Rumors swirling around the real estate market could lead you to believe that the new construction home market is leveling off. It’s not. Even with lumber and labor shortages, the industry saw a 23% increase in approved permits for private properties, and 2022 points to an even better year for new home construction. If you find yourself asking “Is new construction a good investment?” we’re happy to guide you through the decision-making process. Keep reading for a list of helpful questions to find out if buying a new construction home vs existing home is right for you.
#1: How Long Will You Stay In Your New Construction Home?
When making the choice between buying a new construction home vs existing home, it’s best to consider your length of stay. If you are planning to stay in a home for less than two years, you may find that purchasing an existing property is more cost-efficient when you’re ready to resell in a short period of time. Do new construction homes lose value? Not in the long run. Since average first-time home buyers tend to stay put for 11 years, when researching whether buying a new construction home vs existing home is right for you, you’ll find that it’s more likely you will earn equity in your new construction home value when you sell after five years.
#2: Do You Want To Save On Your Energy Bill and Usage?
Buying a new construction home vs existing home is a better option for the environment and your wallet. Purchasing an older home could potentially expose you to asbestos, walls with lead paint, and mold that is hazardous to you and the environment. Existing homes may also have outdated appliances and energy systems that use more energy than necessary. Modern homes, on the other hand, come with newer features that keep your environment safe, and can provide thousands of dollars in energy savings. We often get asked “Do new construction homes lose value?” to which we answer with the long-term savings estimates that new energy-efficient systems provide for buyers. For example, purchasing an energy-efficient water pump may cost $700 more than a standard pump, but could save you $3500 within the product’s lifetime. If you’re still wondering if energy-efficient appliances save you money in the long run, then you’d be happy to know that home buyers would be more willing to shell out over $8,728 to offset the cost of their utility bills.
#3: Do You Prefer Fewer Repairs/Less Maintenance with a New Home?
Still unsure if new construction homes maintain their value? Consider how much money you save when there is no need for constant repairs in your new pad. Repairing your gutters, refrigerator, garage door, and even replacing your sump pump are substantial expenses that can add to your monthly cost. Having to replace your roof alone could cost you an extra $2500 when buying a previously owned property. As with homes of any age, a new construction home does require regular maintenance, however, there are fewer repairs needed in the long run. For this reason, the answer to “Is new construction a good investment?” is yes! Replacing necessary household items could seriously drain your funds and create more stress along the way.
#4: Do You Want to Be The First or Last To Buy?
When you’re looking to score a deal on a new construction home, being the first or the last to buy can position you to walk away with a bargain. Being one of the first buyers could save you money, as developers may reward you with the lot of your choice or design upgrades at no additional cost in addition to builders’ incentives for early buyers. Buying the final home in a new development delivers a two-fold benefit for the buyer. When you’re one of the last few to purchase a new property, you have a better sense of the future neighborhood’s culture, schools, and job opportunities. Builders may also be more interested in cutting a deal on the final homes, which could pose a substantial gain when buying last.
#5: How Important is the Lifestyle of Your New Neighborhood?
Moving into your new home welcomes you into a brand new neighborhood. When evaluating the area you plan to move to, consider how well the nearby schools are performing, if the local shops and restaurants are thriving, and if nearby recreation centers are growing. These are telltale signs that indicate how much growth should be expected in the neighborhood. Other important measures of a neighborhood’s lifestyle are the community’s crime rate, the job market (which can be indicative of nearby hospitals, airports, or manufacturing centers), and even the walkability of the community. You can find neighborhood lifestyle information on each of Brock Built’s neighborhood pages. If you find yourself wanting to avoid rush hour traffic to go to the gym, and would rather walk to your pool, then a new construction home’s neighborhood amenities may provide these features. Again, when asked “Do new construction homes lose value?” the answer is no when it comes to value that community amenities like resident-only swimming pools, clubhouses, parks, and fitness facilities provide.
#6: Do You Want to Customize Your Brand New Construction Home?
Choosing the flooring, countertops, wall colors, and appliances are all customizable options when it comes to buying a brand new construction home. What’s great about personalizing your new home is that you have full control over your home’s aesthetic within your preferences. Anything from having a matte black door, to having a built-in wet bar, or adding an elevated ceiling fan can bring a creative flair to your new home. Not to mention, when buying a new construction home vs existing home, you’ll avoid the renovation process, which will save time and money. If your lifestyle requires additional features in your home for maneuvering, then customizing your construction home from the ground up is very important. You could have the freedom to include necessary accessibility options such as an indoor elevator, an outdoor wheelchair lift, or even a seated bathtub to ensure your home best suits your needs. Is new construction a good investment for you? We know that this can be a stressful time for you as you make a decision on your choice of home, which is why we included this relevant guide for you. Should you need additional support during this time, please refer to more information below:
Is New Construction a Good Investment?
A new construction home is a smart investment that is showing signs of market appreciation. June of 2021 saw 1.6M permits approved for new private properties and a 23.3% increase from the year before. 2022 will be a solid year for new construction as the real estate market continues to nurture an environment that builds equity in homeownership faster than ever before.
Why Should You Never Buy a New Build?
If you find yourself wondering if buying a new construction home vs existing home is right for you, consider the following:
- Timeline. You shouldn’t rush building a new construction home as there are often expected delays. Never prematurely move out of your existing property and underestimate building time, as there could be labor and building delays.
- Budget. Be mindful of your budget with regard to personalization costs and property taxes. While it’s challenging to estimate the final cost of your completed new build, we would like to help you sort out this process when the time comes.
Is it Cheaper to Buy a New Construction Home?
Buying a new home provides savings on daily living expenses as energy-efficient appliances, whole house systems, and modern building practices can lower your energy bill. Ultimately, buying a new construction home is an investment that can build equity and return monetary value in the future by cutting down on utility bills, maintenance costs, and installations.
Is it Better to Build a New Home or Buy an Existing Home?
The decision to build a new home or an existing home depends on how long you’ll be staying in the home, how much you’re willing to pay either now or in the future, and how much you’d like to customize the home. For those who want a faster move-in timeline, don’t mind the inevitable household repairs, have no interest in customization, and are ready to bid for their home, then an existing property would be the better choice. If you’re planning to stay in your home for more than a few years, don’t want the hassle of household items breaking down, anticipate a booming neighborhood with great job prospects, and savings on your energy bill, then a new home would be a perfect fit.
Do New Builds Go Up in Value?
After a short time in your new build, the equity you have in your home will begin to increase steadily. The quality of the building materials, the attractiveness of the neighborhood amenities, and a safe, bustling local lifestyle will increase your home’s value for prospective buyers.
We can promise you this: buying a new home doesn’t have to be as hard as it sounds. Even with all the noise and the real estate rumors, we believe that following well-informed tips can best prepare you for this process. Brock Built is happy to walk you through your home buying journey and alleviate any stress you encounter along the way. Our unmatched quality, craftsmanship, and exceptional customer service have served hopeful home buyers for over 30 years, and we’re happy to support others in this transition. For additional information on the home buying process, we can happily guide you in a way that considers your timeline and unique home buying needs.