Is there a premium on owning new homes and homes that were built recently?
You Bet! More buyers in today’s real estate market in the North San Diego County area are realizing the value of buying a new construction home. Besides from the reduction of inventory in existing homes in the area and the current challenges of purchasing an existing home Buyers are recognizing the advantages of buying a newly constructed home.
Typically, newly constructed homes sell for approximately 10% to 15% more than existing homes. You would expect anything new to cost more than something that is old, used, worn out, out of date. If you purchase an existing home that is outdated you could easily spend tens of thousands of dollars to bring it up to date with an extensive remodel and the remodel may not necessarily take care of all the unknown, unseen or undisclosed problems associated with an older home.
Buying new allows the buyer to choose from more desirable and modern floor plans that accommodate current lifestyles, family preferences and California living. Newer homes now offer master bedrooms on the ground floor, guest suites or casitas, larger and more modern kitchens with large kitchen islands and more cabinet storage, more open space with higher ceilings, the latest plumbing features and much more. Newer plans also provide better circulation for you and your family members through the home as well as integrating outdoor living.
A new construction home also provides you with the latest in esthetically pleasing exterior elevation designs, built with materials that are made to stand up to the elements with little maintenance over time.
Many of the new home communities being built in North County are in master planned communities that offer amenities for all ages including, parks, community swimming pools and fitness rooms, walking trails and local conveniences. Newer communities also offer newer, uncluttered streets and walkways, better community lighting and in many locations new schools. Granted you may have to pay Mello Roos or CFD (Community Facilities District) fees, however when you put everything in perspective, if you need to sell your home, the improvements you will be paying for may attract more buyers, especially if the home is located within a school district with highly rated and newer schools. Not all new homes are in master planned communities and you may not have to pay the extra Mello Roos and CFDs.
New homes in California are being built to some of the highest standards and must conform to new and beneficial building codes. Most of what goes into the construction that conforms to the new codes such as the insulation and shell of the home you may not see until you start getting your utility bills. Simply, newer homes are more energy efficient. To better market their homes as well as be more energy conscious and responsible, builders are making standard some of the fundamental elements of green design including more efficient appliances, tankless water heaters, LED lighting, solar panel systems, high efficiency heating and cooling systems, the latest in whole house electronic controls and plumbing equipment that conserve water.
Lastly, when you buy a new home everything is under warranty for one year and the home construction is covered for 10 years for builder and material defects.
To show an example of how the value of newer constructed homes holds up I have tracked single family home sales in the North County San Diego area for 2014. The graph above demonstrates the values of homes sold and their age. Clearly, newer built homes sell for more.
The chart below demonstrates how lot sizes along with home sizes have changed over the years.
Buying an older home may offer you the opportunity to buy a home with a larger lot as the median lot sizes of homes sold in 2014 have changed from approximately10,000 square feet prior to 1970 to a median size lot of approximately 8,000 square feet for homes built in 2013.
As lot sizes decreased the home sizes have increased for homes built during the same periods. The size of homes has almost doubled since prior to 1970. Homes sold in 2014 that were built in 1950 were 1,400 square feet. Where homes built in 2013 and sold in 2014 had a median size of 3,207 square feet.
There are many other factors to take into consideration such as the location and communities of the homes and whether they are coastal or inland.
*Data gathered from the Sandicor MLS. Does not include data from rural areas. This report is meant to be an example of current real estate trends of home values in North San Diego County and interpreted by Rob Pontarelli.