Super-sized homes are having a hard time of it these days. Once the envy of media darlings and thought leaders, palatial homes have limited appeal to the majority of today’s buyers regardless of their respective pocket books and sit on the market longer…sometimes for years.
Currently, three mansions in different locations with different architectural styles share the title “The largest house in town.” All three of these houses are 4-5 times larger than the size of the median home in their different posh neighborhoods. And all three share prolonged listing times, numerous price discounts and the very real potential for negative return-on-investment.
According to Jonathan Miller, president of Miller Samuel Appraisers and Consultants, “There are diminishing returns on size. Just by adding square footage doesn’t meant that it contributes proportionately to value…larger houses can have a lower price per square foot when you get past a certain size.”
Jeffrey Hyland, president of Hilton and Hyland Real Estate, said, “You never want to be the most expensive house in any community, whether that community is the tract, the subdivision or the city neighborhood.”
Hyland believes there is always a buyer for the best property but “the best property” in terms of the most elite trophy home details, such as view, architect, provenance of the house, location, privacy, security, etc. “…can create more value than size…if the house next door has a better view, it probably commands a higher price.”
Hyland also reminds us that maintaining a giant-sized, palatial house can be off-putting to younger buyers, particularly younger millionaires who prefer smaller, better built and better “amenitized” houses.
Alexandra Sierra of Compass Florida said, “Millennials who buy houses between $2M-$4M want functionality. It’s very rare that you see them buying mansions where you have to take care of huge lawns and enormous houses. They want simple, they want smaller square footage and they’re thinking about how the floor plan flows. It’s going to make these mega-mansions obsolete.”
The result of such preferences? Developers and owners of palatial homes may have a very hard time selling such homes in the future, if not in the present tense.
Thanks to MansionGlobal’s Beckie Strom for source data.
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