Buy a new home or resale: Which is the better investment?
Planning to buy a home? Should you buy a new home or a resale? Which is the better investment? Before you base your decision solely on the price tag, think about the hidden costs of some issues and the added value of others.Forbes Capretto Homeswants you to know how to evaluate your options.
The larger the inventory of homes for sale, the better your chances for finding the right one. Currently,existing homes on the market aren’t as plentiful. In fact, in December 2022,inventory of existing homes was at an all-time low, with expectations that it would continue to decline.
People aren’t rushing to sell. During the pandemic, there was a rush of homebuyers when the interest rates dropped to a historic low. Homeowners also invested in fixing up their homes because they planned to stay. And that’s what they’re doing.
With new construction, inventory is not a problem. If you don’t find a move-in ready home in the community you want, choose to build one on an available lot there. Essentially, you bypass available inventory and create your own.
So, do you want to compromise by buying a resale home that isn’t quite right or would you prefer to invest in new construction, where you choose all the details?
True cost of ownership
This is where homebuyers need to understand their choice to buy a new home or resale to know which is the better investment.
An existing home is usually less expensive than a comparable new home—and by comparable, we mean the same square footage, location, and features. It’s less expensive for the same reason a used car—excuse me, “pre-owned”—costs less than a brand new vehicle. It has wear and tear.
You might pay less to purchase a resale home, but what you must look at is the cost of ownership. What does it cost to own, not buy, a home? You should factor in the costs of repair, utilities, HOA fees, insurance, property tax, and upkeep. Will your home need a new roof soon? Maybe you’ll have to replace the furnace, water heater, HVAC, or major appliances. Estimate those costs and include them in the total cost of ownership.
Will you have to replace the flooring or windows? Will you need to update the bedroom, bathroom, or kitchen in the resale home you’re admiring? How about cosmetic changes?
Here are some numbers to consider:
Theaverage cost to replace the roofon a 2,500 square-foot home is about $14,000.
Replacing the HVACwill cost between $6,465 and $11,877.
Thecost to remodel a kitchenaverages $13,135 nationally but depends on the extent of the renovation and where you live. HomeAdvisor estimates $26,793 for anaverage kitchen remodel.
If you’re planning toremodel the bathroom, expect to spend between $5,500 and $15,000.
Replacing old windows with energy-efficient windowsadds value to your home but will also cost an average of $614 to $1,309perwindow.
Look at the purchase price of the homes you’re considering and make sure you’ll have the funds to afford the changes to make it the right fit for you.
Move-in ready refers to a home that needs little or no work to make it fully habitable for you. How do you define “habitable”? Is it putting up with an outdated kitchen, small closets, or the lack of an outdoor living space? Are old carpets or worn out wood or vinyl floors fine with you? The degree of move-in readiness is up to each individual.
If you’re not a fixer-upper, DIYer, or handy person and you don’t have evenings and weekends to spend working on your home, be wary of buying a home that needs your time and money.
A new construction home is completely move-in ready. Everything is brand new. The paint is fresh. The floors are pristine. If you’ve built the home, you’ve already made every choice for the finishes, right down to the knobs and hinges. There is nothing to do but unpack.
Conveniences and necessities
The new homes being built this year reflect advances in technology and construction products and practices. As a result, new homes are more energy efficient. Low-E windows, energy efficient appliances, a tankless water heater, and the improved insulation on a new home contribute to significant savings in your utilities. AnENERGYSTAR refrigerator alone can save about $125 per yearin electricity costs and anENERGYSTAR washerreduces energy usage by 25 percent.Low-E windowssave an average of 10 to 25 percent in heating and cooling costs. In addition, with improved indoor air quality systems, you’ll also benefit from having a healthier home!
New construction homes are better equipped to handle your technology needs, like cabling that delivers a more reliable, robust internet or WiFi signal without dead zones. New construction homes for sale are ready for your smart home automation. They often include packages of smart devices, like a video doorbell, alarm system, door lock, thermostat, along with simple ways to add smart appliances, devices, and systems.
Remember, all of these energy efficiency, technology, and construction advances are included in the cost of a new construction home. Your total cost of ownership already reflects these figures. When you’re trying to decide whether to buy a new home or resale, these savings and costs are essential to determine which is the better investment.
Peace of mind
A new home includes a builder’s warranty. The structure is covered from the foundation to the roof and everywhere in between. If something happens, the warranty covers the cost to repair. When you buy an existing home, the costs are your burden alone.
In addition to the home itself, the appliances are covered by a manufacturer’s warranty. And by appliances, we mean more than the major household appliances, like a refrigerator or washing machine. The water heater, furnace, and HVAC are other appliances that are fully covered by the manufacturer’s warranty.
You can move into a new construction home with the peace of mind that repairs are not your financial responsibility. With a resale home, even when you’ve had a home inspection, you’re still at risk for unforeseen problems.
Add it up
As you’re trying to decide which is the better investment whether to buy a new home or a resale, create a realistic checklist of items that contribute to the total cost of ownership:
Repairs and maintenance
When you’ve calculated the total cost of ownership, you might be happy to discover that the new home is the better investment—both in money and your time. Liveinyour home, notforit. Don’t let a home consume your time and budget.
New homes for sale near Buffalo
Forbes Capretto Homesbuildscommunitiesof new homes for sale near Buffalo, in popular Buffalo suburbs like Orchard Park, Clarence, Hamburg, Grand Island, and Williamsville. Our portfolio of exclusivehome designsfor Western New York include ranch and multi-story homes, with styles and sizes to fit any lifestyle. Floor plans range from 1,520 to more than 4,000 square feet. Each of our new homes for sale near Buffalo comes with an extensive list of standard features and the superior quality Forbes Capretto Homes has become known for. Once you decide, you’ll work with the professionals in ourDesign Centerto select every detail.
Ready to move right now? Look at ourmove-in ready homes —all brand new!
Should you buy a new home or a resale? Which is the better investment? The answer is clear. A new home is the best choice for today’s homebuyers! Talk to Deb Dickman (716-202-0839) to explore the opportunities with living in a Forbes Capretto Home.