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Huge Homes Drive Away Would-Be Buyers


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2014 Mar 3, 1:39am   15,190 views  42 comments

by OurBroker   ➕follow (0)   💰tip   ignore  

Homes keep growing in size, families keep shrinking and household incomes are 9 percent lower than in 1999. The inevitable result is that new home sale activity has plummeted: sales in 2013 were 974,000 units below the transactions seen in 2005.

When people ask "how can I cut my mortgage costs" the answer is obvious: Buy a smaller home yet the vast and voluminous products created by the home building industry do not align with the needs and preferences of those who might be in the marketplace for a new house.

Why Are Homes So Damn Big?

#housing

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4   John Bailo   2014 Mar 3, 2:03am  

OurBroker says

voluminous products created by the home building industry do not align with the needs and preferences

The thing is that the volume of a house is determined by the enclosed surface area. Hence it's quite easy to expand these (as you note by ceiling height) with a small amount of materials and create what looks to be a bigger home.

5   OurBroker   2014 Mar 3, 2:20am  

John -- Agreed. The problem is that by raising the height of the ceiling it means the home eternally requires more energy consumption for heating and cooling.

I suspect that monster homes will simply become more difficult to sell in the future because people will generally not want the costs associated with bigger houses -- utilities, taxes, mortgage payments, etc.

6   justme   2014 Mar 3, 2:36am  

It is not called "homes", it is called houses.

7   wave9x   2014 Mar 3, 2:43am  

Mammoth McMansions are the Hummers of real estate, soon to be an anachronism - inefficient, tacky, poorly constructed. They are also usually shoehorned onto the smallest plot of land possible to maximize builder profits.

8   OurBroker   2014 Mar 3, 2:48am  

If you get more profits per unit by building bigger units than you would get by building smaller but more numerous units per acre then building bigger units is the strategy many builders will adopt. One problem is that it has reduced new home sales by nearly a million units since 2005. That means huge numbers of workers are now unemployed, and that's not good for the economy because people without jobs can't spend.

9   New Renter   2014 Mar 3, 4:00am  

Heraclitusstudent says

It's not even so much a question of smaller.

My impression is builders build mostly luxury homes.

What is needed is basic, minimal homes.

They can be smaller but don't have to be tiny.

A family can use 3-4br to be comfortable.

It just doesn't need a ultra high ceilings.

It doesn't need walk-in closets.

It doesn't need a 3 cars garage.

And it doesn't need to be 4000 sqft.

Speak for yourself! I will however be reasonable and accept some of that monster sqftage in the form of a finished basement.

10   turtledove   2014 Mar 3, 4:06am  

Ceffer says

A massive home with repetitive living rooms, luxury bathrooms, unnecessary bedrooms, gymnasium sized kitchen and manicured grounds with horse stables, swimming pools, tennis courts etc.

:)

11   OurBroker   2014 Mar 3, 4:17am  

I'm not sure that basements are counted in square footage totals. Does anyone know?

12   hanera   2014 Mar 3, 4:31am  

OurBroker says

I'm not sure that basements are counted in square footage totals. Does anyone know?

Not counted. Square footage refers to livable space by human beings.

13   hanera   2014 Mar 3, 4:40am  

Thought McMansions have gone out of fashion because of rising cost of materials, labor and energy. It was popular when cost of land is relatively cheap. This is no longer true for many desirable neighborhood. In some neighborhood, land cost comprises 80%+ of the house price. So, in order to maximize the high cost of land, one should build as much square footage as allowable by laws. It translates to:
a. For a single home land, McMansion.
b. For a large tract of land, many small units.

14   OurBroker   2014 Mar 3, 4:57am  

I'm not so sure you get many small units with a larger piece of land. Look at the differences between old neighborhoods and new ones -- the new homes are eight feet apart and the old ones have much more space and privacy. I think in all cases what you get is the builder trying to maximize returns for a given amount of ground.

15   New Renter   2014 Mar 3, 6:03am  

hanera says

OurBroker says

I'm not sure that basements are counted in square footage totals. Does anyone know?

