San Diego Housing Market News and Analysis

If you buy new, you better have significant cash reserves so you can landscape the place. You will not get a home equity loan on a new house in a market with declining property values.

Otherwise, you'll be one of 'those' people who has a dirt yard 5 years later and thinks that they can get top dollar for their house because it has hand rubbed brazilian hardwood and italian marble.

I've always preferred used. I've owned four houses in my life. Newest one was 33 years old when I bought it. Some people call these existing homes.
Here's why:
1. Location: I like to be closer to my job. Older established neighborhoods tend to be closer to the job centers.
2. Location: Older established neighborhoods tend to be closer to entertainment and amenities, like the beach, downtown, Zoo, Bay, etc. Places we would take the kids.
3. I don't like to pay HOA or mello roos.
4. Character of the house. Older homes typically (not always) tend to have more character than cookie cutter developments.
5. Character of the neighborhood : Older neighborhoods have more variety of population. Newer neighborhoods are built and sold out over a short period you end up with similar price points, resulting in relatively narrow slice of demographics. (Some people like that aspect, I don't).
6. Lot size to house footprint tends to be higher. I hate the thought of my next door neighbor calling to borrow sugar or butter and having them hand it through our side windows.

FormerSanDiegan, thanks for your perspective. Meandandale, thanks for yours too. My response: I'm a new grad just starting out with a new career after being married for 10 years, I definitely don't have significant reserves.

If I were to buy new and the builder didn't landscape the backyard, I'd have some sod thrown down and little else. I don't have 50K to go in and do up a backyard as soon as I move in. That's one reason to buy used.

For some reason, I've been a new home snob. I don't think I can continue to entertain that if I want a good deal in today's market. Like I said, are the builders going to meet bank owned prices between now and 6 months?? Maybe a resale will be best for me anyway.

Let me hear from more of you.

We're buying a 20 yr old house that is an REO.

My Reasons:

1. I like the privacy of larger lots. Our new house is on .60 acres and I won't have to listen to my neighbors arguing, or their kids screaming all of the time.

2. Many of the new floorplans in Temecula are geared to families of 4+ people. For a married couple, it's lots of wasted space. We don't need a "loft" or hobby/game room in addition to 4 bdrms. If we have a master, two rooms for offices and a guest room we're happy.

3. I've heard that older construction is more solid. During the boom, builders put together homes as quickly as possible to meet the heavy demand.

4. I prefer an established neighborhood that is NOT full of owners who did 100+% financing in the last 3 years. The number of NODs/REOs within a 2.5 mile radius of Redhawk is substantially higher than it is for my new 'hood.

5. The building materials used in the new homes I've seen seem cheap.

HOWEVER, Marion, if I were in your shoes - and single - I would probably opt to buy a newer home that doesnt need a lot of maintenance.

There are existing homes out there that are in decent shape. I saw a house in Crowne Hill some months ago (Hussar Ct) that was built in 2005 and NEVER lived in (I think an investor had purchased it). It was nicely done, about 2800 sq feet, 10K sf lot, and the price wasnt bad. I think it's an REO now.

So much of this is really about your own personal tastes and needs. There is something to be said for being able to choose your own cabinet colors, tile, carpet, etc.

Let us know what you end up doing.

I gotta agree with the others on this. I have always liked the character of an older place with mature landscape, plus I like putting in a little sweat equity. Also,I will never pay mello or HOA (EVER!)All it does it take away from what you can afford.

The only thing I would ever buy that completely goes against that logic is a new downtown condo. Hard to get away from HOA downtown, but it would be killer to have a tiny little studio to escape to on weekends with the wife. We are hoping to see something near the ball park in the low 200s. Still too expensive down there, but I digress.

New construction is nice, but there are hidden costs that can ready get you...especially if you are like me and like to decorate. :) New construction usually means at least blinds for ALL the windows (can easily be $1,000-3,000), new fridge, water softener, deocrative window treatments, sprinkler system, etc...even just putting sod down is quite expensive.

I prefer the charm of older, established neighborhoods with mature landscaping and the character of an older home; however the I do apprechiate the "newness" of brand new contruction - everything is so sparkling and smells fresh. I have lived in both. One of the best ways I believe is to buy a home that's 2 years old - it's still very new, yet the previous owner has probably already shelled about the money for the hidden costs and has made the builder fix all the little problems that show up in new contruction. However in this market finding a 2 year old house that isn't distressed would be pretty hard. Plus I am not so confident in the quality of homes built in the last few years. A good friend of mine in North Carolina just bought her dream house (and I mean DREAM house), it was about 18 months old, just beautiful and still so brand new, yet they didn't have to put a alot of money into the little upgrades (window treatments, etc) that can nickel and dime you to death.

Good luck!

Just a comment about HOA - don't be too averse toward them - they maintain standards for property maintenance, laundry lines, vehicles, #/occupants, etc.

Review CCR's carefully b4 puchase & make certain costs/requirements are tolerable for you.

That is true about HOA's, but if you get an owner heavy neighborhood, with few rentals, it tends to solve many of those problems.
MPO

Certainly wonderful theory but difficult to control.

I live in a new home for the first time.
All the mechanical equipment is brand new and high efficiency.
The roof is brand new.
The house is insulated properly. ( I paid extra to have it over done)
It has dual pane windows.
The decks and other exterior features have 100% available future use.(they are not at half life or beyond).
Seismic structural elements built in.

On purely economic concerns I think this covers the landscaping and curtains( most people are going to toss them and buy new ones anyway). This comparision is for an average house that hasn't been modernized. Obviously an older, high quality, architecturally significant home or a well upgraded house with extreme landscape of a large property could have more value than these things.

I think the choice of neighborhood character and personality is highly variable. People choose where to live more on how they resolve this question and deal with the housing stock secondarily. Of course in some areas there is enough variety to make the new vs. resale an important question with regards to future quality of life issues and value retention, especially now.

New is my vote but right now in your market marion, the builders are behind the repos as far as pricing goes, this may change. Rustico made some valid points, older homes are inefficient, poorly insulated, unfinished (no drywall) garages, low tech windows, some have galvanized steel pipes. Houses built after about 1998 in Temecula are a safer bet, avoid 1992-1997 builts in this area, absolute crap, there was no profit margin and corners were cut. Houses, like wines, have a vintage and each year is different. With a repo you will likely have similar expenses because flooring and landscaping needs replacement, with resale houses you'll pay too much. I'm not nuts about wolf but it was an example you used, the builders are 50-100k over repos in their own tracts, this is going to hurt them and they will have to come down, all of wolf is upside down so the pressure will be there. Redhawk is older but the construction years vary, there is one tract still under construction on the last piece of premium land (hemmingway) and yesterday a repo came on the market for 329k, about 100k lower than new and it was dialed in as far as options go, probably lived in for a month, they are only on about the 30th house and the first ones are going under, they can't keep that up much longer, on the other side of this bounce, look for 20% slashings at the builders.

For some reason, I've been a new home snob. I don't think I can continue to entertain that if I want a good deal in today's market.

If money wasn't an object, I would go brand-new all the way. As it is, I'll be aiming for "newer", like 2000-2007. Besides being in much better shape, newer homes tend to have more useful interior architecture than older ones - bigger closets, bigger kitchen, walk-in pantry, laundry room upstairs, etc.

I've lived in both older and newer, and what gets to me about older homes is thinking about the dirt, rust, mold, rot, corrosion, and mummified mouse corpses that you don't see, or can't get to.