Buying New Home vs Old Home

[dezmarez]

Debating which route to take,

New Home construction vs Existing home in established community.

Any input would be nice to pros and cons of either.

Edit:

Also want to ask how appreciation goes on properties...

for new home, as construction goes up around the property, and more ammenities are constructed the property value will go up

and for an older home,
im assuming that the appreciation is steady but wouldnt return as high of number...

these are just assumptions..

if the real estate people could chime in that would be great as well!!

[Cos]

New home:

- You have to deal with issues not being corrected.
- Can take a long time to build.
- Usually more expensive.
- You can upgrade and change lots of things
- Can pick your colour.
- May have to deal with new construction in the neighborhood.

Used home:
- Stuck with the layout
- Stuck with the colour, carpet, etc unless you pay lots.
- Used floors, walls, paint, carpet can be a turn off.
- Appliances are old and more likely to fail.
- Cheaper
- Established sub-divisions or communities
- Usually the 'bugs' have been worked out.
- Usually get more ammenities in the house (garage door opener, finished basement, etc.)


We bought a 6 year old town house.

[baygirl]

You could always go for a remodelled home in an older neighbourhood. I live in an older neighbourhood, and I like the fact the houses are not cookie-cutters of each other, there are trees, and a mixture of neighbours. The newer communities tend to be mostly young couples/families.

[Kloubek]

Baygirl has some good points. As does Cos, but I STRONGLY disagree with his thought on price.

When we were looking for homes in our price range, the older homes were smaller and around the same price. Add to that the fact they a) don't have a warranty, b) Require remodelling in order to be up to the "look" of a new home c) Follow OLD building codes, while newer homes are up to date with requirements, and d) Already have significant wear. Shingles will need to be replaced sooner. Hot water tank sooner. Furnace sooner. etc etc.

Selling my townhouse was a pain (I did it myself) and it did add some concern that we had a deadline with which to get rid of the property. However, that hassle was by far offset by what we got with a new house.

Just don't forget the extras if you build. You will need to landscape. Window coverings. Maybe appliances. Maybe a deck. These things add up, so make sure you include them when assessing the cost of a new house.

Looking back, I am 110% sure we made the right choice by building. Our neighborhood rocks, and it will only get better with the addition of new shopping in the area - which continues to increase.

We've already made about 50g in value, and we've only lived in the house for 2 months. (Granted, the market has improved since we originally signed)

[HRD2PLZ]

A lot of it comes down to personal preference. When I bought my house, I was looking for something in an older, established neighborhood. I find a lot of the new neighborhoods too far out for me. However, I knew I'd have to set aside a pretty healthy budget to remodel the house to the way I would want it.

Both have their pro's and con's. Generally, a re-modeled home in an established neighborhood comes with a pretty hefty price tag.

[lint]

^^ Hi Trev

[barmanjay]

Future appreciation is anyones guess as to what might happen. An that goes for any neighbourhood - new and old.

In an established neighbourhood you can almost see the direction some communities are going. In brand new, it's almost a gamble.

Communities/areas that have started,you can almost see the direction of the development.

One of the best things to do, is to just go out and take a look at what your budget can get you in the whole spectrum. From that you can weigh what is most important for you once you've seen all options.

I took Kloubek out to see everything in the areas he wanted and in the end he decided to build - in which i need to come for a beer and see the new place!

Same should go for you,.. go out with someone you feel comfortable with an see all your options.

At least see the best of all areas in your price range before you make a decision.

[Oz-]

You could also buy a new home in an older neighborhood. For me the largest trade off for building new in a new community is the commute. Right now my commute is about 15 minutes on the bus each way. No way I could handle a 1 hour bus ride each way from the sticks in McKenzie.

[C_Dave45]

Here's one point to consider:
with a new home...any increase in value will only be due to market and land value increase.
whereas if you buy an older house, especially one that can use some "updating" then you will gain quite a bit of "sweat equity" in it by fixing it up yourself, AS WELL AS any increase in market and land value.

