Why New Construction Might Be the More Affordable Option

Why New Construction Might Be the More Affordable OptionSome of our clients would love to buy a new construction home in Boulder, but assume it's out of their budget. The great news is, a new build can often be the more affordable option when you're house hunting. Here's why you might find it easier to purchase a new construction home than an existing one if you want to stick your your budget.

The Cost of Maintenance

One of the most significant factors that makes a new construction home more affordable is home maintenance. When you buy an existing home, it is going to come with varying levels of maintenance needs. Many of these needs are impossible to predict, but even those you can plan for may cost you thousands more per year than a new build. These include things like lawn care and landscaping maintenance or changing the landscaping to something lower maintenance, replacing aging fixtures and systems in the home, and updating areas with typical wear and tear. 

New homes are built with the latest materials and technologies, which means they are less likely to suffer from the wear and tear issues that older homes face. Key systems such as plumbing, electrical, and HVAC are brand new, reducing the likelihood of expensive repairs or replacements in the near future. For instance, the cost of replacing an old roof or updating outdated plumbing can be substantial in an older home, whereas these expenses are virtually nonexistent in a new construction home for the foreseeable future.

Utilities and Ongoing Expenses

New construction homes are designed to meet current energy efficiency standards, often incorporating advanced technologies and materials that help to lower utility bills. Features such as double-pane windows, improved insulation, energy-efficient appliances, and modern heating and cooling systems contribute to significant savings on energy costs. According to the U.S. Department of Energy, homeowners can save hundreds of dollars annually by living in an energy-efficient home. These savings accumulate over time, making a new construction home more cost-effective in the long run.

Builder Warranties

Another financial advantage of new construction homes is the inclusion of builder warranties. Most reputable builders offer warranties that cover various components of the home for a specific period, typically ranging from one to ten years. These warranties can cover structural defects, workmanship issues, and systems like plumbing and electrical. If any problems arise during the warranty period, the builder is responsible for the repairs, not the homeowner. This provides significant peace of mind and reduces the risk of unexpected out-of-pocket expenses.

Renovations and Updating

Unless you are in a rare situation, you're going to want to update or renovate the home you buy to some degree. A new construction home is often an exception to this, especially if it's a semi custom build where you got to choose the features. In an existing home, even if it is considered turn-key, you will likely spend money making it feel like your own by updating and renovating. Even minor updates like painting and changing light fixtures can amount to thousands of dollars, especially if you need to hire professionals to do the work .

Appreciation and Resale Value

New construction homes are often located in up-and-coming neighborhoods with growth potential, which can positively impact property values. As the area develops and amenities such as schools, parks, and shopping centers are built, home values tend to appreciate.

Additionally, new homes with modern features and energy-efficient designs are attractive to future buyers, potentially leading to a higher resale value. Because of this, investing in a new construction home can offer better financial returns over time compared to an older home that may require significant updates to maintain its market value.

Also keep in mind that for some buyers, the price is locked in when construction begins and you will move into a home that has already been building equity. Some homeowners who purchase a new construction home are able to refinance to access equity within just a few months of moving into their new home because of this. 

It's Not Just Us

If you've always heard or assumed that a new home is the most expensive option, it might be hard to believe that it fits your budget. As you ask more real estate professionals, you will find that it's not just us saying this. 

Real Estate expert Bill Gassett of Maximum Real Estate Exposure who has many years of experience selling new construction offered helpful guidance.

"In the long run purchasing new construction can save you money. It is similar to buying a car. If you buy an older model car it is likely you'll have more maintenance because things start to break down quicker. The same holds true with new construction.

Compare buying a 15-year-old home vs. new construction. In five to ten years, there is a good chance you could be needing to spend money replacing the heating and cooling systems. The roof is also going to be nearing the end of its lifespan. These are all significant expenses you'll need to budget for. When buying a new home, one of the upsides is the length of time before you'll need to make these investments."

The only way this is even better than buying a new car is because a home is an appreciating asset rather than a depreciating asset. This means you enjoy the affordability offered by the low maintenance, as well as the great ROI of real estate.

Ready to learn more about buying a new build in Boulder? We can help, so contact us any time to begin your house hunting journey. 

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