Will Bursting Bubble End The McMansion Boom?
Some readers are interested in the ‘McMansion trend.’ “Another thing I’ve been pondering….Will the smaller home soon become king? Where will the McMansion-ites be going? (Home style) McMansion-ettes? I.E. 1500 ft Empty nester homes are still being stocked with marble and high end cabinetry.”
“Will granite still reign but in a smaller kitchen? With oil prices rising, will older homes w/7.5-8′ ceilings become more desirable? I seem very stuck on where people will be going to in this panic. Anyone care to prognosticate?”
A reply, “I think you are right on. I know that I am thinking that in a few years I would like to have a custom home that isn’t too large, we could afford it now, but we will wait for the bubble to blow over. Less square footage means lower heating bills and taxes. Lower ceilings not only have lower heating, but are easier to maintain, I don’t like painting or dusting 15 feet up on a ladder, which is what happened at our last home. 9 foot ceilings are the max as far as I am concerned for our next home.”
Another added, “What will happen to many of the McMansions recently built in flood plains up and down the San Joaquin Valley and the Sacramento area?”
MSN Real Estate has an article titled, ‘The swelling McMansion backlash.’ “Release the zoning hounds: The McMansion backlash has begun. From Atlanta to Austin, Texas, and beyond, more governments have started imposing stricter building limits and even temporarily halted new construction while they try to get a handle on the explosion of these 4,000- to-10,000-square-foot homes, sometimes sneeringly called ‘garage mahals,’ ‘Hummer houses’ or ’starter castles.’”
“Austin typifies the McMansion craze, and the backlash that’s followed. Several of the city’s neighborhoods like Tarrytown and Travis Heights have seen an influx of large homes, said Kathie Tovo, president of the Bouldin Creek Neighborhood Association, who lives in a ‘funky, fun’ area just south of downtown that also has seen some change.”
“Just down the street from their modest home, Tovo and her architect husband bought a house as an investment. After they finished remodeling it, the home next door got knocked down and replaced by a 4,000-square-foot building housing two condominiums. ‘What had been not a tiny, but a modest-size and -scale cottage, has been replaced by something hugely bigger than what’s the scale along that street,’ Tovo said. ‘The entire yard is now lined by this massive house,’ she says of her house.”
“Tovo and others worry that the homes are not only out of character with many neighborhoods, but that they put stress on older infrastructure and too quickly raise property values and thus tax rates. This forces out longtime residents. ‘Some people have made the argument that this is infill,’ Tovo said. ‘But it really isn’t; you don’t end up with more people, you just end up with the same number of people in bigger houses.’”
A related story in the Baltimore Sun. “‘A million-dollar house is not a big deal anymore,’ said (realtor) Tim Rodgers. ‘It will be a nice house, but it’s not ‘Wow.’”
“But sometimes, real estate agents say, the million-dollar prices are applied by sellers whose houses are really worth $850,000 or $900,000 but who can’t resist tacking on an extra digit, just because they think they can.”
“Often, they can because buyers are as willing to get into the $1 million range as sellers are. They have mountains of equity in their current homes, and the proliferation of interest-only and other exotic loans makes a stretch into seven figures seem attainable for many more people than was the case a few years ago.”
“‘If they have to pay $500,000 for a lot, they’re going to want to build a house three times that,’ said (broker) Pat Hiban.”
Hopefully plain old good taste will end the McMansion boom.
Yes- people do seem to have more money than taste, Or, more credit than taste.
“Common sense” I think is what you mean. Financial hardship can promote and instill that. “Taste” is a different thing altogether.
No, taste is what I mean. Those McMansions are just plain Fugly.
“Those McMansions are just plain Fugly.”
Indeed they are!
My point, admittedly a bit esoteric, is that the financial realities of a housing crash and an energy crisis might make the Macmansion fools consider a smaller and more energy efficient home. But not necessarily a better looking one. Like you said, they have bad taste, it will remain so.
Well, let’s put in this way: No one would confuse one of those McMansions with the mansion on the Tara plantation.
When I first moved to DC, I noticed that a lot of the close-in neighborhoods had tiny houses. A good example of this is Burke, where you have a nice mix of 4 bedroom and 3-bedroom homes on nice plots of land, all built from the mid-70’s to mid-80s. The 4 bedroom homes are pretty nice, but the 3 bedroom homes aren’t very desirable — nasty split-levels, and more often then not, only a 1-car garage.
I thought to myself “If I had the money, I’d buy one of those (3BR) houses, tear it down, and build a newer larger house.” After all, who want’s to live in a 1200 sqft house without a garage?
And then I started hearing about McMansions. And then I saw them first hand. Holy crap, you’ve got 5000 sq/ft houses pushed out to the property boundaries! Whereas I still think the idea of tear-downs has merit (tearing down an old 3br in a 4br neighborhood and replacing it with a 5br), these McMansions are not what I envisioned. It’s not just that they are oversized for their plot of land, but many (not all) are architecturally tacky.
