Choosing Between New, Resale Home

With mortgage rates lower than expected, and public economic confidence higher than anticipated, 1986 sales of new and existing houses are likely to set new high marks for this decade.

Prospective home buyers already have set new highs for January-March sales by contracting to purchase houses they will occupy in spring and summer. Prices of both new and resale dwellings are being raised by builders, and homeowners are aware that more and more house-hungry Americans are eager to take profits on stock investments and invest them in a bigger, better house.

Many of these prospective purchasers also stand to reinvest substantial profits on their present homes by moving onward and upward, residentially speaking.

Two of our best friends have become dedicated “house hunters” during the last six months and have intensified their search this spring. They seek to sell an older house on a subdivision size-lot in close-in suburban Washington and move “farther out” into a house with larger rooms and a larger lot. This empty-nester couple can make this move because both have retired early and no longer need to consider commuting conditions.

So far, their search has centered on an area about 35 miles north of the White House. Our house-hunting friends will accept either a new or resale house when they find one that is right, in terms of location, price, room sizes and semi-rural ambiance.

Milton Schneiderman, president of a large home-building firm here, commented recently that the variety of new homes and resale dwellings on the market is “overwhelming.” For instance, an estimated 600 communities have 30 or more new houses, and at any one time, more than 100,000 existing houses are on the market here. To make house hunting more manageable, some lookers narrow their choice between a resale or a new house.

Schneiderman noted that seasoned resale dwellings often have the advantage of prestigious, close-in locations with mature trees and landscaping, plus improvements and interior decoration done by previous owners.

A notable example here is “old Chevy Chase,” just across the District of Columbia line into Maryland. Prices of those old but charming houses have appreciated more in recent years than have lots of new houses. But it must be reckoned that Chevy Chase owners also have made substantial renovations and remodelings--plus lots of expensive upkeep.

On the other hand, Schneiderman noted that new-home buyers benefit from warranties that guarantee plumbing and heating components and also protect buyers from bugs in new equipment. He also pointed to the advantages of new products that make new homes more energy efficient--double-glazed windows, thicker insulation, more effective sealants, more efficient hot water heaters, furnaces, ranges and ovens.

Our friends the house hunters are open-minded in regard to new or older houses but their choice of location has put most of the emphasis on new houses in areas where one-acre lots are affordable. The chances seem to be excellent that they will choose a new house. They seem eager to leave their 40-year-old dwelling, even though they have kept it in good shape.

It occurred to this observer that few of our friends have bought new houses in recent years. Three savvy and financially successful couples chose resale houses when they moved up to something better. We alone chose a new house, and that was mainly because it offered what we sought in terms of design and amenities--not easily found in our price range in existing houses. Translated, that means we couldn’t afford to live in Chevy Chase.

Schneiderman urged buyers to examine their own priorities in choosing between a new and resale house. “If a closed-in location and an established neighborhood full of towering shade trees completes your picture of an ideal home, a well-maintained resale may be just the ticket.

“On the other hand, if a low-maintenance, energy-efficient house with contemporary architectural features and amenities is more important than a location minutes from downtown, then a new home is the answer.”