Not counted. Square footage refers to livable space by human beings.

Which makes the deal even better.

16   New Renter   2014 Mar 3, 6:13am  

APOCALYPSEFUCKisShostikovitch says

What fucking ASSHOLE! would build a mansion without a watchtower and a search light?

Does anyone really build mansion watchtowers anymore? Its just easier to build in an automated turret.

Seriously would you trust your safety to an underpaid mouth breathing flunkie who probably couldn't hit a barn with an M134 sitting atop one of these with his sandwich and thermos:

Or just have one of THESE keeping your and yours safe while you count your yams?

17   OurBroker   2014 Mar 3, 8:19am  

The latest in mansion design seems to include a safe room; that is, a bunker you can stay in with a snorkel for air while the peasants raid the place and eat your soup.

18   Tenpoundbass   2014 Mar 3, 10:06am  

We can't stand each others ass, that's why people need so damn much space. The more introverted we become, consumed with our digital world, the more space we need for doing absolutely nothing.

19   unclemat   2014 Mar 3, 1:02pm  

Tim Aurora says

Heraclitusstudent says

It just doesn't need a ultra high ceilings.

It doesn't need walk-in closets.

It doesn't need a 3 cars garage

I love high ceilings and love my walk-in closet( I think it is still small) and though I have a 2 car garage, I would love to have a 3 car garage.

All this bs talk about high ceiling annoys me. The architecture from 1940s to 1980s was infested with criminally low ceilings. 8 ft. and lower. I could not live in such a place, and I am barely 6 ft. tall. Feels claustrophobic. Even concrete blocks of flats in Eastern Europe would not go below 2.55 meters, which is about 8' 4" - these 4 inches make HUGE difference in feel.

I think a minimum ceiling height in a small/moderate size room is 8.5 ft, with 9 ft being reasonable standard. Larger rooms need 10 ft to be proportional.

I agree that above 10 ft. or two story rooms (especially foyers) are stupid and should be reserved for real mansions, not McMansions.

As far as engery is concerned it is not just about heat - tall ceilings help reducing cooling needs in warm climates. Hot air rises for fuck's sake!

20   New Renter   2014 Mar 3, 1:15pm  

unclemat says

All this bs talk about high ceiling annoys me. The architecture from 1940s to 1980s was infested with criminally low ceilings. 8 ft. and lower. I could not live in such a place, and I am barely 6 ft. tall. Feels claustrophobic. Even concrete blocks of flats in Eastern Europe would not go below 2.55 meters, which is about 8' 4" - these 4 inches make HUGE difference in feel.

I think a minimum ceiling height in a small/moderate size room is 8.5 ft, with 9 ft being reasonable standard. Larger rooms need 10 ft to be proportional.

I agree that above 10 ft. or two story rooms (especially foyers) are stupid and should be reserved for real mansions, not McMansions.

As far as engery is concerned it is not just about heat - tall ceilings help reducing cooling needs in warm climates. Hot air rises for fuck's sake!

I agree, high ceilings rock! 8' is too low. High ceilings do make a small room feel and sound bigger.

21   REpro   2014 Mar 3, 2:51pm  

hanera says

In some neighborhood, land cost comprises 80%+ of the house price. So, in order to maximize the high cost of land, one should build as much square footage as allowable by laws

Not true for big developers. This is what realtors tell you to support high price of house. In reality, land/building ratio is close to 20/80. More expensive land is chopped on smaller lots up to high rise condominium, to achieve as close as possible that ratio. Simply said, 80% value of land will makes entire project very, very risky.

22   REpro   2014 Mar 3, 2:57pm  

Call it Crazy says

OurBroker says

I'm not sure that basements are counted in square footage totals. Does anyone know?

No, they're usually not counted in the sq. ft.

Depend. What is quoted in living space? Exactly; all sqft area which is heated and/or cooled. That may include heated garage for example. But this may depend on county where you live.