And what is it with this brick/vinyl fetish around here? For those who haven’t seen it, the front of the house is brick, but the sides are vinyl siding. Nasty looking.
I’ve seen people tear down houses that fit well on the lot, and then replace them with a gigantic version of a crappy $100,000 house.
Zero architectural consideration, massive blank side walls going back 40+ feet, roof pitches that are nearly flat, just hideous stuff.
Oh, and they go for $1-2 million…
Most architects today have no clue about classic design, and the customers apparently don’t know any better either.
From the update:
A million-dollar house is not a big deal anymore,’ said (realtor) Tim Rodgers. ‘It will be a nice house, but it’s not ‘Wow.’”
“But sometimes, real estate agents say, the million-dollar prices are applied by sellers whose houses are really worth $850,000 or $900,000 but who can’t resist tacking on an extra digit, just because they think they can.”
“Often, they can because buyers are as willing to get into the $1 million range as sellers are. They have mountains of equity in their current homes, and the proliferation of interest-only and other exotic loans makes a stretch into seven figures seem attainable for many more people than was the case a few years ago.”
“‘If they have to pay $500,000 for a lot, they’re going to want to build a house three times that,’ said (broker) Pat Hiban.”
“Often, they can because buyers are as willing to get into the $1 million range as sellers are. They have mountains of equity in their current homes, and the proliferation of interest-only and other exotic loans makes a stretch into seven figures seem attainable for many more people than was the case a few years ago.”
Hey everyone, I’m in hoc to 7-figures…a badge of societal attainment!
A million-dollar house is not a big deal anymore,’ said (realtor) Tim Rodgers. ‘It will be a nice house, but it’s not ‘Wow.’”
“But sometimes, real estate agents say, the million-dollar prices are applied by sellers whose houses are really worth $850,000 or $900,000 but who can’t resist tacking on an extra digit, just because they think they can.”
I’ll ditto that and add this: Most of the so-called million dollars homes are a crock. The ones that are near where I work in Dublin, CA were all built in 2000 and sold the in the mid $500s (maybe less), but now have values on them of $979 - $1.06M (taxes in the $7k range). None of them seem to have been assessed above $688K). The back yards are about as big as a matchbox. And get this…the Santa Rita jail is just up the street (a few blocks). I know for a fact, though, that when the incarcerated are released, you will find them on foot on their way to catch a local bus or get on the public train system (BART). Yeah…that’s where *I’d* like to spend *MY* million dollars.
And regarding what that RE agent said about the million dollar homes being really worth $850 or $900….I think not. He’s being way too generous.
BayQT~
my gas bill was $ 350 in a small house- what are these folks paying ?
why stop mcmansions- they bulk up the tax base
The day will come where you’ll be able to pick one up for cheap - if you can afford the utility bills and gas prices to and from work. I’ll stick with my 1400sf house, thanks.
About 35 years ago, a new private school was started near where I live. They were given a large estate on the water. Over the years they accumulated several such estates, several of which were donated to them. Each had large houses that required considerable maintenance. The taxes were high. The insurance was high. And guess what… no one wanted to buy them. During the bubble, such properties were worth millions but they weren’t in the 70’s. Some to the mcmansions will be unsalable at some point before long for the same reasons.
We’re fine with our 963 Sq. Ft. Craftsman - No kids. Can’t believe how much some people spend on utilities around the country. Glad to be in SoCal in what some consider a tiny home. Works for us! Considering solar, even so. Downsizing for all!
I think the trend will be toward simplifying, at least with with generation ‘y’ (or whatever they are called
). There is already a trend away from gargantuan SUVs to small, funky, fuel-efficient cars like Scion xB with the 20-somethings and they grew up recycling, learning about the environment etc.
I’m an “X-er” and we grew up learning about recycling and the environment.
I wish they had taught more about economics.
It is energy prices that will kill the sprawl and “big-ness”.
This is a truly nauseating trend which I would like to see go down in flames, complete with foreclosures, 50 illegals in one house and a complete eschewment of this kind of conspicuous consumption. Of course someone will have to remove the axe from the back of my head before I can see this because I’ll be dead before it happens.
I don’t know… the great depression seemed to make an impression on more than a few. My grandparents took it to heart. I don’t think any of them have ever wasted a thing- and I know certainly if they break out their credit card for anything more than once a year it is a majorly big deal. Even then whatever went on it will be paid in full by the time the bill comes.
I remember growing up and my grandfather had us always serve our own plates, nobody served us- and we were expected to eat every bite of whatever we put on our plate.
I think that was his metaphor for how to live life as well- plain and simple don’t bite off more than you can chew.
