Cheaper homes, but more repairs as U.S. houses age

If you are in the market for a new home, you have probably noticed that almost all the houses in your local listings are anything but new.

According to a recent survey from research firm RealtyTrac, 71 percent of U.S. single-family homes were built before 1990. In some states, particularly in the Northeast, pre-1990 houses make up 80 percent of recent sales.

Furthermore, builders have focused on multifamily homes, and individual buyers have not had access to all the new single-family houses coming to market.

"Wall Street-backed money has scooped up newer homes to use as rental properties," said Daren Blomquist, vice president of RealtyTrac. "That's pushed the already-low new-home inventory down to record levels."

Sara Winter and her husband had to scratch a new home off their list when they searched for their first house in the New Jersey suburbs last year.

Still, the couple found it an easy tradeoff. "In the areas we were looking, it's either very old or brand new, and the new would cost hundreds of thousands more," says Winter, who in June moved into a Scotch Plains, New Jersey, house built in 1953. "We were willing to do some updating, and older homes have charm."

According to RealtyTrac, the average pre-1990 home recently sold for 9 percent less than a newer one in the same market. In areas like Cleveland, Pittsburgh and Detroit, where there are big supplies of older homes, the differences were even more marked: These houses cost less than half what newer ones fetch.

The age of the home and its location factor into its price, too. Pre-1940 houses tend to be ample in size and often have features buyers associate with old-world charm, such as sweeping staircases, exposed brick and crown molding. Particularly in gentrified areas of large cities such as Boston and Houston, homes built in the early 1900s often command a premium to more contemporary ones, notes Kolko.

By contrast, postwar-era homes tend to have cookie-cutter designs and features that have gone out of fashion. And the average house built in the 1940s lacks closet space and is nearly 50 percent smaller than today's typical new home.

REHAB ISN'T FREE

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Cheaper homes, but more repairs as U.S. houses age