The ultimate symbol of the pre-recession boom is back

http://www.washingtonpost.com/blogs/wonkblog/wp/2017/06/26/the-ultimate-symbol-of-the-pre-recession-boom-is-back/

If there’s anything that typifies the boom times before the Great Recession, it is the McMansion. These sprawling houses proliferated around the country in the 2000s, as banks shelled out easy credit to fuel a housing bacchanalia they thought would never die. McMansions became the ultimate symbol of living beyond one’s means. Unlike your standard mansion, McMansions aren’t just large — they are tackily so. Looming over too-small lots, these cookie-cutter houses are often decked out with ersatz details, like chandeliers and foam-filled columns. While their features mean they can command a decent price, many of these houses are shoddily built. During the recession, their construction ground to a halt. Today, McMansions are not exactly cool, especially compared with the exposed-brick urban lofts young people today will pay exorbitant prices for. But with the recent recovery of the housing market, they are coming back anyway. As Americans have started building and flipping houses again, they are once again buying McMansions. Since 2009, construction of these homes has steadily trended upward, data from Zillow, a real estate website, shows. The median home value of McMansions is also rising, at a pace that eclipses the value of the median American home. (Since a “McMansion” is in the eye of the beholder, Zillow doesn’t have a targeted way of tracking them nationwide. For this article and the video above, they approximated the category by focusing on houses built after 1980 that were greater than 3,000 square feet but less than 5,000 square feet. They also looked for houses located on streets where the homes are similarly sized, on similarly sized lots, and built within six years of each other, to isolate cookie-cutter communities.) Many casual onlookers have forecast the death of the suburbs in recent years, especially as younger renters and buyers turn an eye to city centers. Skylar Olsen, a senior economist at Zillow, says that young people today have far more interest in living in urban environments. “That’s where jobs had been growing fastest over the course of this economic recovery over the past five years,” says Olsen. Yet younger people who are starting families are still moving to the suburbs for more room, she says. About half of all millennials that purchased a home last year did so in the suburbs, according to Zillow data. Their decision is also supported by cheap energy costs, which make it affordable to commute. in mid-June, the nationwide average price of regular gasoline was $2.32 a gallon. Like the McMansion and the pickup in the housing market, it’s another source of deja vu. After remaining elevated for years, oil prices are now roughly the same as they were June 2000, when adjusted for inflation. Kate Wagner, an architecture critic, wishes America would have learned its lesson about McMansions the first time around. She spends her free time tearing apart their architectural anachronisms on her blog, McMansion Hell. Wagner describes McMansions as a particular artifact of economic history, one whose physical form was the product of a new American pastime: flipping houses. Rising home values, coupled with reality TV hits like “House Hunters,” encouraged Americans to stop thinking of their home as a dwelling and start thinking of it as an asset. “They were built to sell in the year they were selling, not for future generations,” said Wagner. “These houses are kind of disfigured, because they were built from the inside out, to have the most amenities to sell faster.” A culture of house flipping helped to quantify certain home improvements, like the addition of colossal marble islands and palatial foyers designed to grab the attention of buyers. That gave these houses even more of a cookie-cutter feel. “It’s about invoking the symbolism of having a lot of money, but not spending a lot of money on the house,” says Wagner. Today, the U.S. housing market continues to recover — making flipping more and more popular, as median home prices hit record highs. Some, like Chris Rupkey, chief financial economist at MUFG Union Bank, worry there could be a new bubble in the making. For McMansions, that could mean the boom times are once again around the corner.