"Why would it? Because if I have $100,000, I can buy a $100,000 untaxed existing home, or I can buy a taxed new home and need an extra $23,000 in tax (or alternatively, I can buy a lot less house and pay the tax and house out of the $100,000)."
The 100K new home would need to be much bigger than the 100K used home in your example. The land has already been taxed, therefore if you assume paying tax on 100K new home and no tax on the land, the home must be bigger than the 100K used home plus land.
Ten grand for the land in either example, leaving me 90k for house in either example. If it's existing, I get 90k of house. If it's new, I have to spend 90k on house and tax, so I only get (about) $72,000 of house (with the other 18k going for tax).
In that situation, I want the existing home, because I get to spend the entire $90k on house, not just $72k. I get $18k more house.