I specialize in New Homes so if you are in that market, please visit my website where you can learn more about how I can serve your best financial interest in a New Home sale. It's always wise to have an agent on your side of the table in a purchase since it costs you nothing and you can have expertise at your side so that you don't feel as though you are being left in the dark.
Cathy Chapman, Broker
Signature Home Sales, LLC
The buyer should also consider whether the price, time, expense and labor it akes to bring a new home up to being comfortable. An older home that has been well taken care of and has been brought up to date with kitchens, baths and estalished landscaping and in an area that better suits your lifestyle is more than worth considering. Whichever direction you choose, you should engage a Realtor to guide you though the process making sure you get the best possible deal.
Whether to buy new or resale really depends on what you, the buyer, want. Does the community offer amenities that appeal to you? Are the schools good? Is the commute bearable? Right now, bargains abound because desperate owners are trying to get out of their homes AND compete with new home builders. Take time to become familiar with whatever community you are considering. Visit days, evenings and weekends...then make your decision. Whatever you buy, it will be for far less than if you had bought 5 years ago.
While I think new is not always better, in the end buyers will buy where they think they'll get the most for their money. If you have a resale and a new home in the same subdivision, you are definitely competing with builder incentives. Builders are in a better position to lower the prices than individual home owners are. Unless the resale has something to offer that the new home does not have, a buyers will probably lean towards the new home. They can also look to the builder should problems arise after the close of escrow whereas it's more difficult to try to get a private owner to take care of a post-escrow defect. Builders have warranties that private owners do not have. On the other hand, an existing home may have landscaping that the new home does not have.
There are definitely areas where the builders are no selling new homes for less than what buyers paid for the same model a year ago and those builder sales do affect the resale values of the existing home inventory. My recommendation would be, don't sell if you don't have to while the builders are still selling their new homes. I would also recommend to buyers of new homes to think about how future sales of homes by the builder might affect the values of the new homes they are buying today from the builder. A lot of buyers of new homes do not think about that when they make their purchasing decision. I know this is going on in one of the master plan communities in my area and I see how this trend affects valuation in that area as I am having trouble coming up with comparable sales that make sense. The same model that sold for $500,000 a year ago, may now be sold for $400,000 less, which of course hurts those who are trying to sell the house they bought a year ago for $500,000. Another problem is that many builders do not report their sales through the MLS, which makes it more difficult for agents representing buyers of new homes to research values. I have even seen $100,000 price differences among new home sales of the same model within less than 6 months.
If your market does not have a glut in inventory - new build or resale home - one should compliment the other. However, in a glut (genuine buyers market) the new build can make for a better deal to the consumer.... I'm not speaking in terms of price alone. If a resale home needs work; it cannot compete with the "like" new build homes.
Each market is unique - from neighborhood to neighborhood. A good agent in your market can tell what your "variables" are.