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However, McMansions were popping up all over during the last bubble, even here in NM. A full third of them were sold to out of state speculators who kept them off the market and hoped to make a killing. A full quarter of new home sales here in 2005 were to Californians, alone. Those new neighborhoods slapped up practically overnight now look like the aftermath of a plague, so many houses now abandoned and deteriorating rapidly.
The profits never materialized here because builders were slapping up new housing so quickly the prices never had a chance to rise. Starter housing in my established neighborhood has kept its value. The McMansions have lost a great deal of theirs because nobody wants to heat or cool them now.
While it might make sense for a growing family to leverage equity and move up to larger housing, it never makes sense simply to move up to housing that reflects the lifestyle they think rock stars live and that they'd like to sample, themselves. That just never works and those were the first people to get hurt when the bubble popped.
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