Choosing Between a New Home or ‘Fixer-Upper’? Consider This

By on March 26, 2020

By Jim Perry
Back in the days before personal computers, financial professionals were fond of the term ‘pencil’ to indicate whether columns of figures totaled out correctly. To say ‘it pencils’ means ‘it works. For new homebuyers, a great deal of information is required to ensure that the buyers’ planned purchase ‘pencils’ – especially when choosing between a state-of-the-art new home or a ‘fixer-upper’. Given the individual buyer’s unique wants, needs and circumstances; today the choice to purchase a new home in a new home community can sometimes ‘pencil’ better than the alternative.

Thanks to technological advances, today new homes more can offer a greater value than an existing home because homebuyers can avail themselves of the comfort, safety, durability and security of a newly constructed home at about the same, or lower, level of investment as an existing home over the long run. While mortgage payments will be greater with the higher purchase price of a newly-built home, its lower operating costs mean the homebuyer will have annual costs that are about the same as if they’d bought a lesser-priced, older home with a smaller mortgage payment and higher operating expenses.

This is largely because the structure and components of newly built homes add up to the safest and most durable homes ever made. According to the National Association of Home Builders (NAHB)/Bank of America Home Equity Study of Life Expectancy of Home Components, all types of modern insulation in a new home can be reasonably expected to last a lifetime if properly installed and protected against punctures, moisture and ultraviolet rays. Modern wood or aluminum framed windows last decades if properly maintained. Another example is that with recent scientific advances in paints and coatings, today’s home exterior paint can last up to two decades.

While the life expectancy of a roof depends on local weather conditions and appropriate maintenance, the study found that roofing should last between a quarter and half century, depending upon the materials used.

New homes incorporate ‘green’ or environmentally friendly products or practices into their products and here in the Baldy View Region which encompasses eastern Los Angeles County and all of San Bernardino County, nearly all the homes built exceed industry standards. This means that new homeowners will save money on energy costs while reducing the impact on the environment. Reducing water and energy consumption is a major factor in reducing costs in the long run when considering a new home over an existing one. Today new homes in California use 50 percent less water and consume less than 57 percent of the energy of older homes.

Another key innovation in modern home design is flexibility. For homebuyers whose families will be growing or shrinking or a combination of both over the life of the home, this is an important factor to consider. Today’s designs offer the ability to change with the owner’s circumstances or individual pursuits with options such as creating prep kitchens out of storage areas or transforming unused garage space into full living areas. The ability to customize a home to suit the individual is a major factor in why many should consider a new home. For families who will be incorporating plans to care for aging family members or housing future generations before they fly the nest, customizing floor plan to suit specific needs has limitless value.

So, when planning for the purchase of a new home, consider these long-range factors and you might discover that investing in a state-of-the-art new home might ‘pencil’ better than the alternative.

These are just some of the reasons homebuilders nationwide celebrate every aspect of home ownership with National New Homes Month in April, National Remodeling Month in May and National Home Ownership Month in June to better educate home shoppers, buyers and owners on what will be for most of them the biggest and best investment they will make in their lifetimes.

The BIA Baldy View Chapter seeks to advance the opportunity to attain the American Dream of home ownership. For additional information on homebuying, home improvements or the benefits of homeownership, go to www.biabuild.com on the web.

Jim Perry is Vice President-Operations at Taylor Morrison and Board President for the Building Industry Association (BIA) Baldy View Chapter.