I bought a house built in '74. SOLIDly built, I might add. All the cabinets are made from plywood, not particle board, things like that. I totally did the inside and outside over the course of 3 years. I bought it 2001 for $274...its now appraised at close to $600. If I had bought a brand new house at the same time for 274....I doubt it would be worth the same as mine is now.

So if your good at doing a lot of reno work yourself..I'd say go for an older home. If you don't want to do any work at fixing up...go with new.

Plus new homes and new subdivisions are years of gravel, dust, and no trees.

[Cos]

Originally posted by Kloubek
Baygirl has some good points. As does Cos, but I STRONGLY disagree with his thought on price.
)

you could be right about price. My only knowledge of it is that townhouses up in Coventry were 285 with out a garage and what I would consider comparable. We bought our place for less than that with a garage. Of course you factor in condition and design changes in 6 years but still saved probably 35/40k by buying our place second hand.

To be fair we could be the exception, not the norm as someone has to be buying the new places.

[sputnik]

It all comes down to lifestyle.

My wife and I recently moved from a new 2100 sq ft house in Auburn Bay to an 1100 sq ft 1956 bungalow in an established community.

We realized after moving into Auburn Bay that we really didnt NEED 2100 sq ft and we missed the ability to walk places. In the suburbs you are pretty much forced to get in your car and drive to get anything or go anywhere.

Our new community has TONS of amenities within walking distance, established parks and schools and huge trees everywhere.

[ExtraSlow]

Originally posted by sputnik
It all comes down to lifestyle. This.

If you like the lifestyle out in in the corners of Calgary, you can get more home for your money, and a bigger yard. If you like the inner city, you pay more.
If you do decide to go inner city, there are a lot of infills in some areas, and they can get you some of the advanages of a suburban home, like high ceilings, new apliance etc. Not cheap though . . . .

[R-Audi]

Its all about lifestyle choices...

~2yrs ago I was weighing out my options for moving out of a DT condo.. Do I move down south with a new bigger house or stay central in something smaller and older.
That being said we moved into a 1910 build with recent rennovations and couldnt be happier.. although we are now looking for something a little bigger. (Its 2 bed, 1 bath, 1200sf)

[dezmarez]

this article makes me want to wait on either option!!


http://www.globaltvcalgary.com/money/Unaffordable+homes+seen+setting+dive/2748820/story.html

[Sasuke_Kensai]

To be fair, that guy will spin EVERYTHING in his favour, ie. the sky is going to fall.

I do hope the sky falls a bit so I can make more of a down payment %, but not really seeing much hope of that. Even if the fundamentals for the housing market aren't there right now, it seems people are willing more than ever to sacrifice a high amount of pay to get in the market to keep up with the Joneses, or for fear of missing another upswing. Hell, the Vancouver housing market against all odds keeps rising even though it's massively inflated.

[masoncgy]

I love older homes... they have way more character than a new build, are found in mature & established communities and when picking up a fixer-upper, offer an opportunity to make a good return.

You pay a whole lot of mark up on a new home.

When I bought my house in Sandstone in 2004, I was also considering buying nearly the same house in Panorama Hills... but the $75K price difference put me off... plus all the houses look exactly the same and there are no trees or anything to break up the endless cookie-cutterness that makes up a new community.

I ended up buying my house for a steal and doing all of the renovations myself, and it has more than doubled in value since that time.

Location matters too... I'm a 2 minute walk from the #3's main turn around and a quick drive to Deerfoot, Centre St, 14 St, Country Hills Blvd, etc...

All in all, it was a good choice. In fact, if I ended up staying in Calgary I would sell and move to another place in Sandstone, Macewan or maybe into the nicer parts of Beddington. I love the area.

[Kloubek]

Originally posted by sputnik
We realized after moving into Auburn Bay that we really didnt NEED 2100 sq ft and we missed the ability to walk places. In the suburbs you are pretty much forced to get in your car and drive to get anything or go anywhere.


