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Buyers
Re-sale vs. New Construction
The lure of new homes is very appealing. You can move into a property as the first and only owner, choose your upgrades from top to bottom and design a landscape all your own.
There are however many downfalls to purchasing new construction. The first thing to consider is cost. Just as when purchasing a new vehicle, the advertised price is never the same as what you pay when all is said and done. Many homeowners will pay upwards of $40,000 to $60,000 in builder upgrades to their home, when the fact of the matter is that they will generally only recover about half of this investment. This does not take into account the additional improvements that you will need to add before you can call your new house a home. Following is a list of upgrades to be added after moving in to new construction, their estimated costs and added re-sale value.
| Item |
Cost |
Re-sale value |
| Pool |
$25,000 - ????? |
$10,000 - $15,000 |
| 2” blinds |
$3,000 - $6,000 |
$1,000 |
| Plantation Shutters |
$6,000 - $12,000 |
$3,000 - $5,000 |
| Rear yard landscaping |
$10,000 - ?????? |
$0 - $7,000 |
| Custom window treatments |
$6,000 -$12,000 |
$3,000 |
Beyond the costs associated with new construction, there are also many additional factors to consider. First is the neighboring homeowners, where it is a roll of the dice as to whether they will add or detract from the value of your home. Not to mention the general discomfort of living next to a loud or inconsiderate homeowner.
Another factor to consider is the area schools. Most new subdivisions are building schools right within the neighborhood. This is very convenient for residents, but definitely not tried and true. As a homeowner in the area there will be no way to gauge the quality of education that your children will receive, where as with an established home you have the ability to research area schools and their academic performance levels prior to finalizing your decision.
Taxes are also statistically higher in new sub-divisions, whether they be for lighting and landscaping, water and sewer or Mello-Roos.
The list of positives and negatives is seemingly endless, but to summarize, in most cases it is a far better investment to purchase a re-sale home. This enables you to research the neighborhood and surrounding areas and also capitalize on the upgrades made by the previous homeowner.
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