Build or Buy? A Housing Market Dilemma

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Another element to justify building a new home is any property with an older mobile home. The mobile home is usually a negative in real estate valuation, and replacing it with a stick built home will create a better living space, and make the property more desirable for future sales.

rick grimsley of WA 9:28AM April 27, 2013

Build all day long!!!
Get what you want where you want finished how you like and help insure value remains.
It’s good for the economy not just Realtors. It’s good for the Earth-high efficiency appliances and HVAC.
Bank and mortgage company's still have allot of work to do to modify loans and let people keep their Homes/Stop dragging this out by hiding the shadow inventory. he principle balance and take the hit because we all know you most certinly took the gain from us twice!!!!
WHA

WH of MN 4:46PM June 14, 2012

I think an used home completly checked out is the better buy, many things in the used home are already added or improved. The purchace just needs to be checked out,to build a new home can be very stressful if you check if the contractor is having things done as you have requested, I purchaced a new home to be built and needed to check out many things as it was being built and found many things that were being over looked if I had not been their while the home was being built. many times an used home has many upgrades previous owner have done and are not charging for

Carolyn Gillum of AZ 12:52AM May 07, 2012

New construction is the foundation of housing... There would be no resale houses if the custom and production houses were first built. As far as contribution to the economy, new construction creates (in normal markets) account for approxiamtely 30% of the overall economy, and is a creator of jobs... Jobs from on site, to design, manufacturing, to the after market of home improvement. As population grows and aged homes fall to disrepair, new construction again is the resolve. The majority of neighborhoods are a result of production construction. They evolve into communities, and become the places that people want to live. Housing is ever evolving, having said that new construction and resale housing are dovetailed, and are both available for the consumer to call home.

Charlie Rens of ID 11:09AM May 04, 2012

I have a few corrections to this article. One is the ground the home is sitting on was paid for at some point. If it is a used home you still pay for the lot.
Secondly, we never low ball a cost projection or give unrealistic allowances in order to get a job. The smart thing for a consumer to do is check references, check references, check references.
Sincerely,
Gary Bayless-President Bayless Custom Homes

Gary Bayless of TX 2:20PM April 27, 2012

I certainly agree with Broker Fletcher. I worked in both fields; with a new home builder and as an agent. I have found a huge number in Texas, want only new homes. There are many benefits. It was actually stated by my buider when hired, that 80 to 85% of all sales were Realtor related. That is high!
When interviewing my clients since arriving here from Florida, I always ask new or resale. I hear"If the floor plan works I am not opposed to either.' I want to give my cient the best home at the best price, and often, that may just be a new home.

Kathy Tirey of TX 10:44PM April 25, 2012

I am a real estate broker who has sold more than $3 billion in new homes and condominium sales.
I'm sorry, but I did not see any quantified data to support your assumption that "The only true advantage that building a new home provides in the current market is customization. All other factors indicate that buying an existing home is the best financial choice."
What are the "all other factors?" I have never seen this type of study in my 30 years.
People buy new homes for all kinds of reasons, mostly because they like new. Most new homes sold are not 'customized." I don't have a clue where that came from.
I am dealing with a new homes prospect as I write this who is moving out of a 'deterioating' neighborhood and will not look at resales. He is insisting on new, as a portion of the market does. He is willing to buy one of the current models and needs the time to sell his home.
I have talked with new homes owners who negotiated for short sales for months, got fed up and bought new..and glad they did.
Of our course the NAR thinks resales are a better deal. They get paid to think that way.
I can only go on my experience, such as watching short sale prospects turn to new homes because renovations costs in these existingi homes can be enormous (see my Inman news column) or quoting the buyer who turned from short sales to new home and purchased a new home for $2 a square foot less, based on numbers determined by her Century 21 Realtor.
Home builders can't wait until the market turns around. They figure it out. Check out the stats in your own market.
About one out of 10 homes sold is a new home, or close to it. Seven out of ten new homes are sold by real estate agents, or close to it.
Sadly, only 3-5% of the agents in a market even show new homes, because they are not trained or encouraged to do so.
If more real estate agents showed new homes they would sell more resales, as well as close a new homes every now and then, instead of losing prospects they should have sold.
We need to stop comparing our selves to ourselves and let the market tell us why it does what it does.
And back up our assumptions with objective data.
The stakes are too high for any one individual to become the authority, because they are quoted. No offense, but we are in serious times. Jobs, profits and commissions are at stake.

David Fletcher of FL 10:17AM April 25, 2012

Sorry to disagree with Robert Simons but the fact is that most purchasers would prefer a new home most other factors being equal. New homes are more energy efficient, are designed for today's lifestyles and utilization, provide "new" appliances and less worry about maintenance and repair and have shown higher rates of appreciation, even in today's marketplace.
As far as Simon's statement that "If you're going to build, you're on the upper end of the market", that is simply untrue. Most markets provide quality new housing at most price points so unless you are at the absolute lowest price, there is generally a good selection of new homes available to satisfy all pocketbooks.
When you add in the benefits of being able to choose the colors, options and eatures that you want within the total price, new wins most of the time.
www.residentialmarketingblog.com

Daniel R. Levitan of FL 3:30PM April 24, 2012

I agree with the article when it says that buying an existing home is the better financial move by far. I priced new home construction in my area with 3 different builders and they were at least 30% higher in price compared to an existing home of similar size. And the existing homes I compared them to were not distressed.

rbuell of CA 9:52PM April 23, 2012