If you are a current home buyer and/or seller, you know it's a robust Seller's Market for any Scottsdale home for sale that is priced correctly. Although things are slowing down a little bit, which is the norm for this time of year, we're finally seeing longer days on market and price reductions. Plus, many listings are making it to an Open House, which we haven't seen for a while as listings sold before the open could be held.
It is simple supply and demand, which I seem to be talking a lot about lately. Many buyers just can't wrap their heads around the rising Scottsdale real estate prices, which are pushing home affordability out of many buyers' abilities.
Do you think you can get new construction for the same price as a similar resale home?
I'm currently working with a buyer that insists he can build a new Scottsdale home for the same price as a resale home. I know what he and his wife want, and I don't believe they can get everything in a new build that they can get with an existing resale home.
He states that they'll wait for a pool, but to me, I'd rather have the pool built during construction and not have to do it after I move in. Plus, at that point, you need to either finance it a different way or pay cash. Why not take advantage of low interest rates and have them built into the mortgage?
They also like very nice things, and if you've ever shopped for new construction, you know about upgrade costs. Many model home visitors don't realize that what they're looking at is full of upgrades. They only hear the base price and are shocked when they find out what the house would cost to make it look like the model.
What is your timeframe?
This is probably the biggest reason to buy an existing Scottsdale home for sale vs. building new. Not everyone can wait for a brand new house to be built.
If you're moving to the area you might have to sign a year's lease to wait for your newly constructed home. Are you OK renting for a year?
If you're already here, are you good with staying in your current home while you wait for the new one to be finished? Do you have the necessary cash for the down payment and other incremental payments the builder might require? If not, you'll have to sell your home and rent something. You could possibly get a short-term rental, but I've worked on a new construction site and the completion date quoted doesn't always happen, especially with the lack of building supplies and available construction workers.
Would a spec home work for you?
If you prefer new homes, you could search for a "spec home." This is a newly constructed home that is already built and ready for possession. It is short for a speculative home. Some builders of spec homes will make adjustments to the home, but you're going to be charged extra for any changes you'd want.
You'd have to weigh the price of the spec house to other area homes, especially if it is in the new construction subdivision. Is it worth it to you to not be able to pick out everything, but be able to move into a new home quickly?
Another thing I've noticed about some spec homes is that they are built on lots that aren't in the best locations. I can't tell you how many spec homes have been built on lots facing a busy street.
So if you're seduced by a beautiful spec home and you don't mind the negative location, you moved in as the first people to live in the home. When you go to sell the home, it will no longer be new construction. It will have wear and tear and if not updated over the years you've lived there, it will be outdated. Now the fact that it isn't in a good location will stand out to future buyers.
Location isn't always a busy street. It can also be a location near commercial buildings or surrounded by older homes. In that case, it would be the petunia in the onion patch. I read about people who purchased a Scottsdale home down the street from an animal center, and they weren't happy about the smells and noises. I don't think it was a new construction home, but it's something to think about.
More about location issues
My brother purchased a newly constructed Scottsdale home in a popular subdivision near a mountain. It was a second home for him so he only visited it sporadically.
The first time he and his family came in for a visit, they noticed the home was overrun with scorpions and bugs. They found out that bobcats hung around their place since there were no humans or animals to scare them away.
They ended up sealing the foundation and like most Scottsdale residents, they hired a pest service. That was a decade ago and they still have bugs and the occasional scorpion. I still feel it's partially because the home isn't inhabited, but I wonder if things would change if they lived there full-time.
At the same time, we purchased an existing Scottsdale home that was built in the late 1980s. We never saw a scorpion, snake, bobcat, or coyote. We did have a javelina run through the area in the middle of the day once. In contrast, my brother and his family have seen rattlesnakes, a family of javelinas that were following them and their dogs, and bobcats on their fence. This was not a rural area, but it was constructed with "desert-scape" in mind.
The moral of that story is when building new in the Phoenix area, especially the less populated North Scottsdale desert areas, you are digging up land where the creepy crawlers lived for years. Buyers of those homes will definitely be seeing more wildlife than purchasers of homes in subdivisions that have been inhabited for a while.
Another thought about location is being in a new construction area and having to deal with continual building until the subdivision is finished. This means trucks coming in and out, construction noise starting early in the morning, and dealing with more dust than normal. You might also notice potential buyers coming in to view the models and driving through the area, causing excess traffic for the length of the building cycle.
Are you a DIY'er?
Although I've worked in new construction subdivisions, I've never had an interest in purchasing a new build. One reason was the high prices of new vs. resale, especially if you wanted more than the base model. We had a joke about one local builder that a toilet was an upgrade. We never wanted to wait up to a year to get into a new house.
My husband and I preferred to find homes that needed some updating. One of our homes was a foreclosure that we transformed and lived in. My husband was brought up in a construction family (mostly commercial).
We also felt that some of the older homes were constructed better than new builds. I'm not sure if that was true, but I learned a lot about new construction and saw firsthand some issues with shoddy plumbing and electrical work. Sometimes, it was discovered before the house was finished, but other times it was after families moved into their new homes. And it always seems to take a builder longer to fix problems in a home that is sold and closed, even with a Builder's Warranty.
Maintenance - used vs. new
Unless you have purchased a resale Scottsdale home for sale that has been nicely updated, there will be things you'll want to do. So you have to balance the price of the existing home plus updates you feel are necessary vs. building new and being able to move in and hopefully not have to do anything but enjoy your new place.
With resale, you might have found an updated interior but it might need a roof soon. Depending on the age of the home, some of the main mechanics will be original, including plumbing, electrical, and heating/cooling systems.
Some sellers make updates or repairs themselves without hiring professionals. If things were done incorrectly, your home inspector should find these issues (and you should always have new construction inspected too). But they can only inspect what they can readily see.
New construction could be more energy efficient
If you're on the fence about what is best, consider that many homes today are built with energy efficiency in mind. Did you know that about 1 in every 4 homes built in 2020 qualified for a Home Energy Rating System (HERS) Index Rating provided by the Residential Energy Services Network?
You might have heard about an Energy Star certification, which is provided by the EPA. A home has to qualify by passing strict efficiency guidelines. The only concern is that you will most likely pay a higher price to get a home built with these kinds of energy efficiency certifications. But you might earn that back by lower heating and cooling bills after some years.
On the other hand, a resale home has a lower carbon footprint, if you're concerned about this. You can always bring greener standards to an older home, which might have cost you less money than new construction to begin with.
Floorplan and design
Are you a buyer that prefers an open floorplan? I have seen a lot of resale Scottsdale homes for sale with high ceilings and open designs. When we purchased a home last year, some of the homes were too open for us.
We all like to have our own areas to watch TV, listen to music, etc., that aren't our bedrooms. With some of the open floor plans if someone was watching TV in the living room (or front room), then the TV volume in the family room would clash with the sound in the living room. I think that's why some people, including builders, are getting away from those open plans.
Our family especially couldn't live with just a great room style floorplan. We need our space! Some of the open plans had walls between rooms, but they didn't go up to the ceiling or they had large cutouts.
We love one of the designs of our current house that we didn't even think about when we purchased it. We have a door from our bedroom out to our covered patio. This comes in very handy when our 3 dogs wake up in the morning. I don't think this is popular in new construction, and now it would be difficult for us to live without it.
It's a big decision that only you can make
Hopefully, this post has opened your eyes to some things to think about. Whatever you decide to do, give me a call at 480-877-1549. I can help you with both new construction and resale Scottsdale homes for sale. I don't just work in Scottsdale. I also serve Carefree, Cave Creek, North Phoenix, and other nearby towns.Posted by Judy Orr on