Do McMansions Impact Local Housing Prices?

Real Estate Agent with Hollish Hill Group, JPAR Stellar Living

Are homes being torn down in your neighborhood and replaced by massive houses? As land becomes more scarce, builders are seeking neighborhoods with large lots to accommodate massive new homes and buyers are paying top dollar for them.

Have you wondered how these new homes impact the value of the older homes in the neighborhood? Does it make sense to upgrade your current home or will it be torn down when you decide to sell? The "renovate or move" question is one we've been helping homeowners answer for years, but the impact of tear downs and rebuilds adds another variable to neighborhood prices. We wondered if there was a way to calculate and predict a tipping point. A point when it no longer makes sense to upgrade because it will be sold to a builder.

One local agent told us she's telling sellers their properties are worth less than an empty lot because the builder/flipper has the added expense of demolishing their home. It is painful for sellers to hear.

We've noticed the first massive homes replacing older ones will sit a bit longer on the McMAnsionmarket, likely because of appraisal for non-cash buyers or the tendency of buyers to forgo buying the most expensive home in a neighborhood for the least expensive home in a "better" more expensive neighborhood. But if you neighborhood is transitioning and you own one of the older, well  maintained homes, when do you stop thinking about upgrades, or even maintenance? There isn't an easy answer - it involves some calculating for each neighborhood. If you'd like help with that calculation in your neighborhood, contact Dana Hollish Hill at 202-271-5301.

Posted by


Dana Hollish Hill
REALTOR * Broker * Coach 
JPAR Stellar Living
800 S Frederick Ave, Suite 200, Gaithersburg, MD 20877
office 301.944.9070  
cell  202.271.5301

Comments (4)

Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

In our city of Sacramento, there is a push to make everything multi-family use when it comes to building.   I worry the density is going to create issues with traffic, etc.  

Jul 28, 2021 01:05 AM
Dana Hollish Hill


We are seeing that movement coming to our area as well. I'm worried about overcrowding in the schools. We aren't building schools fast enough in our county to accommodate the population without increasing density. 

Dec 17, 2021 07:42 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Dana - this is an issue facing many areas of the country.  There is no "easy" solution.  

Jul 28, 2021 08:46 AM
Dana Hollish Hill

Michael - You are so right. When I heard that my fellow agent was telling people that their home was worth less than a vacant lot, I was shocked. I wouldn't want to be delivering that news to any home owner. 

Dec 17, 2021 07:44 AM
Rocky Dickerson
Realty One Group - Las Vegas, NV
Superior Service!

Great information Dana! That is something I had not pondered before and yet I can see it happening in the future here.

Jul 28, 2021 07:04 PM
Dana Hollish Hill

Rocky - I've been trying to figure out what the tipping point is in neighborhoods - when there are enough mcMansions that the current owners know their home is a tear down. Looking for a timeline or percentage of rebuilds. It's a more difficult calculation than you might think. If you ponder it and come up with a methodology, let me know. 

Dec 17, 2021 07:48 AM
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

Hi Dana Hollish Hill . I guess my attitude is that as long as I get my asking price I could care less as to what the new owners do with it. If they need to borrow a match and a gallon of gasoline I'll lend it to then.

Dec 17, 2021 07:15 AM
Dana Hollish Hill

Bob - My neighborhood includes a mid century modern section that is losing properties to rebuilders. The people who love them would like them preserved, but I think the sellers feel the way you do. 

Dec 17, 2021 07:49 AM