It's worth discussing a recent experience of a family looking for a home in Ann Arbor. After just two months of their contract, their water heater broke down, but thanks to the builder warranty for their new condo, they didn't have to pay a dime for repairs. In contrast, in a nearby complex with a building from the 1990s, it's common for homeowners or tenants to immediately pay hundreds of dollars for similar repairs. This highlights the importance of considering the repair structure, not just the price tag, when comparing new and existing homes.

According to RentCafe, the average rent for apartments in Ann Arbor is around $2,058 as of 2026, which is a 0.61% decrease from the previous year. Based on 175 new apartments listed on Apartments.com at the same time, the average rent for a two-bedroom is $1,955, while a three-bedroom averages $2,655. It's interesting to note that when comparing these figures, Ann Arbor does not fit the common 10 to 20 percent premium rule often discussed for new constructions nationwide. The strong demand for rentals from students near the University of Michigan likely contributes to the low vacancy rates for existing units, reducing the incentive for landlords to lower prices.

On the supply side, Ann Arbor is currently transitioning through a period of increasing student housing and general rentals. The University of Michigan's Wolverine Village plans to supply 2,300 beds by the fall of 2026, with the 15-story Hub Five Corners project underway, providing 1,217 beds. Additionally, a 330-unit project for low-income families is included at 350 5th Avenue downtown. It's important to keep in mind that just because new constructions catering to student demand are increasing, it doesn't mean that new rentals for general families will become cheaper immediately.

When narrowing down to neighborhood levels, the disparities become even more apparent. New high-rises near downtown and South University are generally popular with students and young professionals, with amenities like elevators and package rooms reflected in the rental prices. In contrast, older neighborhoods like Kerrytown and Burns Park have many small existing units converted from single-family homes, allowing for more spacious options within the same budget. The recent approval of a density expansion land use plan by the city supports this trend. With announcements of 1,200 permanent rental units for low-income families in the pipeline, it seems likely that new supply will continue to grow in both student and low-income categories over the next few years.

The advantages of new constructions can be summarized easily. They feature the latest insulation and smart thermostats, which help reduce heating and cooling costs during Michigan's harsh winters compared to existing homes. As mentioned earlier, warranty repairs are available for equipment failures. However, existing homes may carry the risk of needing replacements for costly components like plumbing and roofs, which could be approaching their end of life. In areas at risk of winter pipe bursts, older plumbing can heighten this risk.

Conversely, the strengths of existing homes should not be overlooked. Neighborhoods like downtown, Burlington, and Old West Side in Ann Arbor boast mature landscaping and walkable infrastructure, along with highly rated elementary and middle schools that are consistently favored by Korean families. However, school district boundaries can change frequently, so it's essential to verify the assigned schools for a given address through GreatSchools or Niche ratings before signing a contract.

New condos or townhouses tend to see an increase in HOA fees as community amenities grow. For families moving from out of state to Michigan, it's wise to factor these fees into monthly expenses as a fixed cost. Ultimately, deciding between new construction and existing homes seems to depend on current monthly budget flexibility, the ability to handle significant repair risks, and the desired neighborhood atmosphere. Since tax and rental laws can vary by county, this article does not constitute investment or legal advice, and it's advisable to consult a real estate professional before finalizing any contracts.