McMansion makes a comeback
By Judy Martel Bankrate.com Friday, June 14, 2013 Posted: 4 pm ET (Read on Bankrate)
In the years leading up to the housing boom, the median size of the American home had been steadily increasing. Then came the crash in 2009, and the median square footage of newly built homes reverted to near-2003 levels, according to a Census Bureau report. Many industry experts predicted that smaller homes would remain a solid trend. Instead, the popular McMansion appears to be making a comeback.
In 2009, median home size dropped to 2,135 square feet, close to the 2003 median of 2,137 square feet. In 2010, according to the report, size began increasing again, and in 2012, square footage of the median home reached a record high of 2,306 square feet.
Rick Sharga, executive vice president of Carrington Mortgage Holdings in Santa Ana, Calif., says he sees a couple of reasons for the increasingly larger American home. When the housing market went from boom to bust, builders were stuck with tracts of undeveloped land, and the only way to compete in the depressed market was to build smaller homes and price them competitively, he says. Now that the market is recovering, builders are reverting to constructing larger homes again. "Once you own the land, it doesn't cost much more to build a bigger home, and you can charge more, so bigger will always be better for builders," he says.
Another reason, Sharga says, is that when homeowners want to move up to a nicer home, they almost always buy a larger one. He says that there are more of this kind of homebuyer in the market now than first-time homebuyers, who traditionally start out with smaller properties, he says.
So how big is big enough? Although there will always be homeowners who view size as a symbol of success, Sharga is not convinced that everyone views the American dream with a "bigger is better" mindset. "I think we might be on the cusp of a countercyclical trend," he says, "as baby boomers start retiring and downsizing."
