If you’re torn between buying or building a home, understanding what each option entails will help you make a more informed decision. Here are the pros and cons of each journey.
As the seller’s market continues, many first-time homebuyers are deciding which route is best for them: buying an existing home or building a new one. While the right answer varies from person-to-person, there are several pros and cons for each option. As the housing inventory shortage continues, new construction has grown in popularity but the demand still outpaces the supply, so many buyers look to existing construction. Understanding what each option entails will help homebuyers make a better, more informed decision in their home buying journey.
Existing homes are often referred to as resale homes. “Resales are properties that are previously owned and re-selling not new.”
Sonia Graham, Realtor with JPAR Maryland Living advises that “Existing homes are a great choice too – you can tell if the bones are good; neighborhoods are established. Maybe you want something with good bones and a vintage feel that you can also update.”
Graham states in the Annapolis-Baltimore area that approximately 65% of recent sales are existing construction and that, “we are in a seller’s market here in Maryland. Homes are being priced really well, however, because of the lack of inventory, homes get sold at higher than listing.” This is true across the U.S. In September 2020, existing home sales increased by 9.4% from the previous month and 20.9% increase from last year for a total of 6.5 million homes.
Housing starts, or new construction, rose 8.1% from this time last year, according to National Association of Realtors’ Chief Economist, Lawrence Yun. Sonia Graham says that 37% the Annapolis-Baltimore home sales have been new construction. And there’s a reason the new construction has grown in popularity: it’s helping to ease the housing shortage.
Sonia Graham states that with new construction “the biggest incentive is the closing help; using the builder’s lender generally keeps the cost lower for the builder and so they have more room to offer incentives.”
Read: Questions to Ask Before Buying Land to Build Your Dream Home
Read: When Should We Start Building Our Home? Pros and Cons of Building in the Spring
As Graham says, “everyone loves the idea of being the first to live in a home – nothing used by anyone before, everything sparkly and brand new…” However, it’s important to understand no home is perfect; existing or new. This is why Graham strongly suggests “using the home inspector your Realtor works with… red flags will be found in the home inspection.”
To decide which option is best, it’s important that as a buyer you work with an experienced and knowledgeable Realtor that is proficient in both areas. As Sonia Graham reminds, “Its truly a family by family choice and neither is “right or wrong” as a whole – just “right or wrong ” for the client and their family.” By working with a Realtor, buyers can feel comfortable and informed on which choice is best for them. To start your new or existing home search, download the Homes.com app on your smartphone or search via the web.
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