Have you been searching for a new home over the past couple of months? If so, you have probably noticed that most of the homes listed are not new. A recent survey claims that almost 71% of single family residences were constructed before the 1990s. Since there are so many older homes, almost 80% of sales comprise of these.
Industry experts believe that new homes have gone down in numbers because of the market situation. Ever since the housing bubble, home building has been slow, and there are still plenty of developers that are not at all eager to start or work the same way as they used to in the past.
According to the survey, new homes are being constructed at a rate that is 40% less than the average values noted in the past. Also previously, the industry just used to focus on single family homes, but now multifamily homes are also being considered. Another reason is the fact that individual buyers just have not had access to new single family homes because most of them are being taken up by landlords for rental purposes. This trend has reduced the levels of the already low inventory, which is keen on breaking even more records than it already has this year.
The survey also studies home prices. According to the results, older homes are sold at 9% reduced rates compared to prices of the new homes in the same neighborhoods. In areas where the percentage of old homes is higher than average, the differences in home prices is even more pronounced.
Keep in mind that the above mentioned stats are for homes built before the 1990s era, but the same conclusions probably cannot be made for old houses. Take Houston for instance. All homes that have been constructed before the 1940s are regarded as premium, featuring huge sizes and the ancient architectural and historical charm. Sweeping stairs, crown molding, exposed bricks are not observed in modern home, but these same features were regarded as luxurious entities in older residential structures. As such, some of these houses are considered valuable, and so their prices are also towards the higher end.
Considering the prices, you might actually be in favor of buying older homes now. Just make sure that you understand that you will have to spend additional amounts in repairs and maintenance; be sure to factor in these expenses as well.
Source: www.realestate.aol.com
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