In my area, new homes are on tiny lots, often with steep grades narrow roads and no parking because it’s all infill on lots that were unattractive in the last building wave. I’m not sure the comparisons fully take that into consideration. I’d guess the sellers’ hold is the explanation though because when we were buying a couple years ago, prices were the other way around and we couldn’t figure out why people were rejecting 40 year old homes in favor of these chockablock places. Comps all seemed to just go by number of bedrooms or something.
Well this is the national average and plenty if new homes are built on large lots.
I’m a handyman. New homes are trash. Contractor grade fixtures that will need to be replaced. Everything is as cheap as possible. “Let’s put the water heater in the attic so once it fails it will destroy everything under it.” Let’s use the push to shut-off water lines that will break the moment you decide you want to replace that crap faucet."
Once you live in you will want to spend upwards of 10% of the house value fixing all the crap that the builders did. Get yourself a high end inspector to go through the house with a fine tooth comb and they will find all kinds of code compliance issues that the builders will be liable for. New construction is crap. Most of them aren’t built to last the length of a mortgage.
When you buy an older home you know there are things that will need expensive repairs. I bought my house knowing that 40 amps would get us by but it was going to cost $20k to get us current. The HVAC was on its last scheduled year of life. The roof was on its last scheduled year of life. Same for the water heater. The septic passed an inspection when it shouldn’t have and I dropped $7k four months later to replace it because it collapsed. The AC hasn’t worked in 3 years. I need to patch parts of the roof. The water heater died but I was able to replace it myself for a quarter the price of someone else doing it. But this house was 90k in 2017. I knew what I was buying. With new houses you expect things to last. But they don’t. They are built to sell, not to last. And the more expensive the new house the worse the failures get. Don’t even get me started on modern McMansion roof design.
I bought my house knowing that 40 amps would get us by but it was going to cost $20k to get us current.
Wait what? Maybe I’m too European to understand this, but 1x40A at 110v is basically nothing, right? 4400watts is barely a electric kettle and washing machine at the same time.
Also how would it cost 20k to upgrade? Couldn’t you just fix 90% of the problem by keeping most of the house on one group, and only rewiring, say, the kitchen and laundry area to a different group?
EDIT: also, hehe, current
40 was enough 84 years ago when it was built. We never really had a problem unless a lot of things were on and we tried to use the oven because it would take 40 minutes to preheat.
We upgraded the panel, replaced every outlet with GFCI outlets because none of them were grounded. We added a new sub panel in the garage, removed a fire hazard sub panel that was for the water heater. We added a new line and sub panel in a shed. So it was way more than just an upgrade.
Regardless new homes have warranties and they’re cheaper!
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Does this have anything to do with new homes being built way out in the middle of nowhere while everybody wants to live close to things?
That’s part of it but I’ve been finding new construction is cheaper pretty much anywhere compared to a comparable home.
A lot of people have 2nd and 3rd mortgages on their homes and need to sell at their all time highs Builders don’t have this problem.
So… older homes are… cheaper?
Flipped. Houses are in essence bottled / shelved inflation. Purchasing a house aligns you with inflation until you attempt to sell (at which point you realize that shelved inflation and generally pass it on to the buyer.)
Home owners are the least likely to want to get burned by pullbacks in this transaction so they will typically resist negative price movement when listing. The same goes for valuations being inflated as well as a host of other dubious practices. So basically we are artificially holding a price on part of the sell side market while builders are trying to sell homes and the prices are falling to entice new buyers (… which still aren’t buying.)
When the price falls too much: homeowners flip and become ‘motivated’ (see big short scene with the realtor.) This becomes precipitous and the bottom falls out on the market.
Huh. Looks like this also happened around 2007. The housing market crashed in 2008. I wonder if these are correlated
values have already dropped 20-30% in certain counties like in Florida and Arizona, but others are too inventory tight for now.
