October 26, 2017
That "new home smell" may be enough to tempt the most frugal of prospective home buyers, but opting for an older place could go a long way in lessening the financial burden in the long run.
Sure, older homes are more likely to need some fixing up as you adjust to the new digs. But if you can cope that, your used home is probably a lot cheaper than the new cookie-cutter that just went up down the block, according to a new Trulia report.
Of major metropolitan markets around the country, Philly had the third-highest price gap between newly constructed and used homes, after only Detroit and Bridgeport, Connecticut. New homes, defined in the study as those with a listing date within two years of its construction, cost an average of 188 percent more here than old ones.
Further, median lot sizes for newer properties aren't that much larger than lot sizes for older homes, the report found.
Philly's price disparity is exacerbated by the ages of its older homes. Homes here have a median age of 82, the oldest of all cities examined in the report.
The site also highlighted the following findings:
• Size and location can explain most of the difference in price between new and older homes in a metro. Nationally, of the 28 percent price premium, roughly half is tied to a home’s features.
• Detroit leads the nation with the largest difference in price between newly built homes and older homes, where you’ll pay 3.2 times more for a new home. However, new homes are also 86 percent larger in lot size with 94 percent more square feet.
• Metros in the West and South have among the lowest price bumps on new homes. However, these low prices come with smaller yards. In Charleston, South Carolina, new homes are listed at just 6 percent more than older homes, but lot size is smaller by 30 percent.
For its study, Trulia used listings data from 2012 to the present, adjusting the numbers for inflation.
Nationally, the site found that new homes cost 28 percent more than the rest of the housing stock.
The full report can be found here.