Hey all -
So, Jurphette is pregnant, and we’re going to need more room than our cozy eleven-foot-wide rowhouse when the baby arrives. I’m considering buying a place in downtown Baltimore, and right now I’m leaning towards a new construction. There are comparable houses in the neighborhood that are renovations, but the new home comes with a warranty and a tax abatement (it’s built on a brownfield reclamation site and the city really wants to encourage people to not live out in the suburbs). Here are my two options:
New construction
$360k for 3BR/3BA
includes all closing costs
tax abatement means annual taxes approach $4k (after 5 years the abatement goes away and they’ll return to being between $6k and $8k)
HOA fee of $75/mo covers trash and landscaping
Garage parking
2 year comprehensive warranty, 10 year structural warranty
Renovated house
$300k for comparable 3BR renovation
annual taxes approaching $6k
doesn’t include realtor’s closing costs - some properties offer incentives toward closing
no garage properties in the area
no warranty on owner’s renovations (and average house in the neighborhood is brick, over 100yrs old)
So the big question is: is that warranty and the garage parking worth $60k? If I discover a leaky roof, flooding basement, or serious structural flaw after moving in, how much worse than $60k could repairs be? The new construction appears very nice, and the walls look and feel pretty solid, in contrast to a lot of the cardboard McMansions going up in the suburbs.
Do any of you have experience with new construction turning out to be crap? How about renovations going south?
Also: the university in the neighborhood is investing a ton of money nearby, and the city is reclaiming abandoned houses and turning over huge chunks of land to small businesses and developers. With all that money coming in, am I right in thinking that my situation is significantly different from most of the (inflated) market, and that I can rest easy about losing equity?