^^^^^^^^^. My dad and I built spec homes back in the 1990's. We still receive literature from the architectural firms. Everything I have been reading is the trend is people are wanting smaller homes but very quality built.

[mosesdapoet]

Yea..I know I have a buddy of mine down in Boynton and Palm Beach coutnies who tells me the place is loaded with foreclosed McMansions... One way I think these can be dumped is if their sold as a relative housing. That menas sold to a family group like 3-4 family units which are all related to each other. But then zoning has to be adjusted and the structures modified for privacy to allow this.

[mosesdapoet]

Yea..I know I have a buddy of mine down in Boynton and Palm Beach coutnies who tells me the place is loaded with foreclosed McMansions... One way I think these can be dumped is if their sold as a relative housing. That menas sold to a family group like 3-4 family units which are all related to each other. But then zoning has to be adjusted and the structures modified for privacy to allow this.

[Neidermeyer]

You can buy a nice 30-35’ class “A” RV for under $20k (or a 32’ trailer for $8k), park it on the side of the house and have instant rental income...

[JerseyHighlander]

Beth Kassab is just cheerleading, the Orlando Sentinel is one and a half feet into the grave already, without real estate listings the newspaper is going to go bankrupt.

I’ll put it bluntly, in the Orlando metropolitan statistical area, there is now an INFINITE supply of McMansions.

What I mean is, there is now a supply of
MLS listed +
Foreclosed +
Shadow Inventory +
90+ day deliquent mortgages
in the single family residence category priced at over 400K to surpass the average length of home residence for householders who buy a 400k home in Orlando MSA.

Until such time as tens of thousands of new householders move into McMansions that already exist in the Orlando MSA, there will never be again a new boom in McMansion construction.

On top of that, the average median salaries of the top decile of Orlando MSA households can still not support the current prices of the existing McMansion inventory, Orlando has at least a 7% further drop in prices just to reach a sustainable Case-Shiller market equilibrium, or the rent equivalent market equilibrium.

[Neidermeyer]

The zoning changes won’t be approved ... you will probably see a great many “rooms for rent” ,, renting 1 or 2 spare rooms at $75-$100 a week pays a major part of the bills.

[JerseyHighlander]

are you the grim from nj re report blog?

[2ndDivisionVet]

So if an individual or couple/family have the means, now is the time to buy a nice home for pennies on the dollar?

[dragnet2]

McMansions will be on the rise again

Oh sure, and they'll heat them with cheap gas, cheap oil, and cheap air conditioning....

Big fat bloated homes ain't never coming back...

[21twelve]

The preacher on Sunday was talking about not getting so caught up with “keeping up with the Jones”. He mentioned one of the congregation had told him “My wife and I had talked a long time about down-sizing. We had a $700,000 home, and now we have a $400,000 home. And we didn’t even have to move!”

[FromLori]

The total visible and shadow inventory was 6.3 million units in August, up from 6.1 million a year ago. The total months’ supply of unsold homes was 23 months in August, up from 17 months a year ago. Although it can vary and it depends on the market and real estate cycle, typically a reading of six to seven months is considered normal so the current total months’ supply is roughly three times the normal rate.

http://www.corelogic.com/About-Us/News/Shadow-Inventory-Jumps-More-Than-10-Percent-in-One-Year,-Pushing-Total-Unsold-Inventory-to-6-3-Million-Units.aspx

[RegulatorCountry]

These truly ugly vinyl boxes are actually selling here, not quite that large but 4-5 bedrooms, “flex” room that can serve as another, over 3,000 sq. ft. but cheap, cheap, cheap. Slab foundation, no architectural detailing or embellishments whatsoever, just maximized space.

I have to admit, the cost per sq ft is amazing, but there’s nothing to want about them, they’re just square, flat sided, tall and deep with a shallow pitched roof, with as few windows as the law permits anywhere but the front facade, and even that is plain.

There’s nothing remotely “McMansion” about these things other than the space.

[dragnet2]

I’ll put it bluntly, in the Orlando metropolitan statistical area, there is now an INFINITE supply of McMansions.

McMansions will make a come back when 6 ton family station wagons, with large gas sucking V-8's become popular again...