Is the McMansion Dead?

Over the past few weeks, there have been several headlines declaring the death of the McMansion.  Depending on how you define the “McMansion”, there may be some merit to the argument, but other aspects of the American desire to have things that are “big” are alive and well.  I mean, didn’t we declare the death of SUVs when oil prices hit $140/barrel only to see sales come roaring back when oil then dropped 70% the following year?

What is a McMansion?

To some, a McMansion is just a large home.  Anything exceeding 2500 square feet or so probably qualifies to them.  To others, there are some more discerning criteria.  When a developer comes in a clears a 5 acre lot and plops as many 3000 square foot homes as possible into the development leaving little room for anything other than a driveway, that’s another story.  In these cases, the lots are often .2 acre or less, there’s no yard and no trees as far as the eye can see.  Then, to others, even estate-type developments with 2+ acre lots qualify.  I guess it depends on your perspective.  You probably consider other peoples’ homes to be a McMansion, but not yours.

Is the McMansion Dead?

It probably depends on your personal perspective on what a McMansion is.  Let’s focus on the key criteria then, to answer this question.  Size.  According to CNN, the median new home size fell to 2,135 square feet in 2009 after peaking at over 2,300 earlier in the decade.  So, to me, (and I’m glad they used median instead of mean ), it does sound as though people are settling for smaller new homes.  But is this really because that’s what they want?  Many articles go on to say that people’s attitudes have somehow changed, as if they’re now repulsed by large homes.  I don’t think this is the case at all – it’s the economy stupid!

The economy is so uncertain right now, that

• a) people aren’t able to use their existing home as a piggybank to pull out unlimited equity,
• b) people don’t have a lot of liquid cash since they’re paying down debt and other obligations and
• c) they are afraid to take on a larger monthly cost in the form of mortgage and taxes than they may have been 3 years ago.

Therefore, let’s say (totally unrealistic but bear with me) that the economy miraculously recovers over the next year, business is booming, and incomes are up.  People are feeling better about their current and future financial outlook.  Under these circumstances, I would fully expect to see the median home size start to increase again.
Americans like big things.  We had to have big SUVs with the seat very high off the ground.  Big, flashy engagement rings, designer clothes and bags, anything to show your neighbor and friends and family how well-off you are.  This is the American way.  Personally, I view this phenomena as solely an economy issue and not a change in attitudes toward larger homes.  Whenever the economy does actually recover, come back and let me know if I was right.

What do you think?

Are Americans really content in smaller homes?  Or scared of the economy?