The Value of New Home Construction
Does new home construction offer better value than a resale? Some buyers that want to save money turn to resales thinking they provide the best value, but that isn’t always the case. In many ways, a new home offers more value up front and in the long-run.
New Homes Won’t Necessarily Cost More
Just because a home is newly built doesn’t mean it will immediately cost more than resales. A rundown of averages last year on BuilderOnline.com showed that on a whole new homes were more expensive than existing homes. But there were a few caveats. For starters, newly built homes averaged 2,600 square feet. The selection of existing homes in that size can be very slim in some areas.
The second caveat was that, as the contributor noted, home builders were focused primarily on a higher price point at the time. However, in the last 12 months, there’s been a renewed focus on building homes that are more affordable and closer to the $250,000 range, which should bring the price of new homes more in line with resales this year.
Depending on the location, resale homes can actually have a much higher price tag than homes in a new community. This is almost always the case for resale homes that are near the city center in neighborhoods that have been established for decades compared to new homes in the suburbs.
A residual value-add of new construction is less maintenance and no need for updates anytime soon. To maintain the value of a resale significant maintenance may be needed, sometimes right from the onset of ownership.
As long as you do basic maintenance, a new home will stay in good condition and hold its value. New homes can also come with warranties that protect the value of the home.
Better Energy Efficiency Provides Monthly Value
New homes also tend to be far more energy efficient compared to older homes, which offers value to the homeowner. The savings add up month after month, and the energy efficient systems themselves can increase the value of the home.
Buying Early in a New Community Can Increase Appreciation
Being among the first to buy into a new development can be risky, but there can also be rewards. When you buy in the first half of development (50% or fewer homes completed) you’ll have a better choice of lots, which can have a significant impact on value. You may also get introductory pricing. If the community ends up being very popular don’t be surprised if the price you pay in the early phases is much less than those who waited until the community was almost built out.
Community Amenities Give New Homes Value
One distinct difference between new construction today and neighborhoods with homes that are several decades old is community amenities. Some new communities offer residents access to pools, clubhouses, sports fields, and hiking trails. These amenities are part of the value you get from living in that new home.
Value Depends on the Type of New Home You Buy
There are three types of new home construction: custom, production and tract homes. In terms of options and value to your unique lifestyle, production homes are the sweet spot. Tract homes are often offered at a lower price point, but floor plans and options can be limited. Completely custom homes can be extremely pricey and are so individualized they may only appeal to a small percentage of people.
Production homes fall into a middle ground where you typically get good quality for the price, and they’re unique enough to avoid being valued the same as every other house in the neighborhood.
Being the First Owner – Priceless
To some home buyers, new home construction offers value that transcends a dollar amount. The fact that it’s a new home no one else has ever lived in is a big value booster. No one else has left their mark or left behind maintenance issues to worry about. It’s a home that your family can truly make your own because it was designed for you, by you.
If you see the value in new home construction, then you’ll understand the benefits that myHouseby offers during the build process. Use our marketplace to find new communities that have amenities and home plans that fit your lifestyle.