The 'McMansion' trend in housing is slowing
Economic hard times, plus shifting neighborhood and urban values, are key factors.
Complete with an Oval Office and Lincoln Bedroom, the Atlanta White House became a symbol of developers reshaping the urban landscape by tearing down modest ranches and bungalows and plopping McMansions in their place.Skip to next paragraph
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The religiously themed mini-White House – which required the razing of three brick ranches – is now up for sale, facing foreclosure this week if the builder, an Iranian-born entrepreneur, can't get a $9.88 million selling price.
New York finance blogger Rolfe Winkler calls it a "delicious story" rife with symbolism about overheated real estate and leveraged dreams that sparked the biggest national real estate slump since the Great Depression.
But the plight of this White House also marks a major shift in the transformation of American neighborhoods – perhaps the end of the McMansion era. Indeed, it may allow thousands of communities from Pasadena to Pittsburgh to more accurately balance the living requirements of modern Americans with a widespread desire to maintain older neighborhoods.
"We're advising communities to take advantage of this slowdown and use it as a cooling-off period," says Adrian Fine, a regional director for the National Trust for Historic Preservation in Washington. "It gives them a little more time to have a less heated and less controversial discussion to protect a specific neighborhood and balance that with the need for growth and development."
With housing prices off by 18 percent in 20 US cities in the last year and new home starts at a 26-year low, bulldozers have slowed their march across American cities and towns.
In Westport, Conn., teardown permits are down in the last year by 33 percent – a figure that experts say can be extrapolated nationwide, though teardown trends do have significant regional variations. Analysts expect the lull to last at least five years, perhaps 10.
Teardown trend slower but not over
"The idea that you're going to make a lot of money tearing down an old house to build a new one, that's gone," says Morris Davis, a real estate economist at the University of Wisconsin in Madison who has advised the Federal Reserve on the teardown trend.