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New or Used...What are the Decision Factors? Main Boise Home Design
Help us gather personal opinions...What goes into the decision to purchase a new home versus an existing home?

Just out of curiousity:  What are the factors that influence folks buying a new home over an existing home?  Aside from new versus used condition, is it amenities?  neighborhoods? Help us out and give us your thoughts?

 

Echo Garrett
Triad Distributing NW, Inc.  

 

 

http://www.triad-dist.com

Premiere Supplier to the Treasure Valley Building Materials Industry

 
Posted by Echo Garrett at 3/8/2008 11:31:00 PM
Comments (13)
Re:New or Used...What are the Decision Factors?
Price/location..

beyond that I perfer used at this time. I think in the bubble years, quality went way downhill! Labor was tight and many builders cut corners. Further I would be very scared of new developments because recent buyers are more likely to foreclose, rent or take on tenants etc... Older neighborhoods have more established equity. Finally, I believe we will see some HB's go under in the valley and I would be very reluctant to contract at this time with little recourse potentially
Posted by on 3/9/2008 8:05 AM
Re:New or Used...What are the Decision Factors?
It is always about value but also perceived intrisic value. This includes things like relative location (Eagle vs Caldwell), schools, commute distance, subdivision amenities and much more. Then there are motivating factors like the abaility to design and build your own home. This is a sense of pride for most and and the deciding factor. Let's face it a resale home is generally less expensive then building new. A home is an emotional purchase and the intrisic perceived value is subjective but provides added valley that is hard to measure. For example why would someone buy a new car when they can be slightly used for less. Pride, greater perceived value and pride!
Posted by on 3/9/2008 8:39 AM
Re:New or Used...What are the Decision Factors?
Also, everyone likes to show off their home but if your designed it you are much more proud. You brag about all the cool stuff you did in terms of floor plan, interior design, landscape design, colors, granite cabinets, etc. Building a home, though not easy, is very rewarding. Plus most ladies enjoy picking out new stuff. That is why many homes go over budget during construction.
Posted by on 3/9/2008 8:45 AM
Re:New or Used...What are the Decision Factors?
Perceived Value! Up until mid 2006 buyers perceived that new construction was their best bang for their buck. But as prices soared, and quality and amenities dropped the perceived value aspect did a 180. Now that lot prices, labor and materials have dropped and quality, community and amenities are on a rise the perceived value issue will again do a 180 back to new construction. Some developers saw this coming and designed their communities with high amenity packages. The builders in these communities are now able to bring to market new homes that are highly amenitized and priced less than existing homes. Even in soft markets there are segments of that market that are bullish, you just need to find them.
Posted by on 3/9/2008 9:14 AM
Re:New or Used...What are the Decision Factors?
Scott made an excellent point. Perceived Value: It's all in the details! We see this everday in the hardware industry. Questions like Mortised latches, Square or Radius Hinges and Strikes, Faucetry that matches bath that matches trim, Decorative clavos nails and the like all contribute to the details and thus, the Perceived Value!
Posted by on 3/10/2008 7:44 AM
Re:New or Used...What are the Decision Factors?
In today's market it is money and new construction is more expensive. Also most people that buy new homes are from out of state.
Posted by on 3/10/2008 8:20 AM
Re:New or Used...What are the Decision Factors?
It is just new. New carpet, new appliances, new cabinets etc. Buying new is just seems better.
Posted by on 3/10/2008 11:32 AM
Re:New or Used...What are the Decision Factors?
Consider this. There is a storm brewing on the horizon that will change the perception of value. Lets assume that the definition of value is - "give the customer what they want for an agreed fair price"
The question is what does the customer want? Does the customer know what they want? If the customer doesn't know its available they certainly wont ask for it. If the customer doesn't think they can afford it, they may not ask for it. So it seems to me that value is many times tied to awareness and affordability. Let me give you an example: Ask yourself this. When and how did granite countertops move from the exclusive luxury market into the starter home market? The distributors and installers of granite saw the viability within our treasure valley market to come here and compete for our builders and buyers business in all price ranges- I would say they helped to create the demand. Competition for that business drove pricing down, as price went down awareness went up. So on and so forth and back and forth until granite became mainstream. Thats the simplified version but it leads into my point-
So were is that storm Im talking about and when is it going to get here. I believe its here. Its called the "GREEN MOVEMENT" I dont think any of us can deny that public awareness of this issue is front and center at this point. You may not have bought into it yet, but you can't deny its here. You may be asking "Why should I pay any attention to this so called green movement, and whats driving it anyway?" The answer is the COST OF ENERGY along with numerous other factors that are not quite as definitive at this point.
So how does all this tie into our discussion of new vs. used? I believe this "GREEN MOVEMENT" will create a shift in the buyer perception of value. Mechanics -(or the way your home is constructed) will begin to have tangible benefits that people will pay attention to. The new home market will have a definite advantage in applying new building technologies that will dramatically decrease the cost to own and operate the home. Used homes will still be able to apply many of these technologies but the cost to retrofit will be higher making the payback longer. Try to take your 67 Mustang and turn it into a Hybrid, if your in the category of people who dont want a hybrid or care about a hybrid, your probably wont give this post much merit. Your tech savy future homebuyer on the other hand will probably pay more attention.
As builders get better at there marketing strategies of these technologies, buyer awareness increases, energy costs continue to rise and the use of these technologies becomes viable and affordable - just like the granite countertops - it will become mainstream. The innovative builders will pick up on it first and the rest will follow or get out of the way. Bond Campbell


