A question difficult to answer
By HAROLD BUBIL – Sarasota Herald-Tribune
New home vs. resale? I'm not sure if that question is the third rail of real estate journalism, but I am going to touch it anyway. Just this once.
Why is it an electrically charged question? Look at the vested interests and the money involved. Realtors -- there are a whole lot of them, with a lot of commission checks at risk -- will tell you there is nothing wrong with resale houses, and often they are in a more convenient areas than new construction.
"Location, location, location," chant the real estate agents, backed by the 1 million-member, 105-year-old National Association of Realtors.
A resale house often costs less, too, and has charm and history and mature landscaping. The neighborhood -- the schools, traffic, surrounding houses -- is a known factor, too.
Home builders, on the other hand, have the 140,000-member, 71-year-old National Association of Home Builders on their side.
They will argue that new construction is better than a house even a few years old; that you aren't buying someone else's problems; you can get exactly what you want by buying new.
New houses are superior in technology, too, said John Cannon of John Cannon Homes.
"We did a quick simulation on a 3,000-square-foot house," said Cannon, comparing one built this year with a house built in 2005.
"Between the new codes and the new technologies -- everything I do now is Icynene (spray foam) insulation, high-efficiency air-conditioners, tankless water heaters, recirculation systems, impact-resistant and low-e windows -- all of these things add up to lower costs to run the home, whether it be electric bills or insurance bills. And that is not counting lower maintenance cost," said Cannon, who, like a number of local builders, is constructing new houses West of the Trail in Sarasota, for buyers "who want to be near the amenities and don't want the commute," as well as in Lakewood Ranch and other eastern subdivisions
"If you are comparing a new house with one that is six or seven years old, you save $4,000 a year in costs," Cannon said
"We all know interest rates are 3.5 or 4 percent. That $4,000 a year is equating to about $100,000 more in buying power. I can spend a little bit more on a new house, get it to where I want it, and the overall cost to live in the house is the same as the old house where I have the higher electric bills."
The interesting thing about the new home vs. resale argument is that a house is "new" for one day. After that, it becomes a resale, and the colors, finishes and floor plan chosen by the original owner might not be preferred by subsequent home shoppers.
And the technology argument, while true, also contains an irony. In 2005, the houses were said to be better than those built in 1995. In 1995, they were better than in 1980. And on it goes.
Fortunately, the buyer pool is as varied as the housing stock. There is something for everyone, whether the criteria is location, technology, acquisition cost or continuing cost to own.