When to Remodel vs. Buy a New House in San Diego
We all live in San Diego for a reason; the 300+ days of sunshine, the minimal traffic (compared to our neighbors up north), the beautiful beaches, and relaxed culture to name a few. But the truth is, a lot of other people want to live here too!
It is no surprise that San Diego’s housing market is shrinking. New homes are typically being built further and further east or south, making it more difficult to be able to purchase a new home in your neighborhood of choice.
Because of this, clients have been asking us when is it an ideal situation to buy a new home vs. remodel the one you are in?
Things to Consider when Purchasing a New Home in San Diego
When you are considering purchasing a new home, and are in the budgeting process, it is important to consider the additional costs that come with purchasing new. In San Diego County, new homes typically do not come with landscaping or even fencing around your property. So, when you are calculating the total costs, be sure to factor in outdoor necessities as well as the customization of the inside.
Here are some common additions we see when purchasing a new home:
Pool
Patio cover
Furniture
Flooring upgrades
Painting
Window treatments
Landscaping
Fencing
To purchase a new home in San Diego, the average home costs between $700,000 – $1,000,000. The average home buyer has to put down 10-20% down, in addition to the financing needed for the customizations listed above. Also, when you purchase a new home you will have higher property taxes.
These numbers can be a bit intimidating, so when would it be a good option to buy a new home over remodeling the one you are in? One common reason is for a better school district for your family. Another is when you need more space and can’t obtain it on your current lot. If you have new additions to your family, or simply need more space, and acquiring the additional square footage on your current lot isn’t an option, then buying a new home is the choice for you.
A Word of Caution in Regards to Drastically Increasing your Square Footage
Adding additional square footage to your home is exciting! But a word of caution, you don’t want to make your house more expensive than the neighborhood will support.
For example, let’s say you currently live in a 1,200 sq. ft. home and the houses surrounding you are a similar size, and you are considering doubling your square footage to 2,400 sq. ft. We recommend you do some research on Zillow to see what the other houses are going for within a one-mile radius of your home.
If your house is currently worth $500,000 and you are looking at adding on 1,200 sq. ft. for $150,000, but your neighborhood is only supporting $520,000-$570,000 in home value, you probably won’t want to invest $150,000 that you might not ever be able to make back if you sell. By researching your competition in your neighborhood, you can ensure you will get the return on your investment if you choose to sell your home in the future.
Things to Consider when Remodeling your Home in San Diego
There are a lot of upsides to remodeling your home in San Diego. For one, the property tax will likely stay almost the same unless you add square footage. Even if you increase the square footage the increase in your property tax will still likely be less than the property tax of a new home.
There are also little to no moving costs. As well as avoiding the headache of moving. However, please note that if you are planning a major home remodel you will likely have to live somewhere else during the process. Some examples of a major remodel would be:
Adding square footage that requires removal of the roof
Changing all the windows
Redoing all the flooring
It is very common to have to relocate for major remodels, at least for a portion of the time.
Another plus side is that you are already established in your neighborhood. You have friends in the area, your favorite restaurants, and grocery stores already picked out. This may sound insignificant to the other topics we have discussed, but the sense of home and comfort can be quite impactful.
You also know your current home. After actively living in your home and then deciding to remodel it, you are hyper-aware of what works and what doesn’t and can then customize the space to fit your family’s needs.
When you crunch the numbers, it is much more cost effective to remodel compared to move. You don’t have the cash outlay like you would paying 10-20% down on a new home, or as large of a loan. In most cases, people can spend anywhere from 100,000 – 200,000 and completely re-vamp their homes. There is also the opportunity to remodel in stages so you don’t have to take out a large loan all at once.
Home Remodel – Simple Changes Can Make a Big Difference
Our client in Scripps Ranch wanted to refresh her kitchen but was on a budget. This is a prime example of the major difference you can make in a space with simple changes. We created a custom tile backsplash, changed out the hardware on the cabinets, and was able to create a completely different look and feel.