For starters … New likely means a higher price and farther out
Apples-to-apples in terms of the basics … ultimate total cost, nature of neighborhood, square feet, number of interior stories, number of bedrooms, number of parking spaces and major amenities, like a swim pool … the “rule-of-thumb” is that new costs 20% more than a comparable resale home that is closely comparable and of the same basic construction.
At a ballpark $500,000 market price, not exceptional these days, that’s ballpark $100,000 for cash to “renovate” a closer-in resale home to exactly the place where you want to live.
Below are lists of some of the choice issues … not even close to exhaustive because every individual is going to be concerned about and focused on different things … and every property is going to have its unique issues. But I believe these make clear that “new” is not necessarily the better choice.
Also, buying a mostly-constructed new home, a “spec” or one that fell out of escrow early that meets all criteria for basics and amenities and that still has interior customization choices to be made, eliminates several of new-home cons … a very “lucky” situation where available … but most of the more important “cons” remain.
| New | Resale … assuming renovation after purchase |
|---|---|
| Cons • Higher price • Smaller lot • Closer neighbors • Longer commute • Sterile nature of “new” • Six month build-time wait • Limited customization choices • Minimal lot landscaping for year+ • Unknown nature of adjacent homes • Construction zone after move-in until build-out • Bare streets for year+ - no trees and other greenery | Cons • Unlimited renovation choices – stressful process • 30 to 60 days renovation build-time … or live-in mess. • Uncertain results of renovation • Uncertain cost for renovation • Complexities of contracting |
| Pros • Better energy efficiency • Better technology • Better condition | Pros • Larger lot • Lower price • Shorter commute • Well-defined neighborhood • Definitive, better-known basic product |
