Heritage Restoration, Inc.

New House VS Old House: Which is Better?

You are finally buying a home, or upgrading to a bigger one. There are many indicators saying it’s a good thing, like consumer confidence, low interest rates, and more lenient financial lending. But before you do, there are behaviors and industries that have been hit hard and need time to recover. Be it scientific or observational, the construction industries, real estate market, consumer spending, and lending have seen a significant drop in activity over the past 5 years, having profound effect on the buildings we occupy, fix, and buy.

Rhode Island’s construction market has been hit hard. The RI Department of Labor and Training’s database states there has been a 30% drop in construction employment from 2008 to 2012. The National Association of Home Builders states a 72% drop in single-family building permits from 2005 to 2012. The remaining, but small, remodeling sector has been inundated with contractors causing a drop in some prices. But many suppliers, contractors and specialists have small inventories or staff, or have closed shop completely. A sharp increase in activity may cause inflation or delays.

Real estate has seen an uptick. According to the RI Living website, the lowest number of single-family homes was 6.7K in 2011, when the average was about 7-8K. The average sales price plummeted from 235K in 2008 to 190K in 2012. Yet with improved consumer confidence, job security, and trusting financial lenders, the market will improve, with more houses on the market and prices holding steady.

The data is basically saying that there are low lending rates, more houses for sale, steady but climbing real estate prices, and less contractors. This may be the best time to invest in a home, with a few asterisks. What condition, where, and how old? To help answer that, consider some more data.

Rhode Island has the largest per capita National Register buildings (a Federal designation of historical significance) in the US. Newport has the greatest concentration of National Register buildings in the US. There are over 150 historic districts. And considering that over 35% of the RI’s housing stock was built before 1940 and 80% before 1980, RI’s rich history and architectural splendor is hard to avoid, and potentially a better investment than building new.

New is not necessarily better than old. New and maintenance free means it will eventually be replaced and thrown away. New houses are not easier, not cheaper, or not cleaner. They are different. When considering a house, you need to look through the ugly and consider lifecycle and function. You can do it yourself or hire someone to do it for you.

With 82% of RI’s housing stock over 30 years old, many building assemblies are reaching the end of their expected life. A 30 year-old house was built in 1983, that’s right 1983. By now, all of the windows require replacement, the roof and related flashing is shot, and the siding may be tired, especially if it is a vinyl. The typical life cycle of “maintenance free” materials is at best 25 years. So be ready to start the next life cycle.

Pre-1940 or so houses relied on craft in their assembly methods. There were no maintenance free homes, just poorly built and well-built homes. But even a poorly built house can be ok if it was maintained. The ones that were poorly built take 5-8 years to show it or most likely they are no longer here.

Right about now is when many late 1800 building exteriors are reaching the end of their life cycle. The copper, tin, slate and other materials can be expensive to repair, but once every 100 plus years is pretty cost effective, right? So when you choose cheap because “you won’t be here in 5 years”, consider that you are making repairs and maintenance more expensive for everyone, at any age.

Differed maintenance has been another casualty during this recession. Function is the single most important factor in a house. If the function fails, then the building is not far behind. A neglected $100 gutter repair can lead to tens of thousands in repairs in about 5-10 years. So when you see a tired old building, realize someone did not do what every building requires: maintenance. Neglect can make a good building require hefty intervention, but it is still a good building. Remember, if you take care of your building now you will not only save yourself money and headaches, but also you keep the required maintenance cycle going. And yes, you have to spend money on not so fun and pretty things. Always.

So when considering a house, lifecycle and function are the most important things to consider. Everyone has to do maintenance. If you are not maintaining, then you are eventually throwing it away. Painting, floor refinishing, kitchen and bath remodels are pretty much expected every 5-20 years, but things like function and lifecycle are constant. So choose wisely. Love it. Help the economy. And realize, your work will never be done, just delayed.

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