New Builds vs Existing Homes
All buyers have unique needs, and as your trusted advisors, we are here to help you review and make the best decisions to reach your real estate goals.
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We’ve been receiving a lot of questions on new builds, and when we are moving about more freely again, we have an interview planned to help answer some of your building questions, but let’s discuss a question we are frequently being asked. Are new homes worth more money? Currently, there is a premium on buying or building a brand new home. In the past, New and resale homes were priced about the same. In 2004, there was almost no difference between the 2 in terms of pricing, from 2009 through today the prices have diverged. During the economic collapse, this was due to existing homes being undervalued with more inventory than buyers. Homebuilders needed a solution so their homes wouldn’t be worth less on the market than the cost to actually build them. Builders gravitated to building larger homes with larger margins to overcome this problem; the trend has continued, leading to our current market of having very low inventory for first-time buyers. What could this mean for the future when you are selling a new build? Let’s review… Builders aren’t incorporating as many energy-efficient options as they could, so in reality, the homes are not that much different than homes that are 15 to 20 years old. However, new builds could be viewed as an opportunity to increase our inventory and Industry associations like the BIA are working with builders to try and help them provide a wider range of options to increase inventory to open enough housing for our market demand.
New homes can have emotional appeal along with some more tangible benefits; let’s review a few pros and cons for both.
Negatives with a new home.
1. Homes are currently being built on smaller lots, bc builders seek to increase profits by putting more homes into a community.
2. Larger homes are being built with tandem garages for 3 cars vs true 3 car wide garages found in older homes.
3. You may need to spend additional money on items from window treatments to patios or decks for outside space, possibly finishing some lower-level space.
4. Depending on the builder and type of build, you will be waiting 6-12 months, or longer, to move into your new home
Pros of a new home.
1. Starting out in a completely new home with a new roof, new furnace & AC, and new windows, often with warranties on the various components.
2. Move-in with no projects to bring the home on-trend, and the homes surrounding you will all be quite similar in features and condition, vs a neighborhood in transition of being updated.
3. If you can custom or semi-custom build, you can get the spaces built exactly as you need, but even when building with a track builder, the homes are designed with current living trends in mind.
Cons of Existing homes
1. Homes may need some upgrading, like new HVAC or Windows.
2. Homes may need some remodeling or cosmetic updates to be more on-trend.
3. There could be unknown costs that could get expensive…depending on the age of the home and past updates by former owners, the home may need some larger-scale projects to support today’s lifestyle and electronics needs.
Pros existing homes
1. Often you will find larger lots, more matures communities with trees & landscaping in place.
2. Location, location, location… existing homes may be closer to city centers and amenities, as builders continue to move further out to find land for development
3. Often you find upgrades that you won’t have to pay a premium for, like a finished lower-level, or patio or deck already completed.
4. You can move in much more quickly, usually within 30 to 45 days.
We love to help our clients with both processes. Our only concern with a new build is the premium price right now, and only time will tell where the market goes. Just consider in 7-15 years when it is time to sell, the “new” home, it will have seen some changes in the trends and probably need updates, just as one that currently 15 to 25 years old. There will always be a need for new homes and for the selling of existing homes, think new car buyers and used car buyers. We are just sharing some thoughts for you to consider as you decide where to focus your search for your next home.
We love helping our clients build their new homes, it can be a fun and rewarding process when you are ready to build exactly what you want. We also love helping our clients buy existing homes and making them perfect for their needs—we have seen some amazing transformations as our clients make a home their own. Everyone’s needs are unique and AS your trusted advisors, we are here to help you review your current needs and work through the decision-making process to develop a plan that will help you reach your real estate goals.
Please reach out to us anytime, we are here to help you. We look forward to meeting you soon!