My parents (boomers) were the ones who rebelled away from those lessons and have lived a mortgaged life spending every penny ever made. I did not take my lessons from them, but my grandparents instead. Seems to me they had a better life because if there WAS something they wanted they could most certainly buy it. They just seemed to want very little- the gene for keeping up with the joneses I am pretty sure got extracted by force when they lived through the depression.
Can’t say I would be sorry to see those kind of values envogue once more. I have very few grandparents left (just two) and the world could do well with a few more people like them.
ps…I think the bust coming down the pike will change more than a few sets of values.
Good commentary…
Athena, I had an experience very similar to yours. My grandparents lived through the Depression on a farm in the midwest, and to this day, my grandma buys cheap towels and uses sheets that my mom slept on in high school. My grandparents amassed a large amount of farmland, but they worked very hard every day and never took a vacation. Frugal doesn’t even begin to describe them. My grandma would be disgusted if she knew how much my handbag cost.
My parents on the other hand, are approaching retirement, and maybe have $5,000 in a 401k for retirement and very little equity in their homes. And these are the people who are supposed to be moving to Florida in droves–yeah right. They have credit card bills coming out their ears. I learned how to budget myself and live within my means by not following the examples set by my boomer parents (occasional splurge notwithstanding) and I always pay with cash.
I am renting right now and paying off my student loans with the money that I would be paying to service the debt on a similar place (or lease a C-class)–and it’s still tax-deductible! I can’t wait for it all to come crashing down.
My grandparents were from Texas and Oklahoma and had the dustbowls to contend with as well. They were most definitely frugal- but you know they weren’t cheap… I think it is all in the midset. Even now, my grandfather will indulge me, but still needs very little for himself. But if he thinks I want something or if I look too long at something he will get right out there and buy it. I have to make sure he doesn’t catch me looking at anything so he doesn’t go indulging me too much. I tease him about it… that he will do without something he might like to have, but he will splurge on something totally unnecessary for me. We play dominoes with him and my great aunts every now and again… and I tell people that he makes me work for every quarter I take off him in the game… but he would hand me $10k if I asked for it. LOL… Still he made a good life for himself, had a decent house, raised kids, had a nice beach cabin we all grew up going to on holidays and in the summers- he had 1 mortgage in his life and for all other items he paid cash… both sets of grandparents and bot sets of great grandparents did the same thing. It can be done and a good life can be had… but conspicuous consumption has changed society. It has grown because no generation since my grandparent’s generation has lived through anything like the depression.
On the one hand- I hope nobody ever has to considering the stories I was told… but on the other hand, what else will change the current midset of debt till you drop? Not that I want to be the one teaching society a lesson… but for how long can conspicuous consumption grow without turning and eating itself?
Americans will have to suffer some really serious pain before they give up their “bigger is better” notions.
Look at the price of gas. When it peaks above $3.00 a few more small cars get sold. But the moment it drops just a little Joe Sixpack and Jane Soccermom are back to buying their Suburbans and Tahoes.
Globalization means that the livestyle of middle-class people will start to equalize. In 50 years middle-class Americans will not live any better than middle-class Chinese or Argentinians.
This housing bubble is a last gasp attempt to pretend that we Americans are special, we can all be rich. Once it plays out I doubt we’ll ever see the like again.
It’s occurred to me that Hummers and SUVs have become society’s enemy but McMansions are still ok. No one’s talked about reigning in heating costs the same way gasoline is an issue.
Well, that didn’t work right.
Like this one?
Sorry about the technical glitch.
Remember the Canyonero on The Simpsons? A symbol of the lack of frugality of Americans, if ever there was any. I guess “we” didn’t get it when this aired.
The song was sung by Hank Williams Jr.
http://www.clayloomis.com/simpsongs1/simsg297m.wav
Lyrics:
Canyonero
22nd February 1998
Can you name the truck with four wheel drive,
Smells like a steak, and seats thirty five?
Canyonero! Canyonero!
Well, it goes real slow with the hammer down
It’s the country-fried truck endorsed by a clown
Canyonero! Canyonero!
Hey, hey!
Twelve yards long, two lanes wide,
Sixty five tons of American pride!
Canyonero! Canyonero!
Top of the line in utility sports,
Unexplained fires are a matter for the courts!
Canyonero! Canyonero!
She blinds everybody with her super high beams
She’s a squirrel-squashin’, deer-smackin’ drivin’ machine
Canyonero! Canyonero! Canyonero!
Whoa, Canyonero! Whoa!
I confess, I live in a McMansion. I love it. If I had to buy it today, I couldn’t afford it. It has gone way up since I bought it 3 years ago.
They are not building very many McMansions in Las Vegas any more. A few, but they are very expensive ($750,000++) and in exclusive areas like Southern Highlands. Mostly the builders are building small footprint houses on infill lots now. The last two new communities I visited had nothing over 2000 sq ft. They were building 3 story homes squished together with tiny yards and no sidewalks. Here’s a link:
http://www.richmondamerican.com/Shop+and+Buy/View+Community.htm?mr=Las%20Vegas&cm=1085&Type=Community&id=1085
I find it amazing because a few years ago you could never find a 3 story house in Las Vegas.
