It seems the heyday of the so-called McMansion may have come and gone. The Associated Press reports that some homebuilders, in response to changes in consumer demand, have moved away from building large homes with expensive features in favor of smaller, more efficient homes. Builders are cutting back on square footage in order to compete with the surplus of pre-owned homes on the market. Also, the decline in home prices is making it difficult for builders to make a profit off large homes.
Los Angeles-based KB Home began downsizing its homes last year by cutting 1,000 square feet from its 3,400 square-foot models, and cutting the sale price by about $150,000. This year the company launched an even smaller set of homes starting at 1,230 square feet for approximately $200,000. The first of these smaller-home developments was rolled out in Beaumont, Calif., this year, but KB plans to expand the homes nationwide in 2009.
“The only way to respond to the lower price environment … is to make the home smaller,” said Nishu Sood, a Deutsche Bank analyst. “As you kind of reduce the floor plan size, we’re getting back to more the way things were historically, kind of undoing the excesses, not just from a price perspective but home size and (fewer amenities).”