Can the purchase of a new home be compared to the purchase of a new car?
A new car loses part of its initial value as soon as it is driven off the lot. Is this also applicable to real estate, and if it is, should you be concerned?
The development and new construction market, for a couple of years now has been sluggish. However, new constructions are now able to access lending from banks and the developers are in full gear with regard to building. Indeed, new homes in Port Coquitlam are coming up and new home builders in Port Coquitlam are taking advantage of this. In San Francisco, New York and other major cities, there are a number of new projects which are in various phases of planning, development, construction and sale. In the country and suburbs, national home builders having large land parcels are getting ready to work on communities of new homes, as evidenced with the new developments Port Coquitlam and the environs.
Of course, the buyers within any market will be making inquiries and comparisons whether to purchase a new home or a used one. Today, buyers are faced with the option of choosing between pre-existing and brand new homes. Some of the considerations you may have when faced with such a choice include;
Generally, real estate appreciates
You will quickly notice from any given chart that the values of real estate basically rise over a period of time. Therefore, do not be too concerned about the resale value of your home in case you can make a commitment of five to ten years and are in for the long haul. In today’s world that is highly mobile on the other hand, it may be much harder to realize any increase in the value of your home if it is sold too soon. It might be advisable to opt for renting in case you are uncertain about your commitment to a new or used house for a minimum of five years.
Is the theory on new cars ever applicable?
You may be thinking that it will be easy selling a home that is 5-10 years and that you will not have any problem. However, you may find that a buyer faced with the option of a used home and a brand new one will quickly opt for the new one if they are able to afford it. Given the two homes therefore, with the same location and floor plans, it is likely that the new home will fetch a higher price. The new car theory, in this case, may hold some truth for the owner of an older home; it may be seen as applicable to real estate as well, that a purchase depreciates the value of the property over time.
The reality here is that you cannot simply compare the value of a new home to your own; it is not like comparing one apple to another. It is important however to put into consideration the original purchase price of your home, even if it is much lower than a nearby newer property. Remember that at the time you bought it, the purchase price was mainly influenced by the fact that the house was new and also the values that are associated with new homes as opposed to older homes. In essence, the bottom line is that even if your home is not worth the same amount of money as a similar new home, the likelihood is that it has appreciated since the time it was purchased along with the greater market.
Maintenance of an existing vs. a new home
Any new home, for instance a townhouse for sale in Port Coquitlam, will have warranties not only for the systems and appliances, but also from the developer. It is likely that a developer who is good will have at least one year standing by his work. This means that in case there is a window that is leaking or a floorboard or tile that is broken, then the developer will want to rectify the problem without charging you. A home warranty will always be available through a 3rd party. However, any buyer of the home that is five years old is not likely to enjoy the benefit of warranties in place from the original manufacturer at the point when the house was built.
A lot of buyers do not want the problems associated with homes that are fifty or a hundred years old. Nevertheless, there is a lot of truth when they say that homes today are not made like they used to be made any more. For example, it would be almost impossible, indeed financially unfeasible for anyone to construct a house in the Frank Lloyd Wright style or an Italian Stick Victorian house. Owning a historic house therefore has some intrinsic value. There are very few such homes and they are set apart by their uniqueness. Any buyer desiring to sell will highly likely find that such a home has more value than other newer, comparable properties. In contrast, if you have homes for sale in Port Coquitlam, for instance you may be selling a two-bath standard floor, two-bedroom plan home, you will be competing with a number of other homes that have been built at around the same time with similar materials. It may be required of you to do something extra for your home to stand out in order to attract buyers.
Let the home be first and investment second
Notice that people do not stop buying brand new cars, irrespective of the fact that each new car loses value the very moment it is driven out of the lot. And it should not stop them anyway. There is, after all a lot that can be said about the extended warranty that comes with the car, and the new-car smell, as well as the feeling of being the first owner. A lot of people spend lots of time in their cars. They perceive it as something that they should be comfortable in and enjoy – as a necessity.
The same concept applies to a home. It is good to know your investment in due time and understand your home’s value; however, you should not be obsessed over it. If you find the home appropriate with regard to your timing and situation, then go ahead and buy it, whether it is a new home or an old one. You are going to spend most of your time there and you will make many memories at your home. It will be the place you will retire to daily after a long day’s work or after a long business trip. It will first be your home then secondly, your investment.
Pacific New Homes
Latest posts by Pacific New Homes (see all)
- Is Buying a New Home Like Buying a New Car? - July 14, 2014
- Understanding the Construction Costs - July 11, 2014
- Defects to Look Out for When Searching for Port Coquitlam Real Estate - July 7, 2014
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