New-home sales reached a seasonally adjusted annualized rate of 298,000 in July, down from 323,000 last year, and a far cry from 2005, when 1.28 million new homes were sold, according to the Census Bureau and the Department of Housing and Urban Development.
Still, buying new does have benefits.[pullquote_left]“There’s also the advantage that if you buy a home today, that has energy features that will be worth more down the road, when the market recovers,” [/pullquote_left]
Despite a likely higher price tag, a home builder will say that you’re buying a better product when you buy new. For one, it’s a home designed for the way Americans live today, maximizing the usability of space and offering amenities that speak to modern needs, such as big closets. Plus, new homes are built to be more energy efficient.
“It’s appealing to people who are concerned about energy costs in the future and the longer-term efficiency of the home,” said John K. McIlwain, senior resident fellow for the Urban Land Institute, a research organization focused on land-use and real-estate issues.
“There’s also the advantage that if you buy a home today, that has energy features that will be worth more down the road, when the market recovers,” he said.
When buying new, there aren’t the questions of deferred maintenance that can come along with existing — and especially distressed — properties that have lingered on the market for a long time, said Stephen Melman, director of economic services for the National Association of Home Builders, a trade group for the home-building industry. “In general, anything that sits there has to be in worse shape,” he said.
And let’s face it: Some people covet new homes simply for their “newness.”
Buying new “has become a deep part of American culture,” McIlwain said. “We built an economy around having to replace everything every two to three years. Think of Apple: It is built on the basis that they have a new toy out for us every year or two.”