Most people would prefer to live in a newly built home rather than a pre-owned home. In fact, 60% of buyers prefer a newly-built home, according to a survey done by the National Association of Home Builders (NAHB).
Breaking that study down even further, we can see which age groups desired a new property the most. Here is what Rose Quint, Vice President of survey research for the NAHB, says on the subject: “Gen X buyers are the most likely to prefer a newly-built home (68 percent), ahead of both Millennials (65 percent) and Baby Boomers (55 percent)”.
While a new construction home may seem like a better option without a doubt, there are advantages to purchasing an older home as well. When a buyer is weighing these two options, here are the most important factors that impact their decision:
- Move-in Date
- Lifestyle and location
- Stage of life
What to expect from a New Construction Home
Never Occupied. Nobody has ever lived in the house, so there isn’t much need to worry about a previous owner damaging the walls, cracking a tile, or staining the carpet.
Builder To Buyer. People who buy new construction homes will be purchasing directly from the builder of the property, as opposed to buying from someone who is not constantly emerged in the real estate industry. Being assisted by a REALTOR is still strongly encouraged in new construction transactions, but not always necessary.
Home Warranty. Most builders will offer a home warranty as a way to show consumers that they are confident in their work. Hopefully a buyer will never need to use that warranty, but in the event there is an issue with something that is covered by the warranty, they will be glad they got it. A typical home warranty will be for a 1-year period.
Pros of a Newly Built Home
- Everything is new! This is the biggest advantage and the most apparent one. New plumbing, new electrical, new fixtures, new floors, new everything. Maintenance is at the back of your mind when buying a new build.
- Modern Code. Everything in the property being new also means one less-apparent advantage. Older properties were not built to meet the same specifications as homes that are built today are. Some of these specifications are to increase safety, make the home last longer, or keep it better insulated. New homes must be built to code, meaning that they will often have more safety features than a home built 50 years ago or so.
- Efficient. Modern homes are often technology driven to keep the home more efficient. Energy efficient appliances are also rather common in newly built homes. These things can help buyers save money and reduce their carbon footprint. This reduction in energy cost can be clear as day when compared to a home that was built 50+ years ago and has not had upgrades to increase the efficiency.
- Options. While you may not be able to customize the house like you would have in the past, there are still multiple ways buyers can customize the home before the builder completes it. Some things that buyers can often choose are paint colors, floor coverings, and fixtures.
Pros of a Pre-Owned Home
- Less expensive. The average cost of building a new house can range between $119,767 and $452,291, not including the land that will be needed. Recent spikes in material costs have caused the price of new construction homes to drastically rise. I personally have known a few people who were going to build their new home, and all but one have put that plan on pause because of the current price of building.
- Bigger lots. Though this is not guaranteed, the U.S. Census Bureau data in the American Housing Survey shows that the size of the lots these homes are built on has steadily declined since the 1960s. Though the homes themselves have steadily gotten bigger.
- Less options than before. Many are noticing that builders are trending away from making their homes very customizable, which may be unappealing to some buyers. This helps them be more efficient, but it can also cause some to feel like all of the newly built homes in a subdivision are very similar, or “cookie cutter”.
Types of New Construction
A custom built home is built specifically for the buyer. This option is best for those who want as much control over the process as possible and are detail oriented. While it is a great way to have a truly unique home, there are also some cons. Aside from price, there will be lots and lots of decision making, and some that are very time sensitive.
A spec home is built the way the builder wants, and gives very little input to the buyer. The good thing about these are that you know exactly what you are buying so you don’t have to imagine the finished product or hope it looks as good as you want. They are also more readily available than customized homes. On the flip side, they are often built with cheaper materials and the lack of customization may deter many.
This option is middle ground to the two prior types of builds. These homes are often partially done at time of purchase, and from that point forward, you may have options on some of the elements in the home, such as countertops, fixtures, carpet colors, or cabinet finishes. This is a great middle ground to the two as you are not as pressed for every detail about the property, but you do get to add your own personal touches to the home prior to it being finished.