New Homes or Resales? Which Is The Best Value?
Las Vegas is definitely in a buyer’s market state so now is the time to buy. But which offers the better value: new homes or resales? My answer is that it depends on what you needs are. Below I compare some important considerations when you are considering a new or resale home.
| Factor |
New Home |
Resale Home |
| Home condition | New homes are always in good condition and everything works. | Unknown. The condition of the home is dependant on how the owner maintained the home. |
| Incentives | Incentives change frequently (usually on Thursdays) and are usually subdivision specific; a subdivision a ¼ mile away by the same builder will likely have totally different set of incentives. Note that the best incentives are for the builder’s standing inventory. | Generally, the only “incentive” on a resale home is the price. However, there are many homes listed at well below market value and thus you would have instant equity in a subdivision with a proven track record in a desirable location. |
| Location | New subdivisions tend to be built on the outer edges of the city which are remote from central Las Vegas. thus, commute times and such may be more of an issue. This can be especially true in areas where even the basic infrastructure like roads are still under development. | Since resales are available in every area of the city, you can usually select a location that is best for you and your lifestyle. |
| Choice | With a new home, you can generally have it your way. Colors, flooring, appliances, etc. However, the best prices are on standing inventory where all the selections have already been made. | A resale generally is as it is. |
| Subdivision stability | With new subdivisions, you do not know if the subdivision will be maintained or what it will look like in a few years. | With existing subdivisions you know what you are buying into. |
| HOA Fees (home owner association fees) | While the builder establishes the initial HOA fees, there is no track record and fees can go up. | HOA fees in existing subdivisions tend to be stable. |
| Home durability | All homes look great when they are new but how will they look in a year or five years? Also, the soil in some areas of Las Vegas is unstable and you could have settlement problems. These types of issues don’t show up for a few years so the builder’s track record of support and their home warrant are very important.. | In established subdivisions and with Nevada’s disclosure laws plus a good home inspector, you generally know what you are getting. Plus, neighbors are an excellent source for subdivision issues. So, I feel resales tend to be lower risk since more is known. |
| Resaleability | If you anticipate reselling the home in just a few years, a home in a new subdivision may be harder to resell if there are new homes available at similar prices just down the street. | Established subdivisions have general patterns as to how long it will take to sell a home. I have the statistics for almost every subdivision in Las Vegas as well as the appreciation rate so resales tend to be lower risk since more is known. |
| Lot size | Most people are surprised by how small lots are in Las Vegas. Land is very expensive because there is very little buildable raw land remaining. Thus, to keep homes affordable, builders continue to build on smaller and smaller lots. In some cases they have even gone to three story homes. | In general, the older the subdivision the larger the lot. So, if lot size is a key factor, resales are the way to go. |
| Infrastructure | Infrastructure is usually lacking around new home developments. Roads, traffic signals, highway access, gas stations, grocery stores and all the rest of the infrastructure lag behind new developments by several years. | Existing subdivisions have usually been in place long enough for infrastructure to have caught up. |
| First year cost of ownership | A new home typically does not include a lot of things that a resale home usually includes. For example, most new homes have little no or landscaping. Depending on the lot size and your tastes, landscaping can range from $5,000 to $50,000. Window treatments, appliances (such as washer and), storage cabinets, ceiling fans and many other items will likely have to purchased during to first year. All this adds up. | Window treatments, landscaping, appliances and much more are generally included in a resale home. |
| Pools | The cost of a typical pool is about $30,000. And, unless the price of the pool is included in the home mortgage, the interest rate may be higher and shorter term. | The resale price of a home is usually increased by only about 30% of the cost of the pool. For example, a $30,000 pool will typically add about $10,000 to the resale price of the home. Thus, if you are looking for a home with a pool, resales may be the way to go i. |
| Appreciation | Many people believe that new homes appreciate faster in the first few years than existing homes. I don’t know if this is true. I feel that it is location/subdivision specific. | Existing subdivisions have track records of appreciation. So, you know what you can expect based on what has occurred in the past. |
| Ease of closing | Easy – if you use the builder’s lender. | Not difficult but more prone to “bumps” and surprises. |
In summary, your specific situation dictates whether a new home or a resale home is a better value.
If you are looking for a home in Las Vegas, new or resale, I hope you will call upon me.
Best regards,
Eric Fernwood
RE/MAX CENTRAL
Cell: 702-358-8884
Eric@ISellLVHomes.com
www.EricFernwood.com
Posted by Eric Fernwood 
The chart at right is from a national study and shows months on market vs. the final sales price. While the specific percentages differ for individual markets and subdivisions, the message is clear: the longer a home sits on the market, the lower the final sales price due to buyer perception.
