This post is not as bizarre as the title may suggest. The topic today is why should people be buying new homes when there is such a large inventory of foreclosures, short sales and just well priced resales.
My first answer is BECAUSE YOU DESERVE IT. I know I am biased but there is nothing better than moving in to a new home and taking that blank canvas and making it your own versus redoing someone else’s taste and needing to make updates.
Some reality checks that play in to this also – Everything is NEW in a new home and you don’t have to worry about replacing this or fixing that. New Homes offer warranties generally for at least one year on all workmanship and materials and the homebuilding industry has stabilized so that you can buy today with much more confidence than you could last year that your builder will be around for that warranty.
But Kevin what about – the DEAL – I’ll pay more for a new home. My answer is – in the long haul, will you? After you fix it up, do the repairs and live through the misery of that, how much will you have spent and what is your upside?
If you buy in a new home community that is relatively well established prices have gone DOWN – you will be buying a new home for less than your neighbors did (and they will hate you for it) but guess what, builders are selling new homes at prices right now that can’t be duplicated in the future. Those new home communities in my opinion have a better potential for upside appreciation than buying a 10 or 15 year old “deal” in an area that has peaked because in order to make a fair profit, builders WILL have to raise their prices over the next few years in the subdivision where you are buying. Doubt this? I sold new homes in 1990 & 1991 for a major homebuilder at break even. The price of those homes went up substantially over the next few years as the market recovered and did much better on a percentage basis than homes that had been sold as foreclosures in the area. Even your homeowners insurance premiums will be less. If an insurance company thinks a new home is a better risk than an older home that should make you feel pretty good. They have actuaries and statisticians who figure all that out. Don’t believe me, ask my friend Chris Jordan
In other words – in today’s environment – you can’t lose – Really, the prices ARE that good.
Oh and the thing about the toenails. Any experienced new home salesperson has heard this one. If you have a client who is trying to make a decision about your new home or a resale. You are supposed to say “would you really want to live in a home that had other people’s toenails in the carpet?”
No I’m not kidding – and I have used it – and gotten the sale. But I knew my audience before I ever said it. Thanks Kevin B Morrow a real estate agent and Associate Broker with ERA Sunrise Realty for contributing today’s blog post on the options available and the value they present to today’s buyer.