Should You Buy a New or Existing Home?
Contrary to what some believed at the beginning of the shelter-in-place order, residential housing has flourished. And despite the screeching halt in the economy earlier in the year, home values have appreciated, and buyers are popping up all over California! Home builders are seeing a flood of applications for new home purchases which far exceed the rate they saw before the pandemic.
Chairman of the National Board of Builders, Chuck Fowler, had this to say:
“The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs…Housing has clearly been a bright spot during the pandemic…”
Some of the reasons buyers give for buying new, are the energy-efficient options, lower maintenance, customization, and warranty options. In addition, with a new home, there are usually no changes to be made after moving in. Because of this work-from-home world we live in today, the least amount of disruption is essential. A move-in-ready, brand-new home can look very appealing.
The existing home sale market, too, has gained steam after the bottom fell out immediately following the shutdown. We have seen it come roaring back. Last week, NAR released its Existing Home Sales Report, which stated that month-over-month sales increased by 24.7% setting another record for the category. Lawrence Yun, Chief Economist for NAR, explained it this way:
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days. With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”
Options available to any buyer in California, when buying an existing home, include the ability to negotiate with the current homeowner on price, something that is rarely available with a builder. Then there is the assurance of having an established neighborhood. Buyers like to know the character of a neighborhood before embarking on a move, for example, is it family-friendly? Finally, there is the matter of timing. With an existing home, you can move in based on the timeline you agree to with the sellers, a luxury you do not always have with a builder.
As a California resident, whether you choose to buy a newly built home or one that is established, there are pros and cons to be considered. And, living in counties in Southern California can differ greatly from those in Northern California as regards to being more rural or more urban living styles. Either way, you will most likely have to get some financial assistance.
If you find that you do not qualify for a conventional loan, give Sun Pacific Mortgage a call at 707-523-2099 and discover the range of programs available to you with a hard money loan. Whether you just miss qualifying or have credit issues, we have a solution for you.