The Pros & Cons of Buying New Construction vs Existing Homes in Minnesota

To build something new with all the modern advantages, or buy something existing in a well established neighborhood? Both options come with pros and cons, and deciding between the two depends on your priorities for your property. In this blog, we’ll discuss the key factors that may impact your decision, including the full financial reality of new vs. old homes.

Key Takeaways:

• New homes are guaranteed to meet Minnesota’s current building codes.
• These codes help prevent the ice dam issues prevalent in older homes.
• The current lack of inventory in Twin Cities suburbs can make new homes a more reliable path to homeownership in desirable communities.
• Older homes are more likely to require immediate additional maintenance, while new homes allow such costs to be delayed, usually for several years.

Minnesota’s Housing Market: New Build vs. Pre-Owned

In Minnesota, the new vs. pre-owned home decision is subject to a few more considerations than you’d face in a more temperate climate.

The "Minnesota Winter" Advantage: Efficiency & Comfort

Modern MN energy codes have resulted in significantly improved energy efficiency over homes built just 30 years ago. That can mean a difference of thousands of dollars in climate control costs every year. It also helps prevent expensive damage from ice dams.

Modern energy efficiency measures that you’ll find in new homes, including every home built by Country Joe Homes, include:

• Tighter building standards to prevent drafts and heat loss.
• Improved insulation techniques and materials.
• Energy efficient HVAC systems and heat pumps.

Maintenance & Structural Integrity: The Cost of Aging

New home buyers in Minnesota enjoy a "maintenance holiday" after moving in, thanks to the state’s statutory builder warranty. This warranty states:

“In every sale of a completed dwelling…the vendor shall warrant to the vendee that:

1. During the one-year period from and after the warranty date the dwelling shall be free from defects caused by faulty workmanship and defective materials due to noncompliance with building standards;
2. During the two-year period from and after the warranty date, the dwelling shall be free from defects caused by faulty installation of plumbing, electrical, heating, and cooling systems due to noncompliance with building standards; and
3. During the ten-year period from and after the warranty date, the dwelling shall be free from major construction defects due to noncompliance with building standards.”

Unfortunately, no such warranty exists for pre-owned homes. And thanks to Minnesota’s harsh winters and powerful summer storms, a home in this state can suddenly require serious repairs or maintenance at just about any time. Common maintenance costs that owners face in older homes include:

• Roof replacement
• Window upgrades
• Siding replacement
• Foundation stabilization and repair

The Financial Reality: Price Tag vs. Investment

Many who ultimately choose an older home do so, at least in part, because they tend to cost less up front. However, it’s a mistake to make a price comparison solely on the purchase/build costs. 

First, if you plan to buy an older home and renovate it, the costs of the renovation work may completely wipe out the money you saved on the initial purchase. Minnesota’s labor and material prices have been stubbornly high for years now. What’s more, old home renovations are full-custom jobs, which can result in hefty design and engineering costs.

Second, there’s the appreciation of the home to consider. Older homes are more likely to have issues that impact their long term appreciation, like the aforementioned maintenance problems. On the other hand, new construction homes are more likely to immediately appreciate in value, particularly as demand for Twin Cities suburban homes continues to climb.

Third, there’s the property tax spike on new homes that needs to be accounted for. When you buy a pre-owned home, its taxes will likely fluctuate somewhat following the sale. However, the taxes on a new construction home are subject to a much steeper hike, thanks to the property shifting from being taxed as ‘land only’ to a fully built-out new residence.

Living for Today: Modern Layouts for MN Lifestyles

Many of today’s most sought after floor plan features simply aren’t common in older housing stock, and are best obtained by building new. These features include:

• Mudrooms: New builds in Minnesota usually prioritize a large entryway, designed to accommodate bulky boots and winter gear. On the other hand, older housing stock often lacks this desirable feature completely.
• The Open Concept & Natural Light: Minnesota’s short winter days are best combated with large, strategic window placement. But older homes can be hit-or-miss on this feature. They’re much more common in new homes, particularly with floor plans that feature a multi-story great room.
• Home Offices & Finished Basements: It’s much easier to design a home with devoted office space from the get-go than to retrofit an existing floor plan. The same goes for finished basements, where overcoming damp, cramped conditions in an older home can be an expensive renovation battle.

Choosing the Right Path for Your Family

To summarize the pros and cons of each type of home, let’s wrap things up with a comparison:

New Construction Pros

• Modern building codes ensure energy efficiency.
• Modern designs accommodate today’s lifestyles and preferences.
• Minimal to no maintenance costs for up to 10 years.
• Opportunities to customize layout and finishes.

New Construction Cons

• Emerging neighborhoods may still be in the process of landscaping.
• Often farther afield.
• Property taxes spike when changing a plot from ‘land only’ to a completed residence.

Pre-Owned Pros

• Often in established neighborhoods with mature trees and landscaping.
• Unique historic charm and character.
• Initial purchase price is often lower than new construction.

Pre-Owned Cons

• Higher maintenance costs and larger, more frequent repairs.
• Outdated layouts can be dark, cramped, and restrictive.
• Higher heating and energy costs due to outdated building codes.

The Bottom Line: Both home types can be wonderful places to live. At Country Joe Homes, we focus on crafting bright, beautiful, modern residences and developing welcoming communities. And thanks to our semi-custom design process, you’re free to tailor your home’s design to fit your lifestyle. Check out our communities and our floor plans today, and talk to our team to see if a Country Joe Home is right for you!