In the era of excess of the late ‘80s, the booming economy of the ‘90s, and the continued proliferation of the "me first" attitude held by many during the Bush years, corporate types commonly rewarded themselves with a large luxury vehicle and an equally large home way out in the suburbs. Success was measured by wealth and showing off that wealth in the form of status symbols was the thing for many years. However, there’s some concrete evidence that shows that home buyers are glossing over the marble-plated homes that really defined the ‘90s and early 2000s and are buying more modest residences in the city. According to a recent analysis from Trulia covered by the Chicago Tribune, the McMansion’s day "has come and gone."
McMansion owners are finding that their homes, generally in the 3,000 to 5,000 square foot range, are spending longer on the market and are taking more price cuts than more traditional homes. According to the data from Trulia, premiums for McMansions have dropped significantly just in the last few years. And the median price for these large homes has also dropped a bit—from $598,000 in 2007 to $485,000 for this year. But beyond cultural trends focusing on excess and consumption, the Tribune notes that many home buyers who purchased these large, newly constructed homes in the early 2000s believed that they were making a smart investment decision and assumed that these already large and pricey homes would continue appreciating in value over time.
However, the slowing of McMansion sales in the Chicago area is nothing new. In April, Crain’s noted that the inventory of unsold mega-mansions in the Barrington area was piling up. And for more empirical evidence, all one needs to do is drive through the subdivisions of South Barrington or North Barrington to see all of the for sale signs posted up next to the driveways of these homes. A quick search for homes at least 5,000 square feet currently for sale in the area shows that there are at least 1,500 of these kinds of properties available. Many of these homes have spent hundreds of days on the market. There are even a few that have been on the market for over 1,500 days.
We’ve been following large suburban mansions on this blog for years. Many have had to dramatically reduce their ask by substantial percentages to ultimately find a buyer. Others take major price reductions and are still unable to find a buyer. Listing agents still use the same old tool box of tricks to sell these homes, often describing the homes as "opulent" and ones that buyers "deserve" to own—hinting at exclusivity and baiting nouveau riche buyers into thinking that the purchase of a McMansion is still a wise investment. There are even some famous Chicagoans who have struggled to unload their McMansions, particularly Michael Jordan and his gargantuan Highland Park mansion.
There have been countless reports and studies on why millennials are not buying homes right now. Generally, millennials do not make as much as their parents did and millennials tend to also be more altruistic than their parents. It’s also easier to uproot oneself and move across the country if one decides to do so—either for work or just simply to have a change in scenery—and owning a house can make moving more difficult. But when it comes down to it, McMansions are just not what buyers want. The tacky, over the top exteriors, the faux gold-plated interior finishes, and the sprawling yards and pools that require upkeep are no longer viewed as desirable amenities, and unfortunately, many owners sitting on large, newly constructed homes may have to sit on them quite a bit longer if they’re looking to make a return on their investment.
- The McMansion's day has come and gone [Chicago Tribune]
- McMansions no longer attract buyers, says new study [Curbed]
- Michael Jordan's Highland Park Mansion Now Half of Original Asking Price [Curbed Chicago]
- Barrington archives [Curbed Chicago]