23   hanera   2014 Mar 3, 3:25pm  

REpro says

Call it Crazy says

OurBroker says

I'm not sure that basements are counted in square footage totals. Does anyone know?

No, they're usually not counted in the sq. ft.

Depend. What is quoted in living space? Exactly; all sqft area which is heated and/or cooled. That may include heated garage for example. But this may depend on county where you live.

There is a long list of definition of livable space which we can obtain from the city council. To be livable, need minimum height of ..., ventilated, windows, etc. Basements by definition always don't have minimum height and windows, otherwise would be called family room :).

24   hanera   2014 Mar 3, 3:42pm  

REpro says

hanera says

In some neighborhood, land cost comprises 80%+ of the house price. So, in order to maximize the high cost of land, one should build as much square footage as allowable by laws

Not true for big developers. This is what realtors tell you to support high price of house. In reality, land/building ratio is close to 20/80. More expensive land is chopped on smaller lots up to high rise condominium, to achieve as close as possible that ratio. Simply said, 80% value of land will makes entire project very, very risky.

Not true. Didn't learn this from realtors. Figured out myself. Allow me to repeat:
a. For a single home land, McMansion.
b. For a large tract of land, many small units.

a. is usually undertaken by owner or small developer. Happened in expensive desirable neighborhood where there are many old houses which didn't maximize the square footage (long ago, land is cheap, so build single story with big gardens). Now, minimum garden, maximum square footage allowable by regulations. Before rebuilding, ratio is 80/20 for land/house, after rebuilding, ratio is reduced to 40-60/40-60. Through time, go back to 80/20.

b. Happened in many places (not just USA, everywhere) that allow high density housing. So your ratio of 20/80 for land/building is correct.

25   REpro   2014 Mar 3, 4:04pm  

I work with developers and do financial analyses for them. I do not take in consideration buy a lot and build a house scenario.

26   Y   2014 Mar 3, 4:37pm  

Bingo!
Colder climates tend to have lower ceilings, opposite for warmer areas.
But, don't let that stop the bitchers from bitching...

unclemat says

As far as engery is concerned it is not just about heat - tall ceilings help reducing cooling needs in warm climates. Hot air rises for fuck's sake!

27   OurBroker   2014 Mar 3, 6:21pm  

We often go to New Orleans. Many of the older shotgun houses there have higher ceilings, say 10 feet or 12 feet. In theory that should be good for hot weather but such homes sometimes do not work well because they lack insulation. We were in one property which had been "modernized," a term which did not include insulated floors. You could see daylight in some places and the result was a huge heating bill. In winter it was more like camping than housing.

The real issue today is how well a home is insulated. Even NAHB says "the most unlikely features to show up in 2014 homes are laminate kitchen countertops, an outdoor kitchen, an outdoor fireplace, a sunroom, a two-story family room, a media room, a two-story foyer and a whirlpool in the master bathroom."

28   bob2356   2014 Mar 3, 6:37pm  

hanera says

There is a long list of definition of livable space which we can obtain from the city council. To be livable, need minimum height of ..., ventilated, windows, etc. Basements by definition always don't have minimum height and windows, otherwise would be called family room :).

It all depends on state and local laws. Usually finished basements are included in sq footage. Some states don't count closets, pantries, or any space you can't stand in. Some states basically allow measuring the outside of the house or have no rules at all. I've owned in different states all around. What would be a 2400 sq ft house in WA would be 1800 sq ft in NY.

29   OurBroker   2014 Mar 3, 7:54pm  

It is amazing, as Bob points out, that we do not have a standard way to measure homes. When I ask about square footage I never get the same answer twice.

There is an ANSI protocol, Z765-2003, which can be used to uniformly measure houses. One problem: The use of this standard is voluntary which means it's no standard at all.

See: http://www.ourbroker.com/library/whats-the-right-way-to-measure-square-footage/

30   zzyzzx   2014 Mar 3, 11:29pm  

OurBroker says

those high ceilings create cubic area which must be heated and cooled.

Which is pretty high on my list for avoiding them.

