Do you prefer new homes to existing home? Do you prefer modern amenities? Well, you are not alone.
In a recent survey conducted by Trulia 41% of American expressed a strong desire to build their own homes. However, majority of these respondents did not want to pay the 20% premium for having a new home.
Only 21 percent strongly prefer an existing home. Also, 59% of Americans prefer new homes with modern amenities such as new kitchen appliances, kitchen islands and open floor plans. Other features on interest for Americans are pre-wired walls for flat screen TVs, or radiant floor heating.
However, new homes costs a lot more. In fact, new home remodeling costs that banks allocate to homes in Silicon Valley is about $200-$300 per square feet. This observation is also confirmed by Trulia’s finding where survey respondents do not want to pay the 20% premium that is associated with newly build homes.
Trulia calculates that new homes built in 2013 or 2014 are typically priced 20 percent higher than older homes of a similar size and location. Among those who strongly prefer a new home, less than half — only 46 percent – are willing to pay at least 20 percent more to purchase a new home versus a comparable existing home. Among the survey respondents, 58% state that they want to “spend less time on maintenance and repairs” as the reason why they prefer New Homes. Ironically, only 11% of the respondent state they want to live in a newly developed neighborhood near other homes.
This article reminds me of the recent developments in Los Gatos where New Homes with 2800-3500 sqft are selling from $2.3-2.9 million dollars. That is about $$821 per square foot which is a very steep price that some of our buyers are not wiling to pay as well.
Would you pay $820 per square feet for a New Home in Los Gatos?