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Really complex topic. I have a lot of thoughts on it, but it's almost too much to type. Short version of my thoughts on why people choose to buy new vs resale:
- Modern families are busy and upkeep/renos/projects are all time consuming
- Fewer DIYers doing renovations and projects themselves
- DIYers have a hard time following building codes and passing inspections. unpermitted work is frowned upon now, more than ever in the past. Ask me how I know
- Contractors are expensive
- Major Renovations are expensive and with modest priced homes, it's hard to get enough equity out of the work
- resales might have undesirable floor plans
So when you factor in all of the above, then you see a brand new house (exactly how you want it) just 15 or 20 minutes further from town, you jump on it.
It's the HGTV effect. So many have to brand new. I'm sure many feel they deserve it and a certain segment think they are entitled to it. They see a show house on TV and feel they should be able to have that too. Ie: Perfectly functioning kitchen, but in a color they don't like "OMG, we could never live here. This is a total gut job!"
Higher interest rates don't correlate to lower home values.
Not across the board, no, but my point was not as simple as that. I wonder if current new construction will hold its value and continue to appreciate at the same rate as current resales, especially when you look at price per sq ft, etc, when compared to current resales... all at a point in the future when they will all be resales AND the real estate environment is one in which interest rates are higher.
Not across the board, no, but my point was not as simple as that. I wonder if current new construction will hold its value and continue to appreciate at the same rate as current resales, especially when you look at price per sq ft, etc, when compared to current resales... all at a point in the future when they will all be resales AND the real estate environment is one in which interest rates are higher.
right people talking about why they like new construction now miss the point.
How will their investment look to future buyers when THEIR home is a resale, how will its pricepoint sustain at such a higher clip than existing resale market
[quote=ncrunner77;46724310]But they might care about the convenience of being closer in and thus be unwilling to pay such a premium for a newer build, that still needs updating, that is farther out.
This I totally agree with. Coming from a larger city this is a much bigger priority for us. I would think many transplants in the future will be just as happy living in a condo if it's centrally located. I've seen this trend happen in 3 cities I've lived in as an adult. Not sure if it's happening in Raleigh yet?
But they might care about the convenience of being closer in and thus be unwilling to pay such a premium for a newer build, that still needs updating, that is farther out.
This I totally agree with. Coming from a larger city this is a much bigger priority for us. I would think many transplants in the future will be just as happy living in a condo if it's centrally located. I've seen this trend happen in 3 cities I've lived in as an adult. Not sure if it's happening in Raleigh yet?
Yes, we have condo opportunities, so it is a matter of choice.
Townhomes seem to be king of the market right now, though. Fewer people want to handle maintenance of a home and grounds. And, dirt is too dear to buy enough for a house.
Yes, we have condo opportunities, so it is a matter of choice.
Townhomes seem to be king of the market right now, though. Fewer people want to handle maintenance of a home and grounds. And, dirt is too dear to buy enough for a house.
I have a townhouse for similar reasons - don't want to maintain a yard along with taking care of a house as a single guy in my 20s but condo HOA fees are ridiculous and there's no land owned with condos.
It's the HGTV effect. So many have to brand new. I'm sure many feel they deserve it and a certain segment think they are entitled to it. They see a show house on TV and feel they should be able to have that too. Ie: Perfectly functioning kitchen, but in a color they don't like "OMG, we could never live here. This is a total gut job!"
That's certainly part of it.
Look, just a few weeks ago we were discussing a city-data poster here wanting to buy a house (a resale) but they didn't like the kitchen and wanted to renovate it upon move in. The person was looking for advice on whether or not they should buy the house. At the end of it, they were essentially talked out of it because the numbers don't add up. Putting $50k into a single room in a house usually doesn't pay such a good return. But that's where so many people are stuck.
Now maybe this plays into your point a little bit, maybe this person was expecting too much for the price. I don't know. But for them, they had kids and the nature of the layout (not open concept) was a deal breaker and the cost for renovation was too high.
And if it's a choice between a house they'll never be happy with in North Raleigh or Cary, or a brand new house in Wake Forest or FV, the brand new wins 7/10 times. It's just the house they will be more comfortable in as a family. And the extra drive times are a minor side affect that they will accept.
I wouldn't mind a new build myself and have nothing against them. It just has to be in the right location ..... and for the right price
It would be interesting to know the price per square foot for new build in the area vs resales. Just looking at the huge selling price gap between resales and new builds (it bounces around 200K based on what I gather from recent Triangle MLS update videos) it seems people are paying quite a premium to live in new build -which is often, but not always, farther out. https://www.trianglemls.com/news.cfm
Here is my very rough guess:
New build = 450K/3500 sqft = $128/sqft
Resale = 250K/2200sqft = $114/sqft
Is this even close and does this make sense to be paying that much more per sqft to live farther out? If so, seems wonky or counter intuitive to me. I guess I"m conditioned to housing being more expensive the closer in to the city/employment center you live. I know real estate is local but we are working with the averages here and the established neighborhoods in Raleigh and Cary are not gang wastelands like East LA or South Chicago (even there real estate is pretty pricey for what you get). Are the finishes of new build commanding that much more of a premium over the location of resales? If so, then the HGTV effect is in full swing. Should the mantra be "Finishes, Finishes, Finishes" instead of "Location, Location, Location"?
It is not because resales are less desirable; on the contrary, the latest MLS video explains competition is even more fierce for them because they are doing a better job of meeting buyer's price points (i.e. affordable).
Though the video points out demand in N Raleigh and Cary, even resales in HS and FV are going crazy and I think this is unusual because they are surrounded with new construction and usually I would expect this fact to put downward pressure on resales in the immediate area. I think this illustrates the market gap and pent up demand for more modest new builds.
Since when did new construction become soooo much more expensive? The experts in these MLS videos act like it ain't normal. I know there have been previous threads on this but it really fascinates me
Location: Chapel Hill, NC, formerly NoVA and Phila
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The article said it looked at over 50 cities across the US, but didn't specifically name Raleigh, so not sure if it was included. Interesting read, nonetheless:
I tend to agree.
Every deal stands on its own merits.
There are townhome communities that I would avoid. When they sell in the low $100,000's and the dues are $200/month or more, there is a red flag for something to be looked into deeper.
I would rather pay $120/month to have exterior and grounds maintenance than do it myself or depend on a tenant for mowing, etc.
What are examples of red flags to watch out for? Looking at condos in southwest area (Cary, Raleigh) that are in those price points and HOA fees.
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