Posted by on 3/10/2008 3:06 PM
Re:New or Used...What are the Decision Factors?
Bond, I absolutely agree with you! With the USGBC's current LEED Program, it won't just be builders and contractors that begin to market these technologies. I believe we will see a real act of "pull through" created by the manufacturers and suppliers, as homeowners are educated and ultimately making those decisions.
Posted by on 3/10/2008 3:19 PM
Re:New or Used...What are the Decision Factors?
The only time I ever lost money in real estate was on a new condo purchase. It wasn't a big loss, but I found a beautiful vintage home in a great neighborhood, and had to sell short.
Most young people see the value of buying a house in need of TLC, and even established buyers can benefit from stretching into a home in need of renovation. Personally, that is where most of life's wealth comes from...investing in sweat equity. It isn't always the easy way out, but a great way to earn money while living life.
I belieive there is a huge market in retrofitting homes that are not energy efficient. These homes also afford the owners creativity in use, reuse and recycling of amenities in existing homes. I used the tile from an old bathroom to create mosaics in the renovated bathroom. I used drapes from the bedroom for a french country bath curtain. We donated old doors, a fire place insert, glass sliders, old light fixtures and raw materials to Second Chance Building Supply in Boise.
Reduce, Recylce, Re-Use, and Re-think!
Katy Slater
208-340-1107
Idaho Blue Insulation
Posted by on 3/11/2008 7:12 AM
Re:New or Used...What are the Decision Factors?
Katy,
My applause to you for your abilty to "RE-THINK" While your energy is moving you towards the more healthy, I think our consumeristic society will take some hard lessons as a whole to move in your direction. All too often the responses I have gotten are that people work too hard at building their wealth to work that hard at home as well. Thus, we are seeing the surge towards thriving new construction once again in the Treasure Valley! I look forward to the day when the two worlds meet more often than not.
Posted by on 3/11/2008 10:42 AM
Re:New or Used...What are the Decision Factors?
Katy,
No question about it- there is a HUGE! market in retrofit. Five years ago I did a fairly extensive remodel on a very old house on Harrison Blvd. A couple of years later a client I was building a new home for bought a fixer- upper on Irene St. in the North End and asked if I would give guidance to his son while he remodeled it. I must say I enjoyed the change of pace. I think every builder who gets the opportunity to get involved in a remodel project on something thats over 100 years old should jump on it.

For me, It was an eye opening experience. It was like traveling back in time. The 2x4's were 2" by 4" not 1.5" x 3.5"- when did that change? The insulation in the walls consisted of old newspapers and cardboard. The single pane windows were so drafty when the front door slammed shut all the panes in the house would rattle. I gives me some insight into a few of the questions that keep coming up when I listen to guys like John Tooley speak. He spoke last week at the Northwest Energy Conference. He asked all the folks in the room if they thought a house could be built to tight. I was surprised that many of them said yes.

Reduce, Recycle, Re-use, and Re-think- absolutely! There is no excuse not to. Let me add a couple more- DURABLE and SUSTAINABLE- Build it right the first time and you will REDUCE the frequency of the the need to RECYCLE thats RE-THINKING. Bond Campbell
Posted by on 3/11/2008 12:28 PM
Re:New or Used...What are the Decision Factors?
Used. Why buy new when you could spend WAY less updating an old home, and watch it all come together. That is satisfaction. Homes now days are not half the homes the older homes are. They are cheaply built, not as energy efficient and most are just too plain. Use the money you would save and make your desired updates. I am talking about hardware, locks, drawer pulls bath hardware etc.
Posted by on 8/25/2008 2:44 PM
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