From Alain Pinel: Is Bigger Better?
Déjà vu?..… Back in the old days––I mean Very old, like the medieval days––homes were either huge or tiny, too big or too small. If you were born a Lord, chances are you lived in a castle big enough to play hide & seek with no risk of ever being found. Buckingham Palace, as we were reminded during the Olympic games, has over 100 rooms. Not bad, even for a queen.
On the other end, if you were born a regular citizen, you could consider yourself fortunate to have a roof over your head, even if you had to share your small quarters with cows & pigs. No, life is not fair.
Eventually, many of the smart “common people” became entrepreneurial and set up lucrative businesses in the emerging world of commerce and finance. Bourgeoisie was officially born and, together with it, the need to display success. The word ”materialism” was not yet introduced in the dictionary, but existed just the same. All of a sudden, fancy townhomes were built on top of downtown shops and mansions started mushrooming in the countryside.
At the same time, monarchy went out of fashion, a lot of Lords went broke and many lost their heads to the guillotine. Today, quite a few castles have been transformed into museums. Others make terrific hotels or B&Bs, where tourists enjoy splashing bedrooms while the host, who collects the money, sleeps in the basement…
Over time, the square footage of a house has become a way to measure success. Location has always been a big deal of course, as were the style of the house and the quality of the construction, but size is still the thing. Big is good. Bigger is better.
Where are we today, in 2012? Well, not too far away from the Middle Ages… Those who made it have their name on a mega property in the most expensive zip codes and those who are not there yet are buying whatever square footage they can afford and hope to grow equity and move it to a bigger and better home.
There is, however, something significant progressively changing the paradigm. The lifestyle of the wealthy is now vastly different from what it was during the post war era. Back then, people actually lived in and enjoyed their home every day of every month. With the ease of traveling, growing job mobility and the convenience of doing the coffee/newspaper pause downtown rather than at the breakfast table, a lot of people look at their home differently.
Ask yourself the following questions: How much time do you actually spend in your house? How much time do you actually spend in your yard? Are you enjoying the entirety of your home or are you… a prisoner in your own home to justify the mortgage? I know quite a few friends who go overboard: they paid a few hundred thousand dollars extra to buy a house with a bunch of extra bedrooms just to have a couple of beds for relatives when they visit once every other year for a couple of days! As much as I like entertaining, I think that for the extra money, you could buy a life pass to the Ritz Carlton for your guests and guarantee that you & they sleep better at night!
Over the last sixty years or so, condos have been exploding all over the US, from big cities to small suburbs and villages. At first, they attracted thousands who were looking for functional layouts, beautiful common grounds and convenient locations at a very affordable price. Today, buyers are far more diverse. Condo living is becoming a trend. I am not just talking about singles, seniors, students or buyers who cannot afford the price of land; I am talking also about wealthy buyers who deliberately choose to live that kind of trouble-free life.
The price tag for condo living can be pretty heavy too (there is one presently listed in Manhattan for…$100M!), not to mention the monthly Association dues. Security, concierge desk, clubhouse, exercise room, pool & spa, restaurants, etc. don’t come for free. I know nothing can replace a beautiful single family home surrounded by beautiful grounds. There is no price for serenity, privacy and full ownership. So the choice between a striking mansion in the suburbs and a fancy condo in the heart of the city has never been tougher. Decisions, decisions, decisions… I guess, if you can afford it, you should settle for both!
By Alain Pinel
Sr. Vice President / Managing Officer
Intero Real Estate Services, Inc.