One of the questions I get from buyers often is “should I buy a home, or have one built?” My answer is always the same: it depends! Sounds like a non-answer, but it really is more complex than a simple either-or answer. Obviously, every buyer is different, but I decided to write this article to lay out some of the factors to consider.
Average existing homes sales prices hover around $225,000. We have a dynamic market in Metro Detroit, so this number can vary greatly depending on geography, but, we’ll use this number for the purposes of this article. By comparison, newly built homes have a median cost of $290,000; significantly higher, which isn’t a surprise.
But, let’s look a little deeper. Older homes tend to be smaller. The median size of a home built between 1945 and 1975 is about 1,500 square feet, whereas the average newly built home is about 2,400 square feet. So now, the price per square foot advantage goes to the newly built home: You get more for your dollar.
Existing homes, if updated, are nice, because at that point, you can move right in and enjoy. Obviously having a home built is a more time-intensive project. But, again, when looking a little deeper, you only pay for what you want with a new home. You get to select the features you want. In the existing home market, if a home has a finished basement, and you aren’t necessarily concerned with that, you’re paying a premium (upwards of $10,000) for something you may or may not want.
Even an updated existing home is going to have significant wear and tear. A new home is going to have far less in terms of upkeep costs. But on the other hand, an existing home is more likely to have mature trees and other landscaping, so the cost and effort on that end becomes less.
One of the most important things to consider is time: When do you need to be moved? Are you on a time crunch? Can you wait? What are the market conditions? Many home buyers in 2017 & 2018 have been frustrated because they lost out in multiple offer scenarios. Out of the last 10 homes I listed (as of this writing), I have had an average of 4 offers on each one. One of my agents listed a home in Royal Oak and received 22 offers in one weekend. A buyer that can wait a bit might be wise to look into new construction, avoiding the emotional upheaval of losing out on their dream home.
Whatever path you decide to take, a Dwellings by Rudy & Hall agent is expertly trained to navigate the homebuying process. With an offer acceptance rate over 80%, our agents are specifically shown how to write offers that win (we even held a seminar to train other non-Dwellings agents on this very subject!) Give me a call; I’d be happy to help you find the home of your dreams.