Which is better: An existing home, or a new build?
There’s something so appealing about a new house: the smell of fresh paint, the unmarked floors, the appliances that still have plastic-wrapped warranty information inside.
But … there’s something so appealing about a lived-in house, a place that has proven it can weather a storm, maybe with gorgeous oak floors hidden under linoleum, rose bushes that come up to surprise you in the spring and character that can’t be bought.
Which one is right for you?
It’s a personal decision, but, like most real estate choices, driven by location and price. And, in this tight sellers market with a low inventory of houses for sale, by what’s available.
Rebecca Beers remembers looking for a new house as it became clear her family of four was growing out of their first house. Rebecca and her husband, Brett, knew they didn’t want to move out of Saratoga County, but there was nothing in their price range — under $400,000 — they liked. They decided to build in Milton and hired McPadden Builders.
“We took this route because the inventory wasn’t there and what we did find would have been a huge compromise,” Beers said. “If we were going to increase our mortgage payment, we wanted what we wanted, not what someone else wanted.”
Construction of the Beers’ four-bedroom, 2,364-square-foot house took six months, a reasonable time locally for new residential construction of that size. There were hurdles: the Beers sold their house in Saratoga Springs, moved into temporary housing, then moved again when their new home was complete. It was worth it, Beers said.
“It was exciting to walk into a fresh, clean slate and know it’s yours,” she said.
However, there are not nearly enough houses being built to stabilize the inventory slump.
Market data provided by the Greater Capital Association of Realtors continues to show a drop in pending and closed sales. In its latest report, GCAR summarized: “The lack of affordable inventory and the persistence of historically high housing prices continue to affect the housing market, leading to lower-than expected existing home sales at the national level.”
In other words, the lack of houses on the market is driving the price up all around and new construction is out of reach for many buyers.
“There’s a specific buyer for new construction: No requirement to sell a house, have at least 10 percent to put down and be more affluent because the price per square foot is going to be higher,” said Alex Monticello, who owns Monticello Real Estate and has been in the business for 10 years. “Plus, you pay up-front for upgrades, and no builder will build on a contingency — if you sell your house, then you can move forward.”
Real estate agent Jamie Mattison of 518 Realty, who has sold both new construction and existing homes, pointed to one of his current listings as an example of getting a better deal buying a resale versus new.
The house, at 1 Countryside Court in Glenville, is 4,056 square feet on a 4-acre lot and has five bedrooms and four bathrooms. The house was built in 2004, and according to county tax records is assessed at $557,000. It’s listed at $564,900.
Mattison estimates it would cost close to $850,000 to build the same house today because of building code changes that have increased construction expenses; a shortage of skilled workers; an increase in the cost of upgrades and the scarcity of big pieces of buildable land close to the area’s downtowns.
Cindy Quade, the owner of Signature One Realty Group and a real estate agent for 35 years, said a buyer’s timeline is an important factor after budget. In some cases, a builder will have a spec house ready for a buyer.
“There’s a lot of peace of mind that comes with a warranty,” Quade said.
New York state has what’s called a housing merchant implied warranty, which means the buyer and builder don’t have to draw one up for it to be in place. The warranty covers the construction, materials, appliances, systems, and building components of a home for one year.
Quade brought up other things to consider when buying new.
“Take into consideration how long you will be in the home; if it’s a large neighborhood and you won’t be there long, you might compete with the builder when you put the house on the market and the neighborhood isn’t built out yet,” Quade said.
Older homes, Quade said, usually have the benefit of their value growing over time.
Regardless of whether you choose to hire a builder or buy an existing house, do your research.
“Talk to at least three people who have had a house built by the builder and get feeback. Reputation is very important,” said Jay Christiana, owner of Berkshire Hathaway HomeServices Blake and president of GCAR. “Look at the details in other homes and check with the local homebuilders association.”