America's Modern Ghost Towns Take Shape

You might be shocked to discover that some of America's most expensive neighborhoods are slowly emptying out. In their new study, "ghost towns" are modern metro areas on the edge of decline due to decreasing population and increasing home and retail vacancies.

To create their list of America's modern-day ghost towns, Joybird analyzed data from the U.S. Census, Migration Patterns, and the National Association of Realtors (NAR), mapping this against population declines, migration outflows, drops in new building permits, and rising vacancy rates for the 100 largest U.S.

cities. A city loses its vibrancy due to a shrinking population, while high rental and homeowner vacancy rates equal empty properties.

It's happening right under our noses, and McMansions are at the center of this suburban decay.

The McMansion Phenomenon Backfires

Suburban McMansions, characterized by their large size and extravagant designs, are expected to lose value. These homes often come with high maintenance costs and energy inefficiencies.

Think about it like this: imagine buying a sports car that looks impressive but breaks down constantly and costs a fortune to repair. Younger buyers are increasingly prioritizing sustainability and practicality over sheer size.

With remote work becoming more prevalent, the need for commuting-oriented suburban homes has diminished. Notorious for their size and suburban locales, the cost of maintaining a McMansion is significant.

Buyers often face high utility bills, expensive landscape care, and costly maintenance fees.

Vacancy Rates Tell a Disturbing Story

The national rental vacancy rate is 6.9% as of the 4th quarter (Q4) of 2024, up 4.55% year-over-year (YoY). The suburban rental vacancy rate is 6.7%.

What's even more alarming is that The home of the Master's Golf Tournament has the fourth-highest rental vacancy rate (8.9%) of the cities studied, and a retail vacancy rate (5.9%) that's 34% higher than the list average. And that's not even including that 27% of Augusta's vacant homes have been empty for two years or more.

The third most likely ghost town is St. Louis.

At 6% retail vacancy rate, the Gateway to the West is 35% higher than the study's average. The town had the second-worst population decline between 2020 and 2023 (-6.6%), which might explain why new building permits between 2022 and 2023 decreased by 22%.

The High Cost of McMansion Ownership

Living in a McMansion is like trying to heat a cathedral with a match. Another added expense is the possible need to commute from the remote, suburban location to the city center.

Due to this demographic, which is more susceptible to boom and bust economic cycles, prices of McMansions tend to be much more volatile and are often fueled by speculation. Additionally, environmental concerns push buyers towards smaller, more efficient living spaces.

The societal shift toward minimalism and financial prudence further undermines the appeal of these oversized properties. Many owners are discovering that what once symbolized success has become a financial burden they can't escape.

Young Buyers Reject the McMansion Dream

McMansions, with their spacious floorplans and boxy architecture, are seen by many young people as a symbol of pre-recession housing excess, Business Insider reports. After the market collapsed, photos of vacant, dilapidated McMansions became something of the face of the housing crisis, according to the publication.

For many, they represent a shift in how Americans have come to think of their homes, from a space they would inhabit for life to one they could use to show off their economic success. The amount Americans are spending on McMansions has declined significantly in 85 of 100 U.S.

markets, according to Bloomberg. The effect is that older homeowners can't sell their homes, and younger buyers can't find a home to buy, according to Realtor.com.

The Financial Nightmare Unfolds

Because of the 2007 housing crisis, the McMansion lifestyle equated to living beyond one's means. Many homebuyers took out mortgages to buy these McMansions, but they were subprime mortgages, which were seen as an underlying cause of the 2008 recession.

Many people lost their homes, and others saw the value of their homes drop below the original loan amount because of the subprime mortgage. In some cases, borrowers were better off defaulting on their underwater mortgage loans rather than paying more for a home that had dropped so precipitously in value.

What was meant to be a lavish, multibillion-dollar development soon turned into a nightmare for the people who chose to buy homes at the proposed Indian Ridge Resort Community, now known as the McMansion Ghost Town. Plans for the ultra-exclusive community in Branson West, Missouri were announced in 2006 and the project was set to cost $1.6 billion (£1.3bn) to complete.

Yet, sadly for those who invested in the project, the community would never come to fruition. The financial crisis hit, bank loans were defaulted on and construction work came to a swift halt.

Only 13 homes were started and 15 years later, the 900-acre development was still not finished. As such, McMansions face a challenging future in the housing market.

The dream of suburban luxury has turned into a waking nightmare, leaving communities scattered with oversized monuments to excess that nobody wants to buy or maintain. These aren't just houses losing value—they're entire neighborhoods slowly dying, creating modern ghost towns where American dreams once flourished.