There was a small ray of hope just after the Lehman collapse that one of the most deplorable characteristics of US society - the relentless urge to build massive McMansions (funding questions aside) - was fading. Alas, as the Census Bureau today confirmed, that normalization in the innate desire for bigger, bigger, bigger not only did not go away but is now back with a bang.
According to just released data, both the median and average size of a new single-family home built in 2013 hit new all time highs of 2,384 and 2,598 square feet respectively.
And while it is known that in absolute number terms the total number of new home sales is still a fraction of what it was before the crisis, the one strata of new home sales which appears to not only not have been impacted but is openly flourishing once more, are the same McMansions which cater to the New Normal uberwealthy (which incidentally are the same as the Old Normal uberwealthy, only wealthier) and which for many symbolize America's unbridled greed for mega housing no matter the cost.
Not surprisingly, as size has increased so has price: in 2013 both the average and median price for sold new single-family homes hit record highs of $324,000 and $268,900.
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The data broken down by region reveals something unexpected: after nearly two decades of supremacy for the Northeast in having the largest new homes, for the bast couple of years the region where the largest homes are built is the South.
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While historically in the past the need for bigger housing could be explained away with the increase in the size of the US household, this is no longer the case, and as we showed last week [8], household formation in the US has cratered, so the only logical explanation for this latest push to build ever bigger houses is a simple one: size matters.
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Furthermore it turns out it is not only size that matters but amenities. As the chart below shows, virtually all newly-built houses have A/C, increasingly more have 4 or more bedrooms, 3 or more car garages, 2 or more stories, patios and porches (at the expense of decks), and other critical luxuries.
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In conclusion it is clear that the desire for McMansions has not gone away, at least not among those who can afford them. For everyone else who can't afford a mega home or any home for that matter: good luck renting Blackstone's McApartment.
For those curious for more, here is a snapshot of the typical characteristics of all 2013 [11]new housing courtesy of the Census Bureau:
Of the 569,000 single-family homes completed [12] in 2013:
- 518,000 had air-conditioning.
- 59,000 had two or fewer bedrooms and 251,000 had four bedrooms or more.
- 27,000 had one and one-half bathrooms or less, whereas 188,000 homes had three or more bathrooms.
- 166,000 had a full or partial basement, while 91,000 had a crawl space, and 312,000 had a slab or other type of foundation.
- 305,000 had two or more stories.
- 333,000 had a forced-air furnace and 216,000 had a heat pump as the primary heating system.
- 347,000 had a heating system powered by gas and 214,000 had a heating system powered by electricity.
The average single-family house completed was 2,598 square feet.
Of the 307,000 multifamily units started [13] in 2013, 23,000 were age-restricted.
Of the 195,000 multifamily units completed [13] in 2013:
- 14,000 were age-restricted.
- 129,000 were heated with electricity and 64,000 were heated with gas.
- 91,000 had two or more bathrooms.
- 79,000 had one bedroom and 27,000 had three or more bedrooms.
The average square footage of multifamily units built for rent was 1,082.
Of the 10,000 multifamily buildings completed [14] in 2013:
- 5,000 had one or two floors.
- 6,000 used electricity as the primary heating fuel.
Of the 429,000 single-family homes sold [15] in 2013:
- 120,000 used vinyl siding as the principle type of exterior wall material, while only 12,000 used wood.
- 300,000 had 2-car garages, whereas 98,000 had garages for three cars or more.
- 207,000 had one fireplace and 20,000 had two or more fireplaces.
The average sales price of new single-family homes sold was $324,500, compared with the average price of $292,200 in 2012.
The average price per square foot for new single-family homes sold was $93.70.
The average new single-family home sold was built on a lot of 15,456 square feet.
91,000 contractor-built single-family homes [16] were started in 2013.
The average contract price was $298,000.