Remember McMansions? You know, those huge homes with large large foyers and chandeliers that oozed of wealth, but were really made with cheap building materials. Well, according to a recent article on Newsweek.com they’re making a comeback. In fact, they go so far as to say they’re a potential harbinger of another housing bubble due to their price run-up since the crash. Whether this is true or not, the numbers are certainly interesting when you consider that a lot of today’s price appreciation is due to record-low levels of inventory – a factor not experienced during the run-up to the last housing crisis.
“Paradoxically, McMansions also improved people’s opinion of their neighborhoods because they are associated with better amenities as rich people move in. But overall McMansions reduced people’s satisfaction with their own homes — fueling the building of bigger and bigger units.”