As you search for a new place to call home in Chicagoland, you’re sure to run into some important decisions — including whether or not you’re more interested in purchasing a newly constructed home, or a previously owned property.
Recent reports from the National Association of Home Builders (NAHB) indicate that builder confidence is high, with new home sales, housing starts, and building permits all increasing throughout 2020, according to information from the NAHB and data from the U.S. Census Bureau’s Monthly New Residential Construction Report.
At the same time, buyer preferences are shifting after months spent at home during the COVID-19 pandemic, with more space and updated amenities coming in high on buyers’ future wishlists.
In its 2019 Profile of Home Buyers and Sellers report, the National Association of REALTORS© (NAR) found that about 13 percent of buyers chose new homes, with 87 percent of buyers purchasing previously owned homes.
Ultimately, when it comes to making the choice between a new construction or an existing home, it all comes down to your unique wants and needs — including the home features you’re looking for, the location you where want to live, and your budget.
Here are four important questions to ask as you weigh the pros and cons of new construction vs. existing housing:
How Do You Want to Put Your Mark on the Space?
How much of a say do you want to have on the floorplan and finishes of your home? With a new build, you may be able to put in requests and modifications if you are involved in the design phase of the construction project. If you opt for a custom-built home, you can even go so far as to completely customize everything about your home, from the layout to the lighting.
However, purchasing a newly built home that has already been finished might limit your options for input. New construction homes are generally considered to be turnkey, which means that they offer less to do in the short-term. While this is a great fit for buyers looking to move in quickly and seamlessly, it could be a downside for buyers looking to stretch their DIY muscles and take on some projects. An existing home could offer more flexibility to take on upgrades and renovations and change things out to your specifications — or your options for improving the home could be limited, based on the design of the house, the materials used in construction, or even the location of the property.
Whether you’d prefer a home with room to grow or a completely turnkey property, it’s important to work closely with your real estate professional to determine what you’re looking for, and narrow your search on the properties that will be the right fit.
What Home Features Are You Looking For?
According to the NAR’s 2019 Profile of Home Buyers and Sellers, heating and cooling costs “were the most important environmental features” for recent buyers, “with 85 percent finding these features at least somewhat important.”
If you’re looking for greater energy efficiency and smart home features, you may prefer to concentrate your search on more recently built homes, which are more likely to feature brand new, energy efficient appliances and environmentally friendly construction features such as modern windows or a new roof. As a result, new construction homes may offer homeowners lower maintenance costs, with lighter utility bills and fewer repairs to take on.
On the flip side, existing homes may be less “cookie cutter.” This gives new buyers the chance to make their mark on the home, or find one with quirky details that will match their personality. Here in Chicagoland, older homes are more likely to include charming vintage details like built-ins, original flooring, and one-of-a-kind architectural finishes, making them a great option for history buffs, architecture lovers, or anyone looking for a home that stands out from others on the block.
What Type of Neighborhood Are You Looking for?
As with so many real estate decisions, finding the right home might ultimately come down to location. Specifically, choosing between an existing home and a new construction might mean making the choice between a more established community or a new development.
A more established neighborhood may feature more of a community feel, while new developments may offer competitive amenities such as community gyms, parks, and pools. An older community may boast more mature trees and nature, while a new development may offer easier access to public transit.
It’s also important to keep in mind that Chicagoland is an area where markets change not just from neighborhood to neighborhood, but block by block. The types of inventory available are likely to change from location to location. For example, older sections of the city are less likely to have any new construction homes for sale, while transit-oriented developments in the suburbs may boast more newly built properties.
Getting a feel for a new neighborhood is an important first step in finding your next home. As you focus your home search, your real estate professional can help you research not only local market trends but also the features that make each community stand out — from schools, to nightlife, to local attractions and history.
How Will Your Budget and Timing Impact Your Search?
In finding the home that will be right for you, it’s important to talk with your real estate broker to set realistic expectations about your budget and your timeline for buying a home.
For instance, new construction homes may cost more upfront, but may ultimately help you save more from month to month thanks to lower maintenance and utility costs. Indeed, according to the 2019 Profile of Home Buyers and Sellers report, 39 percent of recent buyers who purchased new homes “were looking to avoid renovations and problems with plumbing or electricity.” Meanwhile, buyers who purchased previously-owned homes “were most often considering a better overall value.”
At the same time, it’s also possible that a previously owned home may offer buyers more room to negotiate. Broadly speaking, developers are focused on recouping specific costs for materials and construction, while existing homeowners want to secure the best deal possible. This may make them more flexible in negotiations, or more willing to hear a competitive or creative offer.
Similarly, it’s important to think about your personal timeline as a buyer. Custom-built homes and new construction projects can take months or even years to complete, which may not be feasible if you need to move within a few weeks.
Looking for insights as you start your home search? Your real estate professional can help you consider all of the factors that go into making such a significant investment — from making the most of your budget, to considering long-term prospects such as neighborhood trends and changing buyer preferences.
The Market Is Moving — If You’re Ready, You Can Too
During this extraordinary time, the professionals at Baird & Warner, Key Mortgage, and Baird & Warner Title Services are here to help homebuyers and sellers achieve their biggest real estate goals, while making the process easier at every step of the way.
Please rest assured that while we are instituting the CDC’s health safety and prevention protocols across all our businesses and office locations, we are still operational and ready to continue serving you.
Just starting out? Your Key Mortgage loan officer can help you get an airtight preapproval, so you can move forward with peace of mind. Think you’ve found the right house? Baird & Warner Title Services will do what it takes to help you make an offer and close with confidence, with some of the first 100% contactless and remote closing options in the state.
At Baird & Warner, 165 years of history have taught us how to overcome even the most adverse conditions. We’re by your side — no matter what.