The housing market has shown significant improvement over the course of the last year; new construction sales are up as well as resale sales, and both can be smart investments. As we transition into a seller’s market, there are many options to choose from. However, it can cause some strain when debating whether a resale or new home purchase is right for you. Before you make a decision, consider the pros and cons of each in the list we provide below.
The Pros of a New Home
▪ Having something that is brand new and never lived in is a great feeling. You truly feel as though it is your own.
▪ Because you are the first to live in your new home, there will be no repairs needed when you move in. The builder will address and repair almost all imperfections before you take possession.
▪ You don’t have to worry about remodeling the unfortunate personal decor choices of a previous owner.
▪ Purchasing a new home early on in the process grants you the freedom of selecting finishes that fit your personal taste, such as the color of the granite in the kitchen and bathroom tile.
▪ There are usually many modern amenities that come standard in a new home such as spacious kitchens with islands, luxurious bathrooms, walk-in closets, and open floor plans.
▪ You will have the peace of mind of a builder’s warranty for the first year of ownership that will cover many repairs.
▪ To add a practical aspect, you will have brand new HVAC, plumbing, and electrical wiring that won’t require maintenance for long while.
▪ There will likely be neighborhood amenities like walking trails, pools, and community centers.
▪ Builders tend to offer plenty of incentives to buyers interested in a new home such as buyer incentives, closing costs, and extra upgrades.
The Cons of a New Home
▪ New homes are typically more expensive than resale homes because they are built from the ground up and are semi-custom.
▪ New homebuyers must anticipate owning the home longer than buyers of resale homes because of differences in the rate of price appreciation. In a new home community, if you need to sell within a year or two, you are competing against other homes that are still being built and can be customized.
The Pros of a Resale Home
▪ Resale homebuyers prefer the satisfaction and protection of an established neighborhood. Buyers can compare how homes have held their value over the course of many years.
▪ Older homes often come with mature trees and landscaped yards.
▪ Older homes have charm and character.
▪ Prices are negotiable depending on market conditions and seller motivation.
▪ Buyers willing to purchase a fixer-upper can easily increase the value of their property.
The Cons of a Resale Home
▪ You will likely need to repair and redecorate before you move in as well as during your first few months living in the home. More repairs will be needed for fixer uppers.
▪ Older HVAC, plumbing, and electrical wiring will require more frequent maintenance.
▪ Personalized customizations are not an early option and must be done through a third party with more expensive out of pocket costs.
▪ Modernizing the home will be expensive and likely set you over budget.
▪ There are less incentive offers available.
▪ No builder’s warranty means the cost of repairs during the first year falls on you.
Long Term Value and the Bottom Line
For most homebuyers today, the biggest concern is whether the property will hold its value. In 10 years, a new home purchased today is likely to have more value simply because it meets today’s standards. A new community will have newer amenities, too, including newer schools, pools, activity centers, and shopping areas.
But location and maintenance are also factors in long-term value. New home neighborhoods can be found in great locations all across Augusta, GA and Aiken, SC in close proximity to large employers, shopping, and entertainment. In addition, new neighborhoods often have dedicated Home Owners Associations who work hard to maintain the value of the homes in their community.
The bottom line is if you want a home that will hold value over the next 10 years and are planning on living in it for at least five, if you enjoy upgrades and adding customizations, then a new home is the way to go.
Although they are traditionally more expensive, when you consider the extra out of pocket cost you would need to spend on modernizing a resale home, repairing it, customizing it, and maintaining it, the costs come out about equal. A new home might even be less expensive in the long run, and involve much less hassle.