Is Buying a Home Like Buying a New Car?


How does buying a new home compare to buying a car? Today, I’ll break down the key differences.

Looking to buy in Alaska?  Get a full home search
 Looking to sell in Alaska? Get a free Home Price Evaluation

I’d like to thank Brendon DeSimone from Zillow for the question of the day: “Is buying a home like buying a new car?”

When you drive a new car off the lot, it immediately loses some of its value. Does the same apply to real estate and, if so, should you care?

The main thing to know is that real estate appreciates. It doesn’t depreciate unless you’ve really bought the wrong property. However, in real estate, time is on your side. 

If you close on a home, the day after you close, you’ll be in what’s called a negative equity position. That doesn’t mean that you lost value; it just means that you’ve spent money and it hasn’t yet appreciated to make it worth your while to sell it at that time.

If you could stay in the home for three or more years, generally speaking (and especially in the interior of Alaska), you’ll be in a positive equity position.

This is opposed to buying a new car, which only continues to depreciate over time. You can look at economic trend graphs and see that, over the years, the real estate market is one of the best markets that we have in the country.


New cars only depreciate in value over time.

Another question is: “Does the new car theory apply?”

There are definitely pros to buying a new house versus an existing house, but you want to realize that, though your home may not be worth as much as a brand-new comparable home, it has appreciated from the time when you bought it. We don’t compare an old home to a new home when we’re doing price valuations.

The maintenance of a new home versus an existing home is also worth considering. You may believe that buying a new home will entail fewer maintenance tasks. In Alaska, there are preventative maintenance items that are necessary for any home. But a new home comes with warranties. The builder matters as well. If you’re buying from a reputable builder, you have product warranties on the appliances, a one-year builder warranty, and a 10-year structural warranty.

If you’re buying an existing home, one of the things to think about is buying a third-party warranty. That way, you can compete with the peace of mind that new homes bring.

Lastly, I want to make sure that you understand that it is a home first and an investment second. Even though buying a car that depreciates as soon as you drive it off the lot doesn’t seem to make sense, people see cars as a necessity. They want something comfortable to drive to work every day or something safe for their family. It’s the same thing with homes, so don’t get too wrapped up in the investment aspect of it. Just enjoy the home the same way you would with a car.

If you have any questions regarding real estate, feel free to reach out and contact me. I may use your question to make another video for the blog.

22 comments :

  1. Thanks for sharing this interesting post here, your video is very informative and it is very useful for us. If you are interested in Beach Houses For Sale In Biloxi Ms, Contact us.

    ReplyDelete
  2. It's great to learn about how to buy a house from your blog. Thanks..


    Reference: How to buy a house - by Homeia

    ReplyDelete
  3. Next you want to list how much you are going to give. Giving is a very important, this can be giving to charity, giving of gifts to friends and family, giving to your school or anything you can dream of. daintree residences

    ReplyDelete
  4. Since most new Real Estate Agents have never been in business for themselves - they've just functioned as workers. They, erroneously, trust that getting into the Real Estate business is "getting another activity." the opus

    ReplyDelete
  5. My friend recommended this blog and he was totally right keep up the fantastic work! https://www.valsqld.com.au/

    ReplyDelete
  6. I'm impressed, I must say. Very rarely do I come across a blog thats both informative and entertaining, and let me tell you, you ve hit the nail on the head. Your blog is important.
    best time to buy a new car

    ReplyDelete
  7. I just want to say you that, the article contain lots of stuff which help me lot. I think the content covered in the blog is quiet impressive. If anybody is looking for the property then you can visit on vancouver property for sale

    ReplyDelete
  8. This book gives you step wise extensive guide along with three golden lessons that helps your kids learn all the right things about survival Choose a handyman or contractor

    ReplyDelete
  9. I think this is definitely an amazing project here. So much good will be coming from this project. The ideas and the work behind this will pay off so much. gutter repair raleigh nc

    ReplyDelete
  10. I think this is definitely an amazing project here. So much good will be coming from this project. The ideas and the work behind this will pay off so much. Keep your gutters clean

    ReplyDelete
  11.  If someone week i really ashen-haired not actually pretty, whether you will lite grope a present, thought to follow us to displays bursting with ends of the earth considerably? Inside the impeccant previous, sea ever have dried-up, my hubby and i only may very well be with all of you connected thousands of samsara. Gutter Contracting company

    ReplyDelete
  12. Amazing article, Which you have shared about the real estate. This article is very interesting and I liked to read it. If anyone wants to Appraisal the home, then visit at Home Appraisal in San Diego

    ReplyDelete
  13. Amazing article, Which you have shared about the home and real estate. This article is very interesting and I liked to read it. If anyone looking to buy multi Family Homes, then visit at home-mega.com

    ReplyDelete
  14. Nice article, which you have described very well about the house. Your article is very useful for those who are looking to buy Real Estate at online. thanks for sharing. House and Land Packages Mt Maunganui


    ReplyDelete
  15. I am glad to read this post, its a good one. I am always looking for quality posts and articles and this is what I found here, I hope you will be adding more in future. Thanks for sharing. Real Estate Agent Websites Development

    ReplyDelete
  16. You have shared a nice article about real estate. Your service is very interesting and useful. I liked it. If anyone looking to real estate valuation, then visit appraised value of property

    ReplyDelete
  17. If you are someone looking to buy homes, you can look for our blog that describes about 5 metro Phoenix areas with the biggest increases in home sales. You can opt for Vancouver Real Estate Agents for more information.

    ReplyDelete
  18. This is a great blog that explains the importance of how buying a home like buying a new car. It is always a good option to consult commercial property investment UK for a wide range of services.

    ReplyDelete
  19. Such a nicely you describe the importance of the house. Buy your house home-mega.com is the best place who will advice you the best house for you. Get more details by visiting on house for sale in queens

    ReplyDelete
  20. Thanks for sharing such an informative blog that explains you need to have lawyers in Real estate business. It is always a good option to hire real estate lawyer Miami Fl for more information.

    ReplyDelete
  21. I am glad to read this post, it's a good one. I am always looking for quality posts and articles and this is what I found here, I hope you will be adding more in the future. You can opt for quality property rental agencies hua hin for wide range of services.

    ReplyDelete
  22. I found so many interesting stuff in your blog especially its discussion. If you are looking for the buy any property then, Home-Mega.com is the best place to buy a house from real estate. For the more details you have to do just one click on houses for sale Queens NY for more information.

    ReplyDelete