There’s no shortage of frustration for first-time homebuyers in Las Vegas these days. Prices are good, but bidding wars can nudge first-timers out of the mix, especially with so many cash investors around.
The natural inclination for some is to buy a new home. Homebuilders market the relative ease of the purchase as much as they do all the included amenities.
And for good reason. With only 4,000 units moved, new-home sales hit a 23-year low last year. Nonetheless, new homes are still averaging about $200,000 a pop, while resales are in the $120,000 range.
So is it really worth buying that pretty new chunk of Vegas stucco when it’s parked next to a subdivision with comparable square-footage floor plans going for tens of thousands of dollars less?
For Aaron Fresinski, who late last year picked up the keys to his first home, in Henderson, buying new seemed like the best option—until he looked closer. An account manager for CenturyLink, Fresinski spent years saving for a down payment and researching the market. When looking at new homes, he noticed that a few upgrades hiked prices up significantly. In one situation, he recalls a sales rep telling him financing would be so easy that the builder would even find a separate loan for the 3.5 percent FHA-required down payment, and rope all closing costs into the loan as well. All he really needed to do was sign a stack of papers.
“I was really blown away by that. They make it so easy for you,” he recalls. But the thought of paying down the loan for years in hopes of finally catching up to the market value of area resale homes made him uneasy. After getting nudged out of a bidding war on resales and about six months of looking, he finally ended up buying a 5-year-old foreclosure. It needed some remodeling. Under his FHA 203k renovation financing program, he added about $10,000 to his loan, but still got what he wanted at a better price.
“It was really like buying a new home,” he says. “With the renovation money, we were picking paint colors, appliances. We just didn’t pay $80,000 more for it.”