New Home? or This Old House?

New Home PROS

·      Contemporary style

·      Some flexibility on design during construction phase

·      Cheaper to maintain (new appliances = fewer repairs)

·      Cheaper to operate (energy-efficient construction)

·      Extended warranties

·      Cohesive neighborhood (consistent layout, common areas)

·      Frequently have a homeowners association (helps protect resale value)

·      It's brand-new!

New Home CONS

·      Cookie-cutter design

·      Limited negotiating room on price

·      Potential for homeowners association dues

·      Frequently less character, or homogenous design

·      Frequently have a homeowners association (can put limits on how you use your property)

 Older Home/Re-Sale Home Pros

 

·      Availability: More choices, more styles to choose from

·      Price may be more negotiable

·      Track record: Known issues will be revealed in disclosure documents

·      Established neighborhood

·      Could contain more charm and character

Older Home/Re-Sale Home Cons

·      More maintenance: Things break or wear out

·      Less energy-efficient: More costly to operate

·      Dated design, older appliances and amenities

·      It's been lived in!

So whatever your preference, old or new, be sure to consider the way you like to live. If the house is for you, buy what you like. If you are a builder or an investor doing a fix-up, be sure to consider the aspects of your construction that most appeal to a potential buyer.

Want to see the latest in new construction in Seattle? Email me at HomeLandInvestment@gmail.com for a complete list with photos of newly-constructed and green-built homes in Seattle.

Happy Investing!

This blog post courtesy of Bernita McKinnion, Home Land Investment Properties.

Old vs New Construction

Is there a premium that buyers are willing to pay for new construction? And if so, what is it?

Taking a look again at the North Capitol hill area we have focused on all week, we find that the median home sales price in the 98102 zip code was $737,500 in the last year. This would be for a three-bedroom, 2.25 bath house with 1831 square feet of living space, for a sales price of $402.79/sf.

If we look at older construction, that is homes built before 1978, the median home with 2610 sf sold for $855,000 - or $327.59/sf.

The median new construction house built since 2004 in that same zip code sold for $693,900 for 1600sf of living space - or $433.69/sf.

So while buyers are willing to sacrifice space for newer construction, they are willing to pay a premium of 32% on the price per square foot for new.

And if we apply a 17% discount to the older homes located on a major arterial, like Harvard Avenue East, a house like the Lambert house would sell in today's market for around $813,000.

Pricing decisions are always complex, but this case study provides an example of how to calculate market values between old and new construction.

Happy Investing!