A study conducted by Trulia in 2014 showed that twice as many homebuyers prefer new homes to existing homes. If costs were the same, two in five Americans (41% of the population) would prefer a newly built or pre-construction home over an existing one.
Though there are many advantages of buying a shiny, brand new home, there are many factors to consider before ruling out older homes. In this blog, we’ll take a look at the pros and cons of new construction vs. existing homes.
Nashville is one of the top housing markets in the nation, especially when it comes to single-family new construction. For homebuyers that prefer a new home, their top reasons are usually: 1) modern features (e.g. open floor plan, bigger closets, new appliances); 2) the ability to customize a home; and 3) less money spent on maintenance and repairs. All these qualities are very desirable, but they sometimes lead to a price point that is up to 20% higher than similar existing homes in the same zip code. Although the majority of people say they desire a new home, a little less than half would actually pay the premium (Source: Trulia).
Working with a contractor to create a floor plan that works for your life is a big perk of buying a new home. Most likely the design will lean towards a modern feel and open floor plan that flows from one room to the next. Bedrooms in new construction homes are normally larger and have more spacious closets, bigger windows and more natural light. If you’re choosing a custom-built home, you may have your choice of color palate, upgrading finishes and using builder-grade materials. This will cost you more, but it will give you the ability to add your own personal touch. On the other hand, building your own custom home can take some time (the average time is five to six months), so make sure you can be flexible with your timeline.
Newer homes tend to be more energy-efficient than older existing homes. New appliances will use less energy, and windows and insulation will lead to lower heating and cooling bills. “Smart” technology will allow you to automate lights, security system, internet and more. Since everything is basically new, you’ll most likely spend a lot less time and money maintaining the home. Home warranties can protect your home for several years before you have to make any major repairs. This is music to a new homeowner’s ears!
Another major advantage of new construction is that these types of homes are usually part of planned communities and neighborhoods. Parks, playgrounds, pools, clubhouses, sidewalks and other community spaces are all possible amenities that may come along with your new home. On the flip side, you may find that these types of communities are outside of metro areas. If you work in the city, your commute may be longer. If you live in the city and are purchasing a new construction home, you’ll have a shorter commute but your smaller urban lot may have less green space or none at all.
One of the major reasons homebuyers choose an older home over a new construction home is because of the charm and traditional features it offers (e.g. original hardwood floors, ornate crown mouldings, woodwork and other details). Older homes often have higher quality and sturdier materials than new ones. If you are someone who enjoys construction projects and isn’t afraid to get your hands dirty, you may get more satisfaction out of buying an older home. On the other hand, you may find yourself constantly having to make repairs (beware of the money pit!).
As mentioned before, newer homes are often more expensive than older homes (up to 20% more). Where prices of newer homes tend to have less wiggle room, the prices of older existing homes may be negotiable. This, of course, depends on the market and time of year! Additionally, be prepared for the possibility that inspections may reveal issues, which could lead to a longer and costlier closing.
Trulia found that homebuyers are likely to mention an established neighborhood as another reason to choose an existing home. In contrast to a new, developing neighborhood, an older neighborhood may have a stronger sense of community. This combined with larger yards, mature trees and no HOA fees may be big advantages for a homebuyer.
When deciding whether to buy a new home or an existing home, it’s important to weigh the pros and cons. Though most people prefer a new home, there are some major advantages to buying an older home. Choosing a professional and experienced real estate agent, home inspector and lender will help make the process smoother and more enjoyable. Homebuyers who make their choice based on their lifestyle, needs and abilities will be much happier about their homebuying decision in the long run.
Please contact The Southbound Group with any questions. We are here to help you navigate the homebuying process!