It’s official: after years of little to no activity, home-builders are dusting off their tools here in Roseville and Rocklin. Last year housing permits hit their highest level since 2008, according to the Census Bureau, and new-home sales grew 20% from the prior year. The builders in Roseville and Rocklin are more optimistic than they have been for years.
An untouched home offers advantages, of course, such as a sleek modern and open layouts and few repairs. Buying an existing home, however, may allow you to seal the deal faster and can offer you and your family a much better short-term price appreciation. These head-to-head comparisons can help you decide which choice better fits your needs.
All else being equal, new structures typically command 10% to 15% premiums over similar existing places. You’re unlikely to be making an equal comparison, however. “In most of Roseville and Rocklin, the lots in the best locations are already gone. The newest homes are often built farther from centrally located areas and many have smaller yards than their older counterparts, so they can wind up costing less. What you won’t find in either place is the lavish incentives tossed to buyers during the bust; those have largely disappeared but I feel they are on the cusp of returning.
When you’re visiting prospective homes, check the numbers on both the lot size and the layout. A spacious existing home that’s overflowing with the current owners’ stuff can look and feel cramped, whereas builders use lots of tricks, such as putting in full beds instead of kings or queens and removing interior doors, to make a new home’s space seem larger than it really is.
SPEED OF TRANSACTION
Most builders today are selling new homes from models. Once you agree to purchase, the actual construction begins. The upside: there are still a lot of ways to personalize your home, such as adding extra storage, creating an office, choosing your color scheme, and more. The downside is that the finished product will not be completed for anywhere from six to nine months. This can make it difficult for those who need to move soon.
Timing the purchase is also a challenge when you’re looking at waiting period. List your current home when you agree to the new home and you risk selling too early; wait until your moving date nears and you could be stuck covering two mortgages until you find a buyer and close the deal. Ask a realtor how fast homes are selling, and if necessary discuss strategies to get yours sold quickly.
COST OF OWNERSHIP
After a few decades, roofs get leaky and boilers go bust. You’ll spend an average of $18,000 on a new roof and $3,000 for a new furnace. New homes also carry lower utility bills. Energy use per household has fallen over the past decade in part thanks to changes to building energy requirement and codes, which call for more insulation and tighter sealing. This should continue to fall further in new homes as Rosevill and Rocklin homes are held to a high standard. New construction on average is 30%-40% more efficient than existing homes.
CHANCE FOR NEAR-TERM GAINS
While handy homeowners can reap the benefits of sweat equity, a new home offers very little room for improvements and is likely to sell for about the same price as others around it. New homes are for the most part based on a set of conforming architectural styles.
Prefer new? It can pay to buy into a development early, since builders typically raise their prices as construction progresses (particular if the homes prove popular). This has been seen through Roseville and Rocklin, particularly in the Crocker Ranch and Whitney Ranch subdivisions. The risk is that there’s no guarantee how the neighborhood will turn out. Ask the builder how many are under contract and how many area being bought by investors rather than primary buyers. “Empty Lots” can become “Empty Promises”.
So, to recap, the choice is yours and ours alone. New construction rates will continue to rise this year in Roseville and Rocklin due to increase of prices and a lack of inventory. Interest rates are slowly rising and they will continue to do so this year. Property values have been on a steady increase. Borrowing money is cheap right now and you do not want to be sitting around in a few years saying I could have or I should have. Find a local expert to help discuss your options and I wish you all happy house hunting.
Source: Money Magazine- March 2013