BTW, the pictures are misleading. There is no greenery behind or to the sides of these houses. Just more houses. When you look out your window, all you see is the wall of another house.
Wow - I’ve never even heard of a two car ‘tandem’ garage before. What will they think of next?
San Francisco’s had them for years. But I guess it does look odd for those who haven’t seen anything like it.
BayQT~
Here’s the deal on the 3 story homes that I have discovered. They have been building townhouses of that style here in Dublin, CA. When I did a walk-through a couple of years ago, the first thing I noticed is the small size of the rooms…you don’t get much. And don’t even think about having a King or Queen sized bed with nightstands PLUS a dresser in the master bedroom…they won’t fit. The same goes for the living rooms, dens, etc…all smallish. Building UP doesn’t necessarily give you any extra actual *living* space. A lot of it is taken up by the stairways (this tip from a builder friend who joined me on that tour).
If connected, these designs kind of remind me of rowhouses.
BayQT~
They’ve been building the 3 level TH for at least a couple of years here in Irvine. Yup– 1000 to 1600sq spread on 3 levels. Front porch the size of a beach towel (literally). No back yard. Can be yours starting at a low $550k. Assoc/taxes not included. These are on the old Tustin Marine Corp property.
And you qualify as ‘moderate’ income if you’re under about $92k year (for 4).
Been there, seen that. As 50-someting boomers, we don’t want the stairs. Who will buy them? At $550k for a 3-story condo/townhome, with $400 Association fees, where is the demand? I know there are a lot of good-paying jobs in Irvine, but does it really matter that the laundry room is on the same third level as the bedrooms? Can you say “postage stamp lot?”
I just got back from taking some pictures in Cornville. The sun was too high, so I’ll have to redo them, but what I saw is related to this topic. In the Brookfield Homes Verde Santa Fe/Amante subdivisions, even I was shocked. They are literally 80% vacant, with dozens of new homes being constructed.
All brand new ‘garage-mahals’ with that Arizonan style of having the garage be the most prominent feature. There are obviously many flippers, as for-sale signs are everywhere. This isn’t anywhere near forest land, so there are miles of desert surrounding the place. I went to the Brookfield website to see what these things sell for; strangely, they don’t even acknowledge operating in Arizona. The few FSBO ads in the paper didn’t have a price either.
Ben. This is from Brokkfiled Asset Management which owns Brookfield Homes:
Ben:
They listed their areas - which did not include Arizona - and further on added :
“We also build homes for sale and develop commercial lands and income properties for investment and sale.”
Thit Cdn stock keeps on making new highs up despite their announcing a huge drop in US construction. Canadians are totally oblivious to what is going on.
We can convert McMansions into multi family homes,like the triple deckers here in the Bashtin Arearer.Can’t wait till $3 and $4 dollar heating oil prices.That will kill the big home syndrome.
You know rather than go into foreclosure , maybe some of these people that are upside down should think about renting out rooms . Renting rooms are better than destroying ones credit ,and loosing a home .
Actually I saw this in the classifieds this week. An ad for a room to rent for $600/mo. It was in a brand new 3/2 home that probably cost between $850-900k. Now who buys a house that expensive and takes in a boarder?
people with poor planning skills
I think you will see alot of room renting in the near future .Alot of students could benefit from such a arrangement . It also could be good for singles trying to save money for a house or condo . Also if a person is gone alot , room renting might be the best way to go .
I had a friend that did that in a “real” mansion near Boston College…not college students but single professionals. When you get that many people sharing responsibilities, no one’s responsible. Plus there are security issues when so many people and their friends are coming and going. I think there were 7 in that house. My friend didn’t stay there too long.
People who want to say that they have a million dollar home, but really can’t afford one.
BayQ~
If you have to ask…you’re not paying attention.
Now who buys a house that expensive and takes in a boarder?
Believe it or not, I know somebody that planned it out that way. He has 2 boarders (both very nice), but it was the only way to make sense of the mortgage payment. Given that housing in CA only goes up (ahem), I was told about what a smart idea it was.
I have to say, it’s quite a symbiotic arrangement. It may well end up that boarder houses are the endgame of the McMansions.
If you look in the classifieds for the Orlando Sentinel you are starting to see people take in boarders into their homes.
The Four Corners area of Polk County is swamped with inventory right now and many overextended families are renting out rooms to people.
It’s crazy.
Who would want a boarder living in their home with their wife and teenaged kids ???
