Do New Homes REALLY Cost More Than Used Homes?
You may have noticed that at first glance, the pricing for new homes seems higher than similarly sized used homes. The quick and easy response to this is that new homes are just better, and therefore worth more than a used home. New cars cost more than used cars, new boats are more expensive than used boats and so on. New just costs more. But leaving the discussion at that really doesn’t do the statement justice, because when you look a little closer, in many cases, buying a new home will actually cost LESS than a cheaper used one.
First, the obvious. Materials today are costlier than they were even a few years ago, so the wood that went into framing a 2,000 square foot home ten years ago is simply more expensive today. Second, the other materials, technology, and appliance that go into new homes are priced higher than it was in the past. New homes face different regulations and energy efficiency and environmental standards than homes that were built years ago. Finally, labor and transportation (fuel) costs are higher today than they were years ago.
Having said all that, once you take a close look, the difference between a pre-owned home and a new home may not be as great as it initially appears and in many cases, you’ll save money with the new home. The new materials, insulation in, more precise construction techniques that create a more air-tight home make new homes much less expensive to heat in the winter and cool in the summer than than used homes. New vinyl window technology insulates your home better than the older wooden or aluminum windows and the slightly tinted glass in windows today can drop the heat coming through them a few degrees. the radiant barrier in many new home attics can lower your attic temperature several degrees, again, making the interior of your home easier and cheaper to cool. In some cases you could be saving hundreds of dollars per month on your utility bills in a new home. Add that amount your saving with a new home to the payment of a used home and it may not seem so cheap!
Second, the appliances in your new home will use less electricity, gas, or water than older, less efficient appliances. Most used homes have old appliances, and to get the benefit of these new appliances, you’ll need to buy them. New, more energy efficient HVAC systems use less energy to do the same amount of work their older counterparts did, and the smart technology built into appliances or thermostats will add significantly to your savings. Your actual cost of living in a new home may make it less expensive than a comparable used home.
Third, many new home communities have amenities such as workout facilities, pools, basketball or tennis courts, movie nights, walking trails, fishing ponds, and some even have coffee cafe’s that will save an average family thousands of dollars a year in entertainment and activity costs.
Fourth, in most used homes the new homeowner will have to pay for some repairs or upgrades to make the home their own. Repairs such as carpet, new paint, granite counter tops, new faucets, toilets, and other upgrades cost a lot of money. Used homes also may have some underlying other problems that you just don’t see when you buy the home such as electrical, plumbing, foundation, or interior problems may rise in the first few years of living in your used home that you’ll have to pay to repair. These issues are highly unlikely in a new home and are all covered by the builder’s warranty- so if they do occur, they won’t cost you a thing and they’ll be repaired quickly. Knowing that something could go wrong at any minute can negatively impact your peace of mind- and who want to live with the possibility of a huge repair bill hanging over their head?
Finally, the schools in many new home communities are new, built with the very best materials and have the best and newest facilities for learning and athletics. They attract the best teachers and are located close to the new home community. In many cases, children can walk to the school. How much money and time would that save!
While the “list” price of a used home may be lower than a comparably sized new one, when you take a closer look, it becomes clear that the “real cost” of living in a used home can be hundreds more than living in a beautiful new one!