Newer Homes in Older Subdivisions
You are looking at a new home that is situated in an older neighborhood and are trying to discover it’s value. There are a few things you need to take into consideration to get an idea of this home’s now and future value:
In some cases, newer isn’t always better. Your home appraisal will almost always come our higher on a new home vs. the exact same resale property. There are older homes that were built with a great deal more quality then newer homes. Some older homes were constructed with materials that would not be used in newer homes due to the cost. For instance, if you are looking at a new home that was built in a neighborhood that consists of old, restored Victorian homes, you’re not going get the same value as these older stately homes. In Victorian times, floors were solid wood, many windows had stain glass and crown molding was an art! A new home built with these materials would be extremely expensive! That said, there are older neighborhoods that a new home could very well be superior to the older properties surrounding this home.
A Premium For New Construction:
Let’s face it, buyers are willing to pay more for a home that no one else has ever lived in before. That is the premium for new homes.
Premium Does Not Have A Long Life:
The premium cost for a new home feel will dissipate pretty quickly. You should keep in mind that any premium you paid for that new home, 2 years ago, may not hold any value in today’s resale market.
An Infill Location:
City or town planning will take land within an area’s environment that usually is open space and give it over to a builder for new construction.
That said, if the home you are looking to purchase is part of an infill project, it might not be the best location. In many cases, the premium locations are already built out. Also, infill plots are usually very small in comparison to the lots older homes are sitting on. Consider a place like Plano, TX: When homes were first built there, most had a great deal of land. New homes now are practically sitting on top of each other due to the lack of space.
Does A New Home Conform With The Neighborhood:
Look at the home your are considering purchasing then look at the surrounding homes. Does this particular house fit in as far as design and size? Does it look a little awkward and out of place? Whether a home fits into a particular neighborhood or not can have a huge impact on it’s value.
Change Within A Neighborhood:
There are many cases where older neighborhoods go through complete overhauls. Older homes are torn down for newer, larger homes. Neighborhoods are being revamped bringing these areas backup by cities or towns for neighborhood revamps. On the other hand, older neighborhoods, such as that Victorian neighborhood, can be on the local preservation list by historic societies and a new home would really look totally out of place.
Ask Pertinent Questions – Do Not Assume:
Many times buyers will automatically assume that a newer home would be worth more than an older home. That’s just not always the case. Ask yourself, how the market sees this property? Down the road, would other buyers want to live in this home in this neighborhood?
Do some homework and see if there are other newer homes and what they sold for. When considering new construction, ask what kind of what kind of comps were attached to the new home. Was a particular home loaded with concessions and credits bringing the home in for a higher cost?
Again, newer doesn’t always mean better, but in some cases it is better.
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