Real Estate

McMansions prove to be poor investment

Wait, no one wants ugly homes?

Around the turn of the century, many Americans began buying McMansions, tract-built luxury homes, according to an article by Patrick Clark for Bloomberg.

A McMansion or mansion home is defined as a home with at least two of the following traits, according to an anonymous blog.  

  • Over 3000 square feet
  • Five or more bedrooms
  • Three or more full bathrooms
  • A three-car garage

To read more on the difference between a mansion and a McMansion, click here.

This shows the difference between a mansion and a McMansion:

Click to Enlarge


(Source: mcmansionhell)

As it turns out, these mimic-mansion homes, which reached popularity in the early 2000s, are losing their value faster than other higher-end homes, according to the Bloomberg article.

Click to Enlarge


(Source: Bloomberg, Trulia)

Because McMansions aren’t specifically called such, it can be difficult to compile the data, the article states. Trulia measured the prices appreciation for homes built between 2001 and 2007 that have from 3,000 to 5,000 square feet, which captures homes built at the height of the trend.

From the article:

McMansions cost more to build than your average starter ranch home does, and they will sell for more. But the return on investment has dropped like a stone. The additional cash that buyers should be willing to part with to get a McMansion fell in 85 of the 100 largest U.S. metropolitan areas. For example, four years ago a typical McMansion in Fort Lauderdale was valued at $477,000, a 274 percent premium over all other homes in the area. This year, those McMansions are worth about $611,000, or 190 percent more than the rest the homes on the market.

So what makes up this difference? The article offers two explanations. The first is that builders spend the last five years flooding the housing markets with new large homes, therefore bringing the prices down.

The second possibility: Americans just don’t want to buy an ugly home.

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please