Investment propertyFour Major Reasons To Buy a New Home Over a Resale Home
Anything new usually carries the buzzwords "cutting edge", "latest
technology", "best design yet", and "ground floor opportunity". Used seems to
connote "established", "mature", "time-tested", and the impression that buying
something with previous experience evokes the adage "they don"t make "em like
they used to".
But how does this apply to homes? Real estate industry experts may disagree,
but either camp can convincingly make its point. Home building, however, is a
part of our way of life that can stir up the very essence of what makes up the
American dream. It"s the pioneers with their homesteads; the immigrants and
"squatters" cutting out a part of the forest with fresh logs to house their
families. It"s the "Go west, young man" mentality that helped to create a
nation teeming with innovation and pride in its newness.
If a builder were writing this article, the reasons he may cite to buy a new
home instead of a re-sale would literally spill off the page and fill up a
book. I will cite only a few, but substantial ones here, in hopes it creates
"food for thought" for those home buyers that are literally up for grabs and
are trying to decide whether to buy a new or used.
APPRECIATION
Residential real estate experiences a life of its own, similar to the growth
of an individual, many experts agree. The first seven or eight years are
usually its "formative" years, where the most appreciation can occur. It is
during this time that the new home can have the most appeal, and grow with its
surrounding area and economy. The second stage may be referred to as the
"maturation" period. This can extend into year 16 or so, and may find the now
"not so new" home stabilizing in terms of appreciation. This is when
depreciation begins to add to the equation. The home"s features and trappings
can begin to look "dated" and some items may need to be replaced, such as
roofing, flooring, carpeting, etc. Keeping up with these items as the years
go by may very well help buyers hang on to a good chunk of the original
appreciation from its first few years. However, one or two buyers willing to
invest in updating their homes in a given neighborhood may not be enough to convince an appraiser that the entire neighborhood is as concerned with keeping the values up.
Years 16-35 are sometimes referred to as the period of "built-in
obsolescence". By now new home builders have so significantly changed
features, energy efficiency, and floor plans to suit the buying public"s
emerging lifestyles that a major re-model of an aging home may need to take
place, should the occupants be interested in getting top dollar for their
home. Appreciation becomes an issue primarily when selling or refinancing a
home. Neither of these issues may be of significant importance to those
wishing to stay put through retirement, have a tolerable interest rate for their home loan, or own their homes outright. Without a crystal ball,
however, it is difficult to tell when homeowners may need to sell, accept
employment relocation opportunities, or decide to downscale as their families
grow up and move out. This is why homeowners tend to remain concerned with
their investments in terms of value and future value.
WARRANTY
New homes carry better and better new home warranties as products improve and
builders feel increasingly confident in them. The first two years of a new
home warranty may cover almost everything from appliances to carpeting, to
heating and air conditioning systems (heavier on the first year) and the first
ten years usually carries a required ten-year structural clause. Structural
problems in a house can be the source of a myriad of problems, but I prefer to
liken the idea of a structural problem to a picture one can conjure up fairly
easily. Imagine you are standing at your kitchen sink, and one foot literally
feels to be on higher ground than the other. Looking down, you see a ridge in
your vinyl as if an earthquake may have happened under foot. This is a
structural problem. It can be caused by a number of reasons, ranging from
erosion of the grading of your property, to the shifting of cobble beneath the
structure. A concrete slab whose curing process may not have been up to snuff
may require the builder to hold its concrete sub-contractors feet to the fire
to repair the slab if it is within its warranty period. (Raised sub-floor
carries some different issues) Dealing with it, as most would agree, can be a
nightmare. When a home is past its first decade or so and has changed
occupants several times, recourse to address problems such as this is
difficult to pursue, and you may literally be out thousands of dollars when
all is said and done to fix it. Although real estate laws have been
progressively designed to protect the consumer, with disclosures abounding in
real estate contracts throughout the country, "caveat emptor" (let the buyer
beware) remains inherently implied in buying real estate. The new home buyer
is simply more informed about his new home community and structure because of
the amount of disclosure builders are required to supply, that there may
indeed be lessened risk-taking in buying a new home.
BETTER PRODUCT
Up to date technology in construction, more and more timely inspections
required by city and county entities, and features that reflect consumers"
changing needs are showcased in new home construction. Builders want
protection from defect litigation by enlisting suppliers who help eliminate
warranty work in general.
Requirements to increase energy efficiency by local utility companies
literally force builders to find new and better ways to lower your utility
bills and save the environment at the same time. Many new homes are now
equipped with dual-paned "low-E squared" glass, likened to putting sunglasses
on a new home, providing more energy efficiency and less fading to furniture,
cabinetry and carpeting in brutal sun-exposure areas. The newer vinyl frames
are less prone to leakage from moisture and air, provide more noise abatement
for the home"s occupants, and even glide more easily than aluminum or wood
frames. Innovations such as these in new home construction can contribute to
a lower budget for utilities, less frequent home repairs, and more peace of
mind in the long run. Innovations in insulation, trusses, and dwelling
integrity continue to be showcased at major builder conferences nationwide,
adding to the appeal and quality going into new homes.
YOUR PRIDE OF OWNERSHIP
It"s new and it"s yours and no one else has ever laid claim to it. A new home
is primarily an expression of its first owners. Options to the floor plan,
colors and materials chosen to decorate it, and even the excitement you feel
during your walkthrough with the builder, make up a snapshot of you and you
alone. No one else"s cooking smells, cigarette smoke, or family squabbles
ever took place in your new home. The pride you take in fine-tuning your
home"s trappings and landscaping the first few years adds to its character and
fills up your photo albums. The neighborhood is filled with people reflecting
much of the same pride and concerns for the future of the neighborhood that
you have. A natural commonality created by everyone being literally in the
same boat at the same time (putting in their backyards, pools, or enhancing
their new homes) breeds a rapport unlike established neighborhoods. This is
your history and of those around you, creating your own homesteads and taking
pride in either your beginnings or your accomplishments. It is a place where
Thanksgiving dinners, new babies, the eventual empty nest, and family memories
are happening for the first time.
Buying a home is, of course, a very individual and very emotional decision for
most people. Whether to buy new or used will continue to be a topic of
discussion for perpetuity, and there hasn"t been a better time to buy in the
past decade than right now. Interest rates are enticingly low, a robust
economy, not relying on shaky ground for recovery from past mistakes, and
consumer confidence all add to a good feeling about the future, in many
buyers" estimations.
In the building industry, however, most professionals will smile when asked
why to buy a new home instead of one with previous experience. "Well,"
they"ll smugly reply, "because it"s new!"