McMansions are history. What had been conceived as status symbols for emerging wealth are now regarded as crass, wasteful mistakes within the wake of the housing bubble. Demand for large, sprawling homes packed with luxury amenities on postage-stamp lots, according brand new research, has crashed. Smaller floor plans and more practical amenities are becoming the norm. Real estate and design professionals seem certain that the demise of the McMansion is permanent.

McMansion era deflates under its own excess fat

Critics have dismissed McMansions as starter castles, garage Mahals or faux chateaus. The large, gaudy residences sprouted up everywhere during the housing bubble. With the bursting of that bubble, demand for McMansions might never rebound. TIME reports that Trulia has released a report on real estate trends that said the average square footage of an American home is decreasing for the very first time in 60 years. In 1950, 983 square feet was the average size of homes within the United States. According to Trulia’s American Dream Survey, by 2004 the average had swelled to 2,349 square feet. McMansions, categorized at a minimum of 3,000 square feet, were sought by only 9 percent of the people questioned in a different study, the Trulia-Harris Interactive Survey. A majority of the housing market, 64 percent of buyers, sought homes from 800-2,000 square feet.

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The amount of mortgage approvals in March this year has risen by 4% to 39,230 and according to the figures released by the Bank of England, the rise in mortgage approvals might continue going up.

The total value of all the mortgages that were approved in March came to £4.6 billion, this is a total increase of £900 million on the previous month, however, this increase is not as large as the estimated average of £1.6 billion, or even as big as the increase that we saw in February of £1.5 billion, however, the total amount of money approved through mortgages in March, £4.6 billion which is well over the monthly average.

There was also some encourgaging news from the building societies, the overall amount of mortgages that had been approved in March rose to £1,542 million which is double the amount approved in the previous month.

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The current mortgage lending and real estate debacle has created a huge boom in the private mortgage note business (Mortgage Notes created as a result of owner financing). Anxious home owners are increasingly becoming the mortgage lender by necessity as lending institutions have moved to the other extreme in mortgage lending practices. In the sub-prime days, mortgage companies would give you a mortgage, in many cases for 100% of the home’s value if you simply had a pulse. Now, with the exception of government backed mortgages (FHA, VA, USDA), you will need twenty percent down, almost pristine credit and 100% documentable income via federal tax returns. Unfortunately, these very tight lending practices have left many very good, low risk home buying prospects out of the market. This is particularly true for millions of self-employed homebuyers who often have plenty of cash for a down payment ansd good credit. These homebuyers simply may not be showing a lot of taxable income so as to keep their taxes to a minimum. Their aggressive tax strategy means they can’t get a a home loan. As a result, the home seller needs to step in to save the day.

Now, I realize that every homeowner may not have this option, but it could be a great alternative for a lot of home sellers. {It is a great option for homeowners who have some equity in the property as opposed to those where the mortgage is equal to or greater than the value of the home.|It will work best for homeowners that have a lot of equity in their home where as it won’t work for people with little to no equity.} Interestingly, a lot of home sellers are not even aware that it’s possible to sell this owner financed note, which is a highly valued marketable financial instrument. They can even sell their private note to a mortgage buyer (also known as a note buyer) within a few months after closing when the note accrues a little “seasoning’. Many note buyers will be willing to convert the mortgage into a lump sum of cash. This essentially gets the seller an all cash deal and although the homeowner takes a discount on the private mortgage to sell it (a dollar today is of more value than a dollar tomorrow), the result is it moves the home quickly, usually fetches top dollar and the property can usually be sold without any sales commission. The net result is almost always win for both the seller and buyer.

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