What are the issues when considering new construction versus resale homes? First of all, new homes are NEW. Wow, that was profound. I'll bet you idn't expect such pertinent information. But what all does “new” mean? It means the comfort of knowing appliances have warranties, the systems have warranties and the structure has warranties. Does it mean that the construction is higher quality than resales? It could, but not necessarily.
A lot depends on the builder and the materials used, whether the builder simply met building codes are whether the builder went the extra mile that constitutes quality construction. An example is exterior finish – is the siding applied using the best practices for residential construction to prevent water damage or is it applied to meet building inspection codes?
The same goes for roofing, electrical, flooring, etc. There are best practices in the construction industry and there is mass production using the least expensive methods to pass inspections.
When building new it's important to consult with someone who can give you assurances the builder uses best practices and the construction is quality. Sometimes the sparkle of new can hide subpar construction, and later, after warrantees have expired, you are left dealing with the inferior work, or you are left running down the builder to repair defects still under warranty.
When you go to sell the home that has been constructed poorly the defects can keep you from getting top dollar for your home, or cause you to have to “fix” the defects in order to get to closing.
Having said all this, new construction can be a very wise choice – if you choose the right builder and if you act now in this housing slow-down period while builders are willing to negotiate concessions in order to sell their excess inventory.
Another consideration when buying new is the ever-important factor of location. A new home built in an undesirable location can come back to haunt you later. Why would a builder build in such an area? One reason is the price of land may be lower. Another is that the builder chose an area poorly not really understanding or misunuderstanding the area-changes taking place. Speculation is risky. You may have a new, well constructed home, but if the location is not a prime or close-to-prime area, you may watch values stay flat or actually fall. I have seen too many subdivisions start out with sparkle, but because the location is not desirable to shopping, services access or future expansion they went downhill until they began to deteriorate and become mostly rental properties held by investors.
At least with older homes, you have a track record with the area and you pretty much know which areas are desirable and which weren’t and went downhill. So make sure you gather information about the area and have a reasonable idea about how desirable the neighborhood is or will become because the area has future development plans which will make it “hot”.
If you are concerned about lot-size, you may also want to take into account that, at least in Savannah Ga, new homes usually have smaller lots – unless you go way up in price or buy land in the surrounding counties to build on. And you usually sacrifice square footage, which stands to reason - new construction prices will be higher per square foot, with location being equal; in other words, if a resale home is on the river with a dock and a beautiful view the cost per square foot may be higher than a home built in west Chatham, but if the resale home and newly constructed home are located in close proximity in west Chatham, the new home, of course, will be priced more per square foot.
But like I said, with the incentives builders are giving buyers now, if you get the right builder and you are in the right location, new construction might be the right choice, as long as you're willing to sacrifice lot and living space.