The “McMansion” officially changes from status symbol to liability.
Twenty years after the housing boom of 2006 new data from Zillow reveals a fundamental shift in the American Dream: Buyers are abandoning “wasted shell” and mahogany footprints for highly efficient “sanctuaries.”
As insurance premiums and property taxes soar, real estate experts warn that the excessive, unoptimized estates of the middle class pose a financial risk to homeowners who cannot adapt.
THE HOUSING MARKET Cools as Price Growth Hits the Slowest Pace Since the Recovery from the Great Recession
“With rising insurance costs in Texas and higher property taxes, a home over 5,000 square feet that isn’t energy efficient or thoughtfully designed can definitely feel like a liability. But a well-built, high-performance home of that size with strong insulation, efficient systems and functional layout still represents the American Dream here,” he added. “The shift isn’t completely away from scale; it’s away from wasted scale.”
Construction workers build a new home in a new neighborhood in Sugar Grove, Illinois, a suburb outside Chicago, in August 2006. (Getty Images)
“A 6,000 or 7,000 square foot home built in 2006 with no impact glass, elevated construction, modern roofing and generator systems can absolutely feel like financial exposure,” Burrage noted. “Buyers are willing to pay for size, but only if it is designed for resilience.”
Going back to 2006 it was luxury granite and mahogany. By 2026, according to Zillow, pickleball courts and golf simulators (with listings up 25%) to whole-house batteries (up 40%) and zero-energy homes (up 70%), according to Zillow.
“Resilience and lifestyle go hand-in-hand. Whole-home generators, battery storage, hurricane-proof systems, smart-home integration and extended outdoor living are expected,” Burrage said.
These large California homes from 2006 look identical in size, make and color. | Getty Images
“A large home without these features significantly reduces the buyer pool. Meanwhile,” he said, “a slightly smaller but technologically advanced home designed for indoor-outdoor living often performs better in terms of demand and price.”
“Today’s buyers are much more informed about operating costs and long-term sustainability,” Polsky agreed. “In this market, lifestyle infrastructure and sustainability are no longer bonuses. They are basic expectations.”
Resale advice used to be: ‘Keep it beige.’ Now Zillow finds that buyers are bidding more for olive green and charcoal gray, with “color drenching” reporting a 149% increase. The experts said the “beige box” of the mid-aughts is now a harder sell.
Serhant. Founder & CEO Ryan Serhant shares his views on the housing market on ‘The Claman Countdown.’
“The sterile beige house from the mid-2000s definitely feels dated. Buyers today are responding to depth and personality, but it needs to be curated,” Polsky said. “We encourage sellers to modernize with warmer neutrals, layered textures and intentional moments of color. ‘Safe’ used to mean blank. Now safe means thoughtfully designed. Homes without character tend to photograph poorly and last longer.”
“Buyers want lighter, organic palettes with architectural texture and contrast,” says Burrage. “We advise our customers who build with us to strategically keep the interior fresh and light. A well-thought-out design can significantly influence buyer perception and the final sales price.”
If millennials and generation X As they become the primary purchasing power, they reject the norms of what once was. The real estate experts both answered “yes” when asked whether the market is seeing a permanent cultural shift in what “luxury” means.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
‘The Big Money Show’ discusses why millions of American homeowners aren’t selling.
“Boomers selling older estates should strongly consider updating systems and aesthetics,” Burrage said. “Buyers compare them to newly built coastal homes designed for climate resilience and lower business risk.”
“Boomers selling estates from 2006 should understand that today’s buyers are comparing everything to new construction with modern infrastructure. Updating mechanical systems, improving energy performance and refreshing interiors before putting them on the market can dramatically improve positioning,” Polsky points out. “The American Dream hasn’t disappeared, it’s just become more conscious. Buyers want homes that support how they live, not just how they are perceived.”
