Shrinky-size it?

Two recent articles cast a little doubt on the future of the McMansion.

There's "Size of New Homes Starts Shrinking" (Marketwatch, Sep 12, 07)

The gist of the story is this: as the lending market tightens up, prospective buyers' abilities to get the loans that go toward the big houses is shrinking. Since nobody can afford the big houses, builders have to produce smaller houses that people can actually afford.

The one that really got my attention: "McMansions Turn 'McApartments,' Stirring Ire" (WaPo, Sep 4, 07), which covers the conflation of two issues: knocking down old houses that fit into a neighborhood's overall architectural feel to build big new places, and then using those places as boardinghouses for several people.

Comments

[Shotrock]

K Hovnanian, or as I like to call them, A Scourge Upon the Jersey Earth, went in big for building houses and condos on any cornfield in the state that wasn't nailed down. Not all of them were McMansions, but Christ, what they damn well were was everywhere. This is from Thursday's Star-Ledger:

Just a few years ago, Hovnanian Enterprises held lotteries to sell new homes because demand for housing was white-picket-fence hot.

Now, with the residential real estate slump deepening by the month, the largest New Jersey-based homebuilder is holding a fire sale at developments across the country. Prices this weekend will be slashed by up to six figures -- $100,000, $149,000, in some cases $240,000.

It's a sign of just how far the housing market has fallen from the boom years -- and just how desperate homebuilders such as Hovnanian are to move inventory. Other developers have offered rich incentives, from cars to vacations, to entice buyers during the market's downturn. But housing industry experts say the discounts being offered by Hovnanian are unprecedented.

Hovnanian is holding what amounts to a weekend red tag sale because the real estate market continues to slump in New Jersey and around the nation. New home sales in the Northeast plunged 24 percent in July, according to the Commerce Department. In New Jersey, the inventory of unsold homes in June soared to a record 72,000, compared with just 39,000 during the same period two years ago.

Hovnanian's fortunes reflect that downturn. The company lost more than $80 million in the quarter ending in July, compared with turning a profit a year earlier, and sales tanked by 27 percent. The company's stock has plunged to about $10 a share, down from $60 early last year.

Couldn't happen to a nicer bunch of people. And regarding the boarding house issue: that's the thing I kept thinking about - you can always tear down a small house and build a big one, but what happens to the big one when no one wants it? I wonder if we'll see a lot of contractors advertising tear-downs of those behemoths once they figure out how to clean-fill the ginormous footprints they'll leave behind.

[Austin Remodeling - Live Oak Remodeling]

No doubt, we remodel smaller older homes in Austin and we rarely add more aquare footage but we make them seem larger with better use of space. Many of the McMansion I've seen use space poorly at best.