I think the McMansion will go the way of the gigantic Victorian White Elephant of the pre-WW1 days. Big houses that took an army of servants to maintain. Changing times did away with cheap help, the houses were broken up into apartments, hotels, etc. The only difference between then and now was that most of those big big houses were in urban centers where a transformation was practical. These joints stuck out in the desert or the wilds of the suburbs in gated communities won’t be so easy to change. Hey, I’ve got it..they’re already gated communities…prisons maybe?
LOL… welcome to Montini Debtors Prison!
Or… for those who really racked up the debt… Belle Terreno for you! How do you think bars will look on those windows?
‘garage mahals,’ ‘Hummer houses’ or ’starter castles.’”
Funny…..
I have to say, I also live in a very large home 3800 sq.ft.
Built it 25 years ago to give us lots of room to raise 3 children….Just me & mom now…Way more than what we need but our property taxes and location make us stay….
I will say that when I built it, I was very sensitive to the impact to my ranch style neiborhood and I feel like I blended it in well…You would never know how big the house is by driveing up to it.
Nothing wrong with a big home. I grew up in big homes, the largest 5000 sq/ft. However, these had large plots of land and were architecturally tasteful (e.g. an old Georgian built around 1900).
However, when you plop one of those houses on a plot of land so small that the residual land is smaller than the footprint of the house, then you’ve got a problem. Throw in architecture as tasteful as a Las Vegas lounge singer, and you’ve got yourself a McMansion.
when you can hand your neighbor a roll of toilet paper from your balcony to their bathroom window and neither one of you need to stretch… you might be too close.
And regarding what that RE agent said about the million dollar homes being really worth $850 or $900….I think not. He’s being way too generous.
======================================================
Many do agree with your comments…
My parents have a house that is about 4400 sq ft, sitting on 7 acres. It doesn’t look out of place. It is also a one-of-a-kind, built by earlier industrialists. One of my brothers has a home with 2000 sq ft, on 1.5 acreas. He is now surrounded by homes on same size lots, whcih are at least twice the size of his home. The new homes around my brother are going for 3x the value of his. AND, they look cheesy. I guess if it gets really bad, they’ll end up like the old McMansions of Pittsburgh - apts. Besides heating taxes etc, how will people keep those things clean? ALSO, what happens when the kids leave? Even if new families move in, families over time get smaller, at least over the last 1-200 years they have.
Besides heating taxes etc, how will people keep those things clean? ALSO, what happens when the kids leave?
scdave (above post) could probably help answer those questions. He’s living this scenario right now.
BayQT~
Besides heating taxes etc, how will people keep those things clean? ALSO, what happens when the kids leave?
Taxes are very low…1/4 of what a new buyer would pay (Thank you Prop.13)…Heating & cooling is a non-issiue due to mild climate swings and a extreamly well planned & insulated home…I don’t even have Air Conditioning…As for the kids being gone,like I said before, its more house than what we realisticly need ….Lastly, “Cleaning”…that may be the biggest issiue for us…Just last year I farmed out the landscape maitainence for the first time…Mom cleans the house and spends at least a part of every day doing that…Cleaning will likely be farmed out next…
Most people with larger homes hire help. As for small families, we have a family w/ 9 kids that live the next street over…all their own. They bought while another home was being built because there is no place to rent when your family is that big. We have quite a few friends w/ 4 kids, and there seems to be quite a local trend of “adopting” large number of children if you are well to do. Several families from a local church have 10 children apiece. You might have caught the 1st family to do that on the Today show about a year ago.
Sorry, I meant to say owners of large homes hire cleaning help.
teddy cruz (you can google him if interested) is an interesting, award winning (but outside-the-mainstream) architect working out of san diego who has some intriguing ideas for turning mcmansions into higher density housing.
My only concern for this anti-McMansion backlash is that what’s the alternative? Condos? F*ck that.
While I’d love to buy a small 2 or 3 bedroom house, I would have to have a decent sized yard around it to space myself from the neighbors. And when was that last time you’ve seen something like that? I haven’t in California for a long time.
At least with a McMansion, you have some privacy indoors without going stir-crazy, even with the neighbor’s house being 20 feet away.
Check out Niguel Hills in Laguna Niguel. 1400-1800sf. homes, big lots, single story
I live in an older ’50’s neighborhood with a mix of ranch and two-stories. There’s a McMansion down the street that was built on two lots after a fire destroyed the houses. It was built by a developer who picked up and moved to Costra Rica a few years ago. The house is now occupied by at least a dozen mexican immigrants who I’ve seen working on construction jobs. I’m not really sure who owns it but they park up on the lawn and they have cars and trucks up on blocks, in various stages of repair. I suspect this might be the future for many of these houses.
Im listening to Bob Brinker show today (Sunday!)
The host today, Terry Savage, recommended to caller from Sactromento. Dont buy today, wait a while and find a home from a defualted I/O Holder going belly up. WOW!
What radio station is that? I’m in the Tri-Valley area so I may be able to tune in.