31   zzyzzx   2014 Mar 3, 11:30pm  

OurBroker says

We often go to New Orleans. Many of the older shotgun houses there have higher ceilings, say 10 feet or 12 feet. In theory that should be good for hot weather but such homes sometimes do not work well because they lack insulation. We were in one property which had been "modernized," a term which did not include insulated floors. You could see daylight in some places and the result was a huge heating bill. In winter it was more like camping than housing.

The coldest winter I ever had was in an uninsulated apartment in Raleigh, NC.

32   zzyzzx   2014 Mar 3, 11:33pm  

OurBroker says

I suspect that monster homes will simply become more difficult to sell in the future because people will generally not want the costs associated with bigger houses -- utilities, taxes, mortgage payments, etc.

True, but they are also perfect for multi-generational housing, which should be more popular in the future.

33   OurBroker   2014 Mar 3, 11:42pm  

Not just multi-generation housing, McMansions may also have value as B&Bs. small-scale nursing homes, grain silos, 19-room school houses and barns for horses, mules, chickens and goats.

34   bob2356   2014 Mar 4, 10:47pm  

zzyzzx says

The coldest winter I ever had was in an uninsulated apartment in Raleigh, NC.

Try living in New Zealand where the entire country is uninsulated, burns wood, and most stores don't use heat. I was much warmer in upstate NY.

35   mmmarvel   2014 Mar 4, 10:54pm  

OurBroker says

I'm not sure that basements are counted in square footage totals. Does anyone
know?

Depends on the basement. Is it finished and considered (by the building department) to be habitable? If so, then (in most cases) it is counted. If it's a typical unfinished, mostly used for storage basement, it's not considered.

36   OurBroker   2014 Mar 4, 11:14pm  

I cringe at any standard which includes the term "mostly" and relies on the eyes of the beholder.... Below is my example of a thoroughly-habitable basement.

37   New Renter   2014 Mar 5, 12:01am  

OurBroker says

I cringe at any standard which includes the term "mostly" and relies on the eyes of the beholder.... Below is my example of a thoroughly-habitable basement.

Oh HELL yes!

CaptainShuddup says

We can't stand each others ass, that's why people need so damn much space. The more introverted we become, consumed with our digital world, the more space we need for doing absolutely nothing.

Which is why full basements should be mandated by law in every building code of America.

38   OurBroker   2014 Mar 5, 12:20am  

This basement was in a little village outside Dijon, France. From the outside you would never guess how huge it was.

39   mmmarvel   2014 Mar 5, 12:32am  

OurBroker says

I cringe at any standard which includes the term "mostly" and relies on the
eyes of the beholder.... Below is my example of a thoroughly-habitable
basement.


BUT that would NOT be considered habitable by a building department (I'm a building inspector so I know of what I speak). It probably doesn't have (or was designed to have) climate control. Egress (escape) is limited. It was (and is) being used (and was designed) as a wine cellar. It was not designed for habitate by a human, not as a sleeping, eating, or any normal human use of the space.

40   OurBroker   2014 Mar 5, 12:39am  

Actually, there is a ton of space, at least two exits, tables and chairs, etc. The climate control is absolute and precise. In the event of nuclear attack it's the right place to be.... Each barrel holds the equivalent of 300 bottles of wine.

Below is another cellar -- with a stone table.

41   New Renter   2014 Mar 5, 12:39am  

mmmarvel says

OurBroker says

I cringe at any standard which includes the term "mostly" and relies on the

eyes of the beholder.... Below is my example of a thoroughly-habitable

basement.

BUT that would NOT be considered habitable by a building department (I'm a building inspector so I know of what I speak). It probably doesn't have (or was designed to have) climate control. Egress (escape) is limited. It was (and is) being used (and was designed) as a wine cellar. It was not designed for habitate by a human, not as a sleeping, eating, or any normal human use of the space.

You do realize this is a joke, right?

42   OurBroker   2014 Mar 5, 12:44am  

Hopefully, yes.

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