At $2–5M, Are We Better Off Buying a New Build or an Older Character Home in Encino, Sherman Oaks or Calabasas?

Short answer: At $2M to $5M, I lean toward the older character home on a great lot in Encino or Sherman Oaks if a renovation is likely anyway, because land and position are what hold value. If you have no bandwidth for a project, or you're buying in Calabasas where the appeal is newer homes in gated communities, a new build is often the better fit.

This is one of the most common and emotionally loaded questions in the $2–5M range: "Do we buy a brand new, done house… or the older one with better bones and street, and take on a project?" You're basically choosing between convenience premium and long-term potential.

My personal bias is toward the older character home at this price point, and I'll admit that. But I've also watched buyers choose the new build and be very happy. The question I always ask is: what are you planning to do to the house in the first three years? If the answer is nothing, new build has real appeal. If a renovation is happening anyway, the character home usually makes more sense.

What a New Build Usually Means in This Band

In Encino and Sherman Oaks, a $2–5M new build is typically 3,800–6,000+ sq ft, high ceilings, open plan, big island kitchen, light floors, white walls, black or brass accents, large sliders opening to the yard, pool, built-in BBQ, fire pit, new roof, new systems, often smart-home wiring.

In Calabasas, newer homes live inside gated master-planned communities with more standardized elevations and floor plans prioritizing functionality: great rooms, upstairs bedroom clusters, lofts.

Upsides: you move in and live, no major work, easy to furnish, easy to photograph, broadest appeal when you sell in 5–10 years.

Downsides: you're paying the developer's profit margin, finishes can feel repetitive, and new builds are often on whatever lots were left, not always the best positions.

What an Older Character Home Usually Means

In the better pockets of Encino and Sherman Oaks, lots were chosen decades ago and are often better situated: flatter, better views, better streets. Real architectural interest: Spanish, mid-century, traditional. A sense of maturity with established trees, layered landscaping, neighbors who've been there 20+ years.

Upsides: stronger long-term value on the right street, a home that feels like yours rather than a copy of the latest trend, often better underlying proportion and flow once opened up.

Downsides: renovation stress, older systems that can surprise you, and it's easy to either under-renovate or over-improve for the street.

In Calabasas the character versus new split is less stark. Most of the appeal is in newer planned communities.

How to Think About It at $2–5M

Lean new build if you have zero bandwidth for a project, want to be settled within 30–60 days of closing, are comfortable with finishes that are of this moment, and see this as a 5–10 year house.

Lean older character if you care deeply about lot quality and long-term feel, are willing to think in stages, would rather spend your budget on location and land, and don't want the same house as everyone else.

Neighborhood Notes

Encino: some of the best long-term plays are older homes on prime south-of-Ventura lots. The right renovation here ages very well.

Sherman Oaks: new builds move well, but a well-renovated older home on the right block south of the Boulevard holds its appeal.

Calabasas: the case for new is stronger here. The value proposition is newer homes in cohesive gated communities.

The Short Version

New builds buy you time, ease, and broad appeal at a premium. Older character homes on the right lots buy you potential and uniqueness at the cost of effort.

If you know in your gut you're not going to survive a major renovation, lean new. If you care more about where and what the property is long term than what it looks like in year one, the right older home is often the smarter move.

A few questions I get about choosing between new and character homes at this price

If I buy an older home in Encino or Sherman Oaks, how big can I build?

It depends on the zone and the lot. The City of Los Angeles has a Baseline Mansionization Ordinance that caps a single-family home's floor area as a share of the lot size, with separate rules for hillside lots. Before you buy something with plans to add on, look the parcel up on the city's ZIMAS site and have an architect confirm what's actually allowed.

Will renovating an older home raise my property taxes?

Some of it will. Under Proposition 13, additions and work extensive enough to make part of the house "substantially equivalent to new" get assessed at their current value and added to your existing assessment. Replacing something worn out with the same kind of thing is treated as normal maintenance and isn't reassessed. Budget for the tax on any square footage you add.

What should I know about wildfire zones before buying in Calabasas?

Look the address up on CAL FIRE's Fire Hazard Severity Zone map, which the city points to and which was updated in March 2025. Homes in high or very high zones come with defensible space requirements, and new construction there has to meet the state's wildfire building standards. If the house was built before 2010, the seller has to give you a fire hardening disclosure, and I read it alongside the insurance quote before we remove contingencies.

Do newer homes in Calabasas come with extra taxes or HOA dues?

Often, yes. Gated and planned communities usually have HOA dues, and some newer developments in California carry Mello-Roos special taxes on top of the regular property tax. Sellers must make a good-faith effort to give you the Mello-Roos notice, which shows the current and maximum annual tax, so add both numbers to your monthly cost before you compare a Calabasas house with one in Encino.

Keep reading: New Build vs Older Home, What Buyers Expect at $2M to $4M in 2026 and Encino vs Sherman Oaks.

Thinking about buying in the Valley? Here's how I work with buyers.

Anj Catalano The Agency | Studio City 310.404.6955 hello@anjinla.com anjinla.com