By Chad Taylor
Question: I can’t decide between building a new home or purchasing an old one. What are the pros and cons of new construction vs. resale?
Like most things in real estate, this is a subjective question.
As usual, I will start with the facts. In June 2013, 100 new construction homes closed in Johnson County. That is down 16 percent from the same month last year when 119 new homes closed. When we look at the year-to-date numbers, we get a better perspective of where I feel new construction is headed. Year to date new construction sales are up 18 percent. That number would be higher, but you have to take into consideration that many of the homes that were started in January are still two months out from completion, depending upon the size and finish quality of the home. So there is a slight lag before the statistics will read true. I will be interested to see the numbers in December.
The important message is that new construction sales are up and that is one of the final signs of a true housing recovery.
Now let’s look at resale. In June 2013, 1,037 resale homes closed in Johnson County. Unlike new construction, that is an increase from June 2012 of 18 percent. Again, the resale market can show correction more quickly because you are not waiting on the home to be built, just sold. Year-to-date, resale sales are up 14 percent.
As you can see, both markets are seeing significant improvement and can be a smart investment in today’s market.
As a buyer’s representative, our goal today is to give you some food for thought when considering whether to make a resale or new construction purchase. Here are a few thoughts.
New construction benefits:
- The home is brand new! You will be the first to live in it, therefore, you don’t have to repair the home or correct someone’s personal decor or remodeling choices.
- If you purchase the home early enough in the process, you will possibly have control over the finishes of the kitchen, baths, etc…
- The builder will address/repair almost all imperfections before you take possession.
- Spacious kitchen, luxurious bathrooms, walk-in closets, and main level or bedroom level laundry-just to name a few.
- Open floor plans
- Builder’s warranty for the first year of ownership
- Brand new HVAC, plumbing, electrical, etc.
- Possibly more neighborhood amenities like walking trails, pools, tennis courts, etc…
- In a healthy market, the price is what it is. Good builders have buyer’s lined up to buy their homes. It doesn’t feel like much fun when you are buying the home, but this does add a level of protection to property values in the neighborhood.
- Established neighborhood which can protect property values more than a newly developed neighborhood.
- Structurally, most homes have done all of the settling that they will do in the first 10 years after it is built.
- Most resale properties will come with all window treatments in place, unlike new construction.
- Mature trees and landscaping.
- Most remodeling done by the previous owner was done for their own enjoyment rather than for resale. So the quality can be higher because a home owner is willing to spend a little more rather than watching every penny.
- Charm and character of an older home.
- A home that was built in the 50’s that sells for 200K today is on average built better than any 200K new construction home that you can find.
- Price can be negotiable depending on market conditions and seller motivation. This can be great when you are buying a resale home, but a desperate seller can have a negative impact on property values as well.
At the end of the day, it really comes down to a buyer’s lifestyle and what is most important to them. We have some clients who cannot imagine living south of I-435 because they prefer the older neighborhoods and prefer to be 15 minutes from the Plaza and downtown. Conversely, we have clients who have lived in an older home and are over it. Proximity to downtown and the Plaza does not take priority over the desire for “new-ness”. Both buyers will be happy with the end result as long as they are true to themselves and can clearly identify their priorities.
Isn’t it great to have options?
This weekly sponsored column is written by Chad Taylor of the Taylor-Made Team and Keller Williams Realty Key Partners, LLC. The Taylor-Made Team consistently performs in the top 3 percent of Realtors in the Heartland MLS. Please submit follow-up questions in the comments section or via email. You can find out more about the Taylor-Made Team on its website. And always feel free to call at 913-825-7540.