McMansion era over, at least for now

The McMansion era is over – or at least on hold.

The average size of new homes has been trending down since 2007. And so have Americans' views on the size of their dream home, according to a new survey released by Trulia, a real estate website.

Only 9 percent of Americans think their ideal home was McMansion-sized (more than 3,200 square feet, according to the survey of more than 2,000 adults. Another 40 percent said their ideal home would be 2,000 to 3,200 square feet; 9 percent said it would be 800 to 1,400 square feet.

"Americans are veering away from McMansions," said Pete Flint, CEO of Trulia, in a conference call with reporters Thursday. "This market correction has made people realize they didn't really need all that space."

Americans have downsized before in the face of recession only to expand into even bigger homes afterward.

In the mild 1990-91 recession, the median size of new single-family homes declined from 1,905 to 1,890 square feet, according to Census Bureau data (.pdf). Then in 1992, it began a 16-year climb to record highs.

The same thing happened a year before the much more severe recessions of 1980 through 1982. Home sizes began a four-year fall that reduced the median size of new homes by 8 percent. Then, new homes began expanding again.

Will this latest recession be any different? From 2007 to 2009, the median size has fallen at a faster rate than anytime since at least 1973, declining 6 percent. And the outlook for 2010 suggests that the downtrend will continue for a while.

Since the 1950s, the average size of homes has increased in every decade (even with the recessionary hiccups), said Mr. Flint. "While we're only six months into the new decade, I predict that this will be the first decade where homes are built and bought smaller and smarter. The current real estate crisis will have a lasting effect on future generations."

Bold words. Much will depend on what happens with the economy.