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August 20th, 2010 10:41 AM by David W. Welch
There was an article on Yahoo today declaring the McMansion dead. I don't think I would quite agree that the large home is completely dead based upon the real estate sales data I found here in Orlando. There is definitely a strong preference for smaller homes with nearly 60% of the sales in the first six months of this year falling in the 1001 to 2000 square foot range. By the way, these numbers include all housing types, and also include distressed sales. When I look at the makeup of the active listings compared to that of the sold homes there are not enough homes for sale under 1500 square feet and a few too many for sale from 1501 to 3000. There are way too many for sale over 3500, but that is such a small percentage of the total market here.
The McMansion, or at least very large homes are still selling here in Orlando just not like they used to. I suspect if I look just at single family home buyers, excluding investors the numbers may look a bit different. Investors definitely have a bias toward smaller homes. In my experience a 1400 3/2 rents for about the same as a 1700 3/2 but costs less. With over 50% of our sales here going for cash, I believe there is a very heavy influence from investors skewing the sales data. By the way, we generally consider a six month supply of homes to be a balanced market. As you can see from the data above, we are pretty close.
David Welch Real Estate Optimist, Orlando Real Estate