Charm vs. New

Personally, I am an old house kind of guy. I love the charm, the variety, the quality, & the quirks many older homes have to offer. For many good reasons, not everyone is even remotely like this. According to THE 2005 GREATER LOUISVILLE ASSOCIATION OF REALTORS PROFILE OF HOME BUYERS & SELLERS, 28% of respondents who purchased a home in 2004 bought a new one. In my view, new construction offers modern (open) floor plans, better use of square footage, and piece of mind. Having said that, the problem I see with new construction is a lack of charm. In order to get high quality materials from a new home purchase, expect to pay a lot. Mass produced new construction usually includes allowances for "upgrades" such as hardwood floors, ceramic tile bath floors/wainscotting, & woodwork like crown molding. New construction "upgrades" are standard fare in many older homes.

The flipside of the charm coin is that obviously, older homes are, well, old. Efficency is a typical sacrifice for old home buyers, and be prepared to spend either money or sweat in refurbishing the charm of older materials. Questions often arise with regard to decisions on whether to replace a cracked tile floor with a more resillient (and less expensive) floor covering or to replace the original double hung wood windows with vinyl thermal panes windows. The debate is endless regarding these decisions. My best advice is to look deeply at what you want to accomplish by the improvement & how long you plan to stay.

Many buyers want new construction for the piece of mind it can offer, however, it's important to seek feedback from builders' customers as to whether or not their "new" home is performing up to expectations. I've found many new home buyers to be more than willing to share their satisfaction--or disgust--with their particular builder.

It is common to assume that real estate always increases in value, however, that assumption can prove fatal when the boss decides to relocate an employee who, within the last six to twelve months, purchased a home and now must scramble to break even. Such a situation can force the buyer-turned-seller to take a loss. This risk is typically higher for purchasers of new construction in an area where building is ongoing. The logic is simple: Why would a buyer spend more on a resale home in an area where he/she can buy brand new for less? It's important to consider how far along the development in the area is, and to keep an eye on new construction pricing. A builder with an eye for the future will increase his/her costs for new homes periodically, thus building in some measure of appreciation during the completion of the project. However, for example, if a builder decides to continue to offer new homes at the same price over the course of a two year project, resales will not realize much, if any, growth. In some areas, this scenario is not applicable, however, in a vast majority of markets, an eye for the future should outweigh the quest to buy new.

Please feel free to email me with any questions.