Should First-Time Homeowners Buy New Homes or Older Homes?
It used to be that new homes cost more than older homes, but that's not necessarily true across the board anymore. As land costs increase, the size of new home lots has shrunk. Especially in California, where one can practically crawl through a bedroom window and into the window of the home next door. Homes are that close in proximity.
Another reason today's construction is sometimes cheaper is that it's less expensive to use 2 x 4 pine framing or engineered wood over 2 x 6 redwood and to use drywall instead of plaster. Buyers who look at inner-city homes in desirable neighborhoods will find, on average, larger lot sizes, and the homes will cost more than entry-level new homes being developed in new subdivisions outside the city.
Here are advantages and disadvantages to consider when trying to determine whether you should buy a newer home or an older home.
Advantages to Buying an Older Home
- Old-World Construction
Older homes have stood for decades, some centuries, and weathered many storms. Some were built by hand by genuine craftsmen with meticulous attention to detail. You will often hear people say: They don't make 'em like they used to. It is true.
- Larger Yard
Years ago, when land was cheaper, builders built on larger lot sizes, leaving room to accommodate garages on alleys.
- More Character
Craftsman bungalows originated in California in the 1890s, but now they're ubiquitous across the U.S. Other popular styles are Victorians, Greek Revivals, Tudors or Colonials. Interesting architectural features are abundant in these homes such as arches, hand-carved decorative appointments, or stained-glass windows.
- Longer-Term Neighbors
Some older homes are passed down through generations. Many neighbors know each other. The neighborhood might be deemed historic.
- Established Neighborhood
Zoning changes are unlikely to occur in older areas. Hooters restaurants don't fare well in residential neighborhoods.
- Mature Trees and Vegetation
It's not uncommon to see 50- to 100-year trees providing canopies in yards and boulevards. Rose bushes tended to by our great-grandmothers are especially popular today.
- Closer to Downtown Entertainment and Restaurants
Not only do older areas tend to be located closer to downtown areas, but often residents can walk to local coffeehouses, antique stores, and restaurants.
Drawbacks to Buying an Older Home
- More Maintenance
If it were a "perfect" house, everything would fall apart at the same time. But things tend to go wrong periodically, and there's always something to fix. Chimneys and stone foundations require tuckpointing. Floors may slope.
- Expensive to Replace Wiring and Plumbing
If a home was built before sewer systems, the cesspool might overflow into a sewer. Tree roots break up sewer pipes. Galvanized pipes are rust-prone. Sensitive electronics require grounded wiring, and Romex (a type of non-metallic sheathed cable) can't be mixed with knob and tube. Aluminum is often dangerous.
- Smaller Closets, Storage Space, and Garages
Before today's concept of "bigger is better," people had less clothing, fewer personal items to store, and only one vehicle. I once owned a Victorian in Minneapolis that didn't even have a garage. In its place was a carriage house for the horses.
- Might Require Updates
Apart from HVAC systems, trendy updates involve pricey kitchen and bath remodeling.
- Often More Expensive
Classic and vintage homes generally cost more because of the location, meaning they are closer to conveniences such as schools, mass transit, shopping, and urban amenities.
- Smaller Average Square Footage
With the exception of estates, many older homes are smaller in size, even though family sizes were larger when they were built. Times change.
Advantages to Buying a Newer Home
- Little Maintenance
New construction is meant to last for a while, so new-home owners are not likely to install a new roof or replace the water heater. At least not for 10 to 20 years.
- Modern Conveniences
Many items are standard such as built-in dishwashers, refrigerators, microwaves, and wine coolers. The homes can feature master suite baths, workout and media rooms. Their wiring systems are networked.
- Builder's Warranty
In California, builders are required to give buyers a 10-year warranty. The first line of defense is to buy from a reputable builder who will agree to stand behind the structure and its components.
- Energy Efficiency
Many homes are built with solar panels that purport to save money on electricity. New appliances use less energy. Walls, ceilings, and floors are insulated. Dual pane windows retain more heat in winter and keep the home cooler in summer.
- Built to Code
Code regulations change all the time. Consumer safety issues are continually addressed in new construction and conform to current building codes.
- Emotional Factor of Newness
Let's face it, there's nothing like owning something that's brand new and has never been used, whether that's a car or a home or a husband.
- Less Expensive
If the new home is not custom, it's likely to cost much less per square foot than an older home in the city. Many millennials are flocking to suburban areas for precisely this reason.
- Greater Average Square Footage
It's typical to see two bedroom homes with 1,000 square feet sell for the same as a two-story, 2,500 square foot home in the suburbs. When builders can't build out, they build up.
Drawbacks to Buying a Newer Home
- Tract Homes Have Similar Floor Plans
Some say tract homes are identical to each other; they have no individuality. Others prefer conforming areas. So what if your neighbor's house looks just like yours? At least you know where the light switches are located.
- Immature Vegetation
It can take years for trees to grow. In the Natomas suburb of Sacramento, for example, many homeowners can't afford to landscape the backyard. The fronts of these Mediterranean homes look magnificent but look out an upstairs' window and everybody's lawn is dirt.
- House Settling
New houses settle. It happens everywhere, regardless of the type of soil. Settling causes cracks in foundations, walls and door frames. Builders can be slow to respond to warranty repair requests.
- Longer Commuting Distances to Downtown
If you want to be where the action is in a metropolitan downtown area or avoid the drive to work in rush-hour city traffic, the distance from downtown might make a difference to you.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.