This is also true. In Kincora, we have a fair amount of shopping down the road from us. But it is not realistic to walk it - especially if you live deeper in the neighborhood. Whereby older communities at least usually have a corner store at the end of the block...

[Cos]

Originally posted by dezmarez
this article makes me want to wait on either option!!


http://www.globaltvcalgary.com/money/Unaffordable+homes+seen+setting+dive/2748820/story.html

That guy is a nut job. Just seems like a bored ex-politician.

[Kloubek]

"For people thinking about selling, Turner's advice is: "You're probably not in your lifetime going to find prices at this level. So be realistic and go on the market."

This statement by itself shows me the guy doesn't know what he is talking about. In 1975, the average price of a new home in
Canada was $39,300. By a couple of years ago, it was $315,461... almost TEN TIMES. Do I expect in another 25 years houses will be worth three million? Well, no. But to think they will be worth a million I think is being somewhat conservative.

While I do not question a potential downward curve in the reasonable future, imo that is the product of natural market fluctuation. And it will rise again two or three years after that too.

The fact is, OP, that you need to look at the home as a long-term investment if you are concerned about making money on it. (By all rights, you are best off instead thinking of it as a "home") Yes, there will be a downward turn at one point. But while it is turning down, you are still putting your money into it and paying off the mortgage. Then when it goes back up and if you wish to sell, you will make money at that time. And while all this is happening, you have a nice, stable place to call home.

[Oz-]

For those debating the newer/older community, there are some points touched in a mockumentary called Radiant City. Take the time to watch it if you can, really touches on the effect the new suburban homes have on the "community" feel.

[bspot]

If we see gas prices taking sharp increases in the future again I wonder how well stuff at the edge of the city will hold.

[Cos]

Originally posted by bspot
If we see gas prices taking sharp increases in the future again I wonder how well stuff at the edge of the city will hold.

It hurt airdrie/okotoks but not really Calgary Burbs

[speedog]

OP - there is no right answer. My wife and I have been home owners for 19 years now - first home was a small inner city 1935 bungalow. Made great money on that house in the 4 years that we owned it. Second home, bough in 1996, was a 1955 bungalow. When looking for the second home, we initially looked at older (teen) Victorians in the inner city and also new 2 stories in MacKenzie Towne and the deep north and decided that stairs just weren't our thing and quickly decided that an older bungalow would be best for us. 15 years later in the same house now which has almost quadrupled in value and we're still loving our older neighborhood. Close to lots of things including all three levels of schooling within 5 blocks, an outdoor pool 2 blocks away and wonderful, developed and mature parks right on our community's doorstep. The sense of community where we live is well established also and crime is relatively low too.

On the flip side, some new communities have schools being built in them right now while others wait sometimes a decade or more for new schools. Neighborhood convenience stores within a 5 minute walk - almost non-existent in a lot of newer communities. Almost everything you'll need to shop for will include a drive. But you'll often get into a nice home for quite a bit less.

For us, we'll never be in a new neighborhood - will probably be in this house for another 15-20 years. But older neighborhoods have their problems - we've watched vandalism become more of an issue. Decaying infrastructure (roads, sidewalks, sewer) is an issue and the loss of trees due to old age is now becoming a concern. Really, there is no right answer - all of our relatives in Calgary live in much newer houses/communities and love where they are and could never see themselves living in a 1400 square foot bungalow like us with our three kids. And for us, we could never see ourselves in the burbs - the ability to have our selves or our kids walk to school or the outdoor pool or the outdoor rink or the library or the corner store is priceless to us.

OP, ya gots to figure out what's important in your life right now and for the future amount of time you visualize you'll be staying in this house. Write all of this down and things might become a bit clearer for you as to whether or not you'll want to be in a new or older area and whether not that'll be in a newer or older home. Also, not one of us will have the right answer for you - just opinions.