Now that real estate values have stabilized, a dilemma exists for some buyers. Should they buy a resale property, or should they buy a vacant lot and build a new home? Or should they buy an older house on the water and eventually tear it down for new construction?
If you count the new construction permits over the past five years, you will notice that there was huge decline between 2006 and 2011. The good news is that building permits are currently on the rise. This shows that there is a lot of value right now in the price of vacant land, and in the cost of new construction.
In today's market, a new home is basically any home constructed between 2005 and 2010, with the larger number of those homes being built in the former years, not the latter. What this means is that if you really want "new," then you should consider building. This would allow buyers many options with respect to design features, location, water access, swimming pools, and utilities.
Is new really better and old? That is a matter of perspective, and exactly how old are we talking about. When you consider homes that were built in the 1970s and 1980s, it is very unlikely that you are going to find homes with the high ceilings and very open floor plans. Kitchens were typically smaller with a wall obstructing the views to the rear of the house.
These are the homes that are now being considered for razing if the water access is decent. When you consider deep water access with no bridges to the Gulf of Mexico, land value is very significant and a very limited resource.
So, if an existing, older home is offered for sale, the value of the land is the real consideration. In other words, the existing structure may be functionally obsolete, and have little value.
Many of the homes in the Yacht Club area fall into this category. Although some of these homes have been updated over the years, many of the floor plans are functionally obsolete. No matter how much crown molding or granite you use to update an older home, it is still an older structure. Many of these homes have already been razed and given way to larger, more contemporary construction.
I hope I have given some insight regarding choices in today's market. If you are considering building new, or buying an existing home, it is important to do some comparison shopping before making a decision.
Mario D'Artagnan is a broker associate with Miloff Aubuchon Realty Group, Inc. Mario is a former investigator for the Florida Real Estate Commission. Mario is also a former real estate instructor and keynote speaker on the topic of agency law. Mr. D'Artagnan is a published author and veteran of the U.S. Air Force. For questions or comments contact Mario at: firstname.lastname@example.org or 239-565-4445.