The biggest difference between new and existing homes is not necessarily amenities. A swimming pool, security system, and central vacuum can be added to any existing structure, but what can't be added in many instances is more space.

And space is the number one feature homebuyers are seeking according to the latest survey by Professional Builder magazine. In the survey 41 percent of homebuyers stated that they were moving to obtain more room, while 18% are moving to live in a newer home.

Although the average homeowner currently moves every seven years or so, the new generation of homebuyers are planning to stay put. Of those surveyed, the respondents had occupied their homes an average of 11.4 years and plan to live in their next home for approximately 17 years.

New homes are increasing in popularity for a number of reasons - the most important of which is that the space planning suits the needs of today's generation of homebuyers.

Older homes built by previous generations are a reflection of the culture of their times. Thirty percent of the homes in the United States were built before 1940s, when the family unit consisted of a stay-at-home mother, working father and their children. In the 1970s, the working women's revolution changed everything from the way we live to the way we shop, invest, and market our goods. The economy of the times also lent itself to home design fashion, with homes growing larger during the prosperous fifties and again in the speculative '80s.

Over the last 25 years, homes have slowly increased in by more than 25% in size from an average of 1,660 to 2,120 square feet. Only 25 percent of homes built two generations ago had three or more bedrooms, and less than 20 percent had two and half baths or more. Today's homebuyer can expect one-third of the new-home market to offer homes with four or more bedrooms, and half with more than two and a half baths.

Today's generation has a wide variety of needs, while previous generation's needs were more easily predicted by the homebuilding community. The market is embracing the non-traditional family which is a growing market next to the shrinking nuclear family. Baby boomers, the leading homebuyers, have blended families and often are in the position of caring for children and aging parents at the same time. The emergence and popularity of the home office has also had an effect.

Many builders try to encompass the myriad needs of new homebuyers by adding an extra bedroom or with flex-space options - multipurpose rooms that can take on the function of the owner's needs and can adjust with changes as they occur. The extra bedroom or flex space can serve as a nursery, then be redecorated and outfitted to serve as a home office or craft room, or guest room.

A new home typically costs about 20% more than an existing home with comparable features, making it a relative bargain for the home buyer. The desirability of individual neighborhoods aside, home buyers may find that remodeling costs to obtain the "look of new" are significantly higher, and many costs incurred are not likely to "show." For example, older homes may have to be completely rewired and foundations repaired to meet new codes. During construction, costs of labor and materials is much greater. Builders can afford to buy in bulk, where as remodelers typically buy materials on a job-by-job basis. In addition, building from the ground up is much less expensive than tear out costs plus remodeling fees.

A major kitchen remodeling is estimated by the National Association of Home Builders as approximately $21, 262, and adding a new bath is about $11,645. Although the costs are high, the resale values are encouraging. If a homeowner were to sell a home with these added features, he or she would be likely to recoup 90% of the cost of the kitchen remodeling and 93% of the cost of the bathroom addition with the return rising every year. In some markets, these additions could recoup at 100% or more.

Published: July 20, 1998

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