Question: How much more do new construction homes sell for compared to similar homes that were recently built?
Answer: Roughly 100 new construction single-family homes have sold each year in Arlington since 2015 (per BRIGHT MLS). The cost of a new home shot up in 2018 and again in 2020 and 2021, but the homes' size, layout, features, and design have remained mostly consistent.
Table 1: Arlington New Construction Sales Since 2015
Now that we’re seeing more resales of recently built homes, I thought I’d look at how the price of new construction homes compares to similar homes built in the last 5-6 years. To do this, I looked at the 2021 sales of new construction homes vs the 2021 resales of homes built from 2015-2019 in the 22207 zip code (by far the highest volume of new/newer home sales in Arlington). I also removed a few outliers sales for a more accurate comparison.
Figure 1: New Construction at 3196 Pollard St Arlington VA 22207 ($2.3M)
New construction homes sold in 2021 sold for 16.9% more than similar 2021 resales of recently built homes (built 2015-2019), however, new construction homes were an average of 22% bigger (based on total finished square feet) than 2015-2019 builds sold in 2021.
As a result, new construction homes sold for a lower price per square foot on both above-grade (not including the basement) and total finished calculations. Thus, one could argue that new construction, with its lower price-per-square foot and brand-new systems (HVAC, appliances, roof, windows, floors, etc), is a better value…but it’ll cost you a lot more in dollars to get there.
It’s also worth noting that while you get brand new systems in new construction, a resale has (hopefully) already gone through the initial pains of breaking into the house and the inevitable issues that come up for owners of new construction. You may also find that the first owners have invested in some improvements that a builder may not have such as upgrading exterior living spaces or landscaping.
Table 2: New Construction vs Resale of Recent Construction
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Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.
