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Is a new construction house like new car depreciation?
Is a new construction house like new car depreciation? People say as soon as a new car is driven off the lot it depreciates. I'm wondering if a new construction house is the same. Do I pay a premium for the new and as soon as I live it is, does the value go down?
Asked By Mary | Lake Geneva, WI | 220 views | Buying | 9 months ago
Answer(2)
Julianne Clark / Your Lowcountry Realtor
Charter One Realty
New construction housing is not the same as vehicles. Real estate appreciates in value over time -- the majority of vehicles do not. There are hick-up at times and value drops -- buy year over year -- real estate always appreciate if maintained. There are benefits to purchasing a new home because all the mechanicals are brand new and under warranty as well as the construction. When buying a used car and home -- you do not have the security that the car/home is warrantied to be problem free for a limited time. Buying new is a great choice for someone who is unable or uninterested in being responsible for home repairs for a few years or feels more secure knowing the history of the home from the get-go.
- 8 months ago
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Tiffany Drahonovsky
Jason Mitchell Group
Hi Mary-
In most cases, a home is an appreciating asset. Real estate, the house and land it sits on, are considered real property.
Cars are a depreciating asset, they lose value as they age and are driven.
As long as the market is strong, and the supply of homes is lower than the demand (we are very short of inventory now compared to demand) buying and/or building a new construction home can be a great way to grow your equity and appreciation based on the current economics. Buy now. Things are not likely to get cheaper/less expensive and by waiting, you could potentially miss out on the compound appreciation of a home year over year.
- 5 months ago
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