BayQT~
He’s on KGO in SF and on a Sacramento station for sure, here’s his full list of stations.
Thanks!
Bob Brinker use to give objective advice. Now he’s telling people things like M3 is no biggie (the Fed stopped publishing it March 2006 to cover up the massive monetary infusion of $, ie. inflation). He’s very WSJ, not Jim Puplava, who is a thinking man’s guru. Brinker did get us out of the hi-tech bubble with a pile of cash, but I’ve been disappointed in his advice for years now. I like Peter Schiff (Euro Pacific Capital). His take on our Macro Economic cliff and the housing bubble reflects Puplava’s reasoning. Use the internet, you’ll get smarter advice than Brinker, IMHO.
One day Brinker was defending employeers slashing benefits and pensions. You know, they work for the shareholders. It was just so arrogant of him. Who said employers owe anyone anything was his take. Terry Savage is just another run of the mill adviser. I’ve checked out her book.
So Cal Broker…I like Peter Schiff (Euro Pacific Capital).
Sage advise….He is a sharp tack….I also like Jim Rogers…
SCDave-
email me at mallgal@verizon.net- I’ll give you a host of great websites. While the Titanic sinks, I plan to have a lifeboat!
I posted this before but it didn’t come out, trying again
———
I found this little golden nugget on craigslist today, nice looking bungalow in pasadena. Ripe for a lowball?
“My home has been on the market for almost 8 months. The price has come down from the original listing price of 739,000 to where it sits listed on the MLS at 569,000.
Come take a look. You’ll not find a better 2 bedroom, 1 and 1/2 bath at this price, as it was completely renovated 3 years ago before I moved in. I will take 560,000 but that’s the bottom line.
”
http://losangeles.craigslist.org/rfs/147881786.html
If I remember correctly, that’s about what he bought it for. He’s additionally on the hook for the 6% selling commission, so that’s like $30K.
Few people needing to sell their homes would have more than that kind of money saved up these days. It might actually be impossible for him to sell for less. Whatever your lowball difference is, that’s the amount he’d have to scrounge from family &c.
Yah go ahead and try it, what the heck…remember that he’ll be more desperate just a couple more weeks from now at the end of “Silent Spring”.
Nah, I’m not going to be bidding on anythin for another couple of years. I just love seeing listings like that, can’t get a much better feel for the market.
According to zillow, similar houses in that neighbourhood are valued at 490-600k, one year ago it was about the same, 2 years ago it was 300-400k, 3 years ago it was around 200-250k.
“At least with a McMansion, you have some privacy indoors without going stir-crazy, even with the neighbor’s house being 20 feet away.”
The problem is not McM perse. Its the pricing on McM IMHO. You can have these McM in not so good ‘hoods going for $1M. Just does not make fundemental sense. The prices going up 300 % in 6-7 years.
KGO 810 AM Sat&Sun 1-4
Great program
Cool! Thanks!
I just turned it on.
BayQT~
I just caught the tail-end of her recommendation to the caller on that show, but I thought it was odd that she said something like ” refinance in a year or 2 when the rates go down”. Do you think she really believes that rates will go down in another year or two? Interesting statement….
BayQT~
Ah, grasshopper — “down”…from where?
You know when people buy smaller houses they are always bitching that its not enough room . I think if you have alot of kids running around it would be nice to have some room. I was reading a article lately that stated that the baby boomers are going for bigger retirement homes rather than smaller ones .BB’s want big condo’s also .So I don’t know what is going to happen but it seem like the builders offer very few smaller sq. footage model homes in their inventory these days .
Can anyone say what the trend is in Europe as far as size of home goes , ………what’s popular ?
This is not first-hand information but one of the things that my daughter noticed when she spent 6 weeks in Italy last summer (Florence, Rome, Siena….) was that people lived mostly in “flats” or apartments. It didn’t seem to her that people were all that concerned about having to “own” a home. And that observation was from a (then) 20 year college student.
BayQT~
I was in Florence summer before last visiting a friend. One of the interesting things I learned was that for the most part, they do not get mortgages when they buy a flat - they pay cash.
Most single people live at home until they are in their 30’s saving money.
Houses in Britain have shrunk over time. The housing market and stock is very different in each country. To get decent space at a reasonable price, Australia and the US are much better than Britain.
Middle-class houses in Britain have shrunk over time. There used to be a big difference between middle class and working class accomodation, which has recently blurred a bit.
If you go to the old industrial areas and look at the ‘2-up 2-down’ terraces (= rowhomes), you can see what free market Victorian Britain considered suitable for working-class families (at a time when average families were a lot bigger than today).
The price of lots has generally gone up at a faster rate than the combined cost of labor and construction materials. I was once told that typically a completed property - the structur and the land sells for about three times the cost of the land. So if indeed lot prices are increasing disproportionately, faster, either the 3:1 ratio changes or bigger/fancier houses get built. I guess this could help explain McMansionization.
