'McMansion' Owners Caught in a Housing Bubble

IRVINGTON, N.Y., July 30, 2006 — -- Doctors Patricia Sheiner and Michael Silver and their three young children loved their $2½ million dream house in New York's suburban Westchester County.

But they're not living the dream anymore. The family put the 7,000-square-foot home up for sale and moved to a smaller house in December to save on their mortgage payment, utilities and taxes. Now, it's an albatross they can't sell despite dropping the price.

"We bought our other house feeling our other house would sell quickly," Patricia Sheiner said. "And then the market suddenly died. It died."

"It's tough on a daily basis," Michael Sheiner said.

"It's a hardship for anybody to pay two mortgages," Patricia added.

They didn't believe one of the hottest real estate markets in the country would cool off so quickly.

"I'm completely blown away," he said.

"We're totally surprised," she added. "It's a really beautiful house."

Drive around almost any wealthy suburb these days and you'll see a lot of very big houses, so-called "McMansions," under construction everywhere. In fact, in the last 50 years, the average size of new American homes has more than doubled from 983 square feet to 2,434 square feet, according to the National Association of Home Builders.

But the once red-hot housing market has cooled off and the big homes are starting to give a lot of people some serious headaches.

In almost every region of the country, rising interest rates have made big houses hard to sell. Over the last year, interest rates on 30-year fixed mortgages have risen more than a full percent. So for every $100,000 borrowed, that's an extra $80 a month.

It's the worst market in a decade.

"A year and a half ago I could list it, hit enter and I'd have three showings within ten to fifteen minutes," said J.P. Endres, president of the Westchester Board of Realtors. "Now I hit enter and I wait."

There is one bright spot in the real estate market. With big houses now out of the reach of many buyers, there is a growing demand for small homes.