The golden age of McMansions may be coming to an end.
These oversized homes--characterized by sprawling layouts on small lots, and built in cookie-cutter style by big developers--fueled much of the housing boom. But thanks to rising energy and mortgage costs, shrinking families and a growing number of retirement-age Baby Boomers set on downsizing, there are signs of an emerging glut.
The short answer is any home bigger and showier than your own. More specifically it is a house larger than 5,000 square feet--about double the national average--with four or more bedrooms that is built along side similar houses. Most have been erected since the mid-1980s.
Now, boomers in their late 50s are counting on selling their huge houses to help fund retirement. Yet, a number of factors are weighing down demand. With the rise in home heating and cooling costs, McMansions are increasingly expensive to maintain. The overall slump in the housing market also is crimping big-home sales. Meanwhile, the jump in interest rates has put the cost of a big house out of more people's reach.
Mickey and Jane Finn put their five-bedroom, 6,200 sq. ft. home in Leesburg, VA, on the market in April, but already they've cut the price and now they've decided to put it up for auction. With their two children grown, they're eager to move to a place half the size. "We don't need this big a house anymore--if we ever did," says Mr. Finn, age 63.
Source: The Wall Street Journal, June 16, 2006