Therefore, receding lot prices - within the context of overall inflation in other areas might mean smaller homes.
Watch for those creaky kneed aging boomers not able to climb their McMansion stairs, illegally convert the upstairs to rental apartments.
“Watch for those creaky kneed aging boomers not able to climb their McMansion stairs”
True of h’s parents w/double hip replacements but my 90 year old gram is going strong in her 60 year old home and you should see those nasty steep stairs. I think they keep her young!
Pittsburgh lost 1/2 its pop since 1950. Many of the old homes of the rich from 100 years ago still stand, though now they are apts. Some of the hoods which used to be lovely, “suburbs” of the Gilded Age are crappy neighborhoods now. I guess the same can happen to McMansions. Suburbs just move further out. Nice, blue-collar suburbs of Pittsburgh, which were safe when I was a kid, are now full of transients & druggies. Of course, then there’s the problem of gangs, which are now moving outward from the ghettos (esp in other areas of the country).
http://www.libertypost.org/cgi-bin/readart.cgi?ArtNum=135708 100 People in a 300 Sq Ft House I guess you could put 1500 in a 4500 Sq Ft House…
An excellent analysis of our current economic situation and how close we are to the edge (funny, too):
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=53283
Good one, thanks!
In the old days, people would take in boarders…
Many limits on growth start out as well-intentioned but end up falling subject to the Law of Unintended Consequences.
While speculation, loose lending practices, greed and loose monetary policy are undoubtedly the largest contributors to the bubble we are now in, restrictive zoning and growth controls are contributing factors.
Many towns have goals such as preserving the nature of their community or preventing too much growth from happening too fast. Admirable sounding and sensible sounding goals, I’ll agree. However, the consequences often mean that supply is restricted, driving out lower-income residents and making it increasingly difficult for them to find homes. This often leads to longer commutes from different neighborhoods and communities.
In short, this results in a servant class riding the bus in from the ghetto to the upscale neighborhoods.
On the other hand, leaving it completely unregulated can lead to bad consequences as well.
In short, this results in a servant class riding the bus in from the ghetto to the upscale neighborhoods.
What leads you to believe that this consequence is unintended?
Two all beefy patios, special cost, borrowed lettuce, cheesy people in a pickle, with bunions on a seasame seed bun.
BWhahahahaha……..
Now I have a coffee flavored Logitech keyboard
A coffee flavored keyboard isn’t as bad as an Egg McMansion, as in egg on one’s face, splattered by the bursting bubble.
BayQT~ couple times the host stated — rates will go up.
It is unlikely rates will fall.
Ok…that sounds much more like reality to me. But for some reason she did say to a guy to refinance in a couple of years when the rates are down. Hmmmm…
BayQT~
BayQT~ By the way, if you have the time its worth listening on weekend.. if your unable… You can record on your PC and catch it during commute. There is lots of info to absorb. callers questions and top guests. Infact he had Prof Shiller on the bubble as guest a month back..
I use Radio Shark to record and play on my MP3 Player during commute. http://www.griffintechnology.com/products/radioshark/
Yes..I *will* tune in. Already bookmarked her web site so I’ll see what else she has to say. But in the 30 minutes that I listened, I learned quite a bit. I’m glad you mentioned this radio show. I’m always looking for good financial tips. Thanks again!
BayQT~
Proposed anthem about all the spendthrift Baby Boomers who will be forced to unload their McMansions at big price reductions — sung to the tune of the famous McDonald’s jingle”
“You deserve a break today at McMansions - they blew it all for you”.
test1
With all the talk about the large homebuilders, is it still possible to hire an independent contractor to build a custom house?
Yes, it is. That’s what my father does. It does tend to cost more, though. My parents live in rural Virginia where there are no large homebuilders anywhere nearby, so there is no other choice.
When is enough room REALLY enough room? Did you ever look at WHY you think you need 5000sq FT? Are you willing to entertain the possibility that you’re out to impress others? Can you define the word pretentious or ostentatious? Did you ever consider the operating costs of the gargantuan monstrosity that now drains your checking account? What is the purpose of the 2 leased Chevy SLOBurbans in the garage?
The Sport Utilitarians deserve and demand only “The Best” for themselves. And having the best, whether it be their vehicle, their home, their second home, their sub-Zero refrigerator, their Viking stove, etc., is simply their way of saying F_ck You.
Beneath it all is typically a lack of self esteem. It makes them feel better to make you feel bad.
That $80,000 Hummer is not purchased for that moment they might skid off the road in the snow. Rather, it’s purchased for that moment they pull up next to you or me at a light with a vehicle so unusual and expensive we must take note and pay homage if only with a subservient moment of eye contact.
