Why Choose a New Home?

Image from A & N Loewen Construction, Inc.

Image from A & N Loewen Construction, Inc.


by Phillip B. Burum, Executive Vice President, Diversified Pacific,

President, Building Industry Association (BIA) Baldy View Chapter

My intent is always to present a fair and balanced picture regarding the opportunities to buy a home and whether you should consider a new home or a resale. Homeownership is the key - what choices you make in that purchase are up to you. However, there is a reason that I chose to be a homebuilder rather than a home improvement contractor. Aside from the fact that, as my wife regularly reminds me, swinging a hammer is not a particular skill I possess; I believe new homes offer a greater value for today’s homebuyers.

     If you don’t love the house it will never become a home. Room count and configuration are high on the list among the most important components of your new home. The appearance and style of the architecture should also play a part in your decision. Those items cannot be ignored. There are, however, many reasons to buy a new home that are far beyond the aesthetic, not the least of which is energy efficiency. As much as you fall in love with the architecture or how the rooms flow for you and your family, do not overlook the long term financial aspect of the home or the cost of use. When you buy a car, you consider gas mileage and cost of upkeep, the same considerations need to be contemplated when buying a home.

     Although one should not, I am going to skip past the incredible value of a new home warranty. I will only say that this feature alone should convince you that a new home is your best option. Today, I want to focus exclusively on the on the long-term ‘cost of use’ portion of the decision since most of us making large purchases these days think more in terms of monthly payments than overall purchase price. These costs will not be as big of an impact to a single person living alone that works 18 hours per day away from home but for the average homeowner in California, the cost of electricity should be a major part of the decision making process.

     In 1974, California adopted the Warren-Alquist Act, which required the creation of energy efficiency standards in the building code. Since that time, various legislation has been enacted to mandate more energy efficient new home construction. The policies have been so effective that, by 2009, Californian’s were consuming 31 percent less energy per home than the U.S. average. These legislative choices have not been without financial impact as the cost of new home construction increases dramatically with each new requirement. A hundred years from now someone will evaluate the costs incurred to construct these homes and weigh it against the energy savings to determine if the policies were good choices or bad ones. For now, I can tell you that these additional improvements play a part in the higher price of homes but they also result in long term savings that are a benefit to the new homebuyer that many don’t even realize.

     Since 2004, the energy efficiency requirements for new homes have increased significantly every three to five years. By way of example, according to the California Energy Commission, a home built in 2008 is estimated to be 20 percent more energy efficient than a home built in 2004. A home built in 2013 was 25 percent more efficient than homes built in 2008 and finally, with the adoption of the 2017 code update, homes built to the new code will be 28 percent more efficient than homes built in 2014. New homes use 57 percent less energy than homes built only 13 years ago. Imagine your current electric bill reduced by more than half. For many of us, that equates to thousands of dollars per year in savings.

     If you are considering two homes in the same general price range, one new and one 20 years old, remember that they are apples and oranges as far as cost of use. When comparing prices, remember, there is more to the cost of the home than just the cost of the home.

     The BIA Baldy View Chapter seeks to advance the opportunity to attain the American Dream of home ownership. For additional information on homebuying, home improvements or the benefits of homeownership, go to www.biabuild.com on the web.