If a car like the Honda Accord conveys an image of “smart”, and a Honda Odyssey conveys an image of “practical”, the Hummer conveys an image of “I’m a jerk”.
Wow. You nailed that one Portland. Hence the reason I pay no attention to the Hummer/McMansion crowd. They do it for the attention. When they finally discover that nobody is paying homage, they’ll realize how truely stupid they are.
A lot of people who buy Sub-Zero fridges end up regretting it. They’re unreliable and cost a fortune to maintain.
Inventory alone doesn’t signal a collapse. But given all the other unfavorable forces at play in today’s environment, it’s adefinite marker to watch carefully. The markets with the explanding inventory are in trouble. The small markets with the shrinking inventory are likely being kept aloft by equity nomads fleeing the big bubble markets.
Then there are some markets where the bubble never got out of control. Here expanding inventory may simply mean a normal spring, with buyers who will trim the inventory down over the next 90 days.
I think the McMansion backlash is overblown. sure, they’re ugly . But what someone else chooses to build on his own property is really none of my business. Zoning is part of the problem that got us into this crazy real estate market in the first place, remember?
BTW, McMansions aren’t any uglier than most of the teardown crapboxes they tend to replace. Many of those “quaint cottages” are really 1970s disasters in their own right.
The reality is that there is very little decent architecture in the U.S to begin with. McMansions hardly lower the bar at all.
Amen!
Hardly overblown. And none of my business? When you begin to see how rampant consumerism is impacting prices that you and I pay, I think you’ll see very quickly how it is your business.
“The reality is that there is very little decent architecture in the U.S to begin with.”
I don’t know about that. You see some amazing before and afters in the magazines. One acquaintance that drove by our home after a year said she almost drove off the road it looked so nice. (It was unloved when we bought it) Really we repainted it w updated colors, changed the window trim from narrow to wide, and put on a new roof, cost to us cuz we did it ourselves: $3000. Today’s buyer has no vision hence they deserve the crap they live in or the expense of buying new.
McMansions are beautiful interiors and beehive living on the exterior. Even with 25 ft between our home, and our neighbors, you could see into the windows, hardly could open your shutters, and you could never enjoy your yards. You’re surrounded by 2-story homes, looking down on your pool and Bar-B-Q. I couldn’t enjoy my view of the city below, because our master suite deck had no privacy, and our HOA would not let us put up visual blockers. $1M McMansion and I hated the lifestyle.
Next time, its a 1-story, decent sized, not super sized comfy home for us. No more HOA’s (Nazis) dictating my white enamel, and my window treatments. Anyone who loves totalitarianism would like PUD (Planned Urban Development) living. Most of my neighbors were brats, who were parents of brats. No thanks.
We have 3,800 sq ft on 2 acres so I don’t think of our house as a McMansion, but I guess its close and its in a homeowners association (HOA). I fully agree on the HOA and our next move will be further out on about 10 acres of land. Even with two acres the other houses are way to close for comfort. You have a BBQ and the kids make some noise after it gets dark on a summer night and the next thing you know the police are in your driveway telling you your neighbors complained. The cowardly pieces of crap wouldn’t dream of just calling you up, or better still, just accepting a little occasional noise. No they have to call the cops.
Our entire neighborhood is sterile. There are 15 families with kids on our street and nine out of 10 summer days there’s not a kid playing on the street. They are either at their lake houses or on their computers trying to get as obese as their parents.
Our kids can’t stand any of the kids on our street as they are all snotty. Our kids’ friends are all in smaller homes in the center of town where the kids can walk to each others’ houses and all the parents look out for each other’s kids, rather than calling the cops on them.
PIGS!
Portland Mainer-
Sorry to hear you have such PIGS for neighbors. School is your “job” as a kid, summers are your childhood. Apparently they need a Del Web Senior Living Community home. I’m happy to hear your values are solid. As I always say, a-holes can have $ or not, its their character that shows either way. Your kids are lucky, your their parent (and your sidekick, too)
We looked at a 1+Million McMansion up the hill from us in North Orange County, CA. After seeing the living room, we figured that we could take our house, flip it vertcally, and easily fit it into the family, living, and sprawling dining room area. I’d love to heat and cool that impressive, empty area.
The first time I read the term “McMansion” was about 8 years ago, in the WSJ in an article by June Fisher. I believe she coined the term. I like to give the origin for orginality credit. She’s a pretty neat lady, and author of a book about housing too.
The OED (online edition) lists a 1990 San Diego Union-Tribune article as the first in-print reference.
The wife and I currently live in a sub-500 sq. ft apartment, which is kinda cramped, but it makes us a little unsympathetic to people who think they “need” such big houses. We watch those stupid HGTV shows, and see folks looking at some monstrosity, and saying, gee I don’t know if it’s enough space. Mainly these folks seem to “need” huge houses so they can continue accumulating a mind-numbing mountain of worthless crap. Ugly, worthless crap.