You have a budget of $750k for a single-family house. Value wise, do you buy in this market or do you build?
If you found a home that met your needs and location I would buy. If you want to save some money and have time to build it could be worth it, or it could throw you a few curve balls.
The market is still brisk. Building allows you some time, flexibility, and control. Many builders take contingencies on selling your existing home. OK, question, do you currently own a home?
build...no question about it. but buy outside of flood plains and in places with a healthy water supply. but drainage. Personally would avoid beachfront at all costs..put in RV hookup...buy a used RV and stay in it until the house is done then sell the RV...houses go up really quickly...just want to make sure where they are built is compacted well and not going to shift or swell or shrink much after you build..don't build on landfill helps that out. Building a house you can have exactly what you want instead of exactly what someone else wanted.
Do you have $750k in cash or are you financing because if you're trying to build new in this market, and the rates keep going up and up and up, guess what happens? You get to wait until it's done to lock in your rate. We're really glad that we didn't opt to build because we'd be getting screwed right now. Also, apparently the cost of materials can fluctuate, so just because the builder quotes you one price at the beginning doesn't mean that it will necessarily be that price at the end.
Nah. Rates are still historically low. 5%. Yes they were lower but they are not at 9 or 10%. Anything under 7.5% is still better than most of the last 50 years.
and buying existing houses also comes with unknown expenses...my son has had to replace plumbing, air conditioning units, roof and build a new bathroom since he bought his house in 2017....it's a nice house but he would have designed it differently if he'd built it and remodeling has the same material costs that building does except for more labor factored in the cost...
I have a client who is building new. The house is taking several months longer then was projected and with the increased interest rate they are going to be paying about 800 more a month. So if you are going to build beware that your payment could end up being much higher if the rates keep going up. It is nice having a brand new home, but also a little more risk with it.
in our brand new development, the house prices are crazy. If you want our model (2100 square foot house) today, you’ll be paying $70K more than we paid in November. And our interest rate is sub-3%. Ain’t happening now. Our development is way behind and struggling to find materials, and they’re one of the largest developers across 25 states. I’d love to build myself a new home, but I’d hate to be a small guy fighting for materials right now.
Our house that we sold probably went up about 20-30k in value just in the few months that we were getting ready to sell and looking around. The rate at which house prices are increasing is insane. I think it will slow a bit because of the higher rates though.
People weren't paying 500k... 700k..... 900k for houses when the rates were a lot higher. My parents paid like $20k for their first house in the late 70s. It's simply not the same ball game.
Another way to look at it is If you are building your own home yourself you will not need the amounts of materials as quickly to keep the crew going. Another important issue is having somewhere to live while building. Sometimes that is a trailer on site? No problem getting Concrete or foundational materials. Wood for framing and siding/roofing is available. Most of the electrical and Plumbing materials are available. Once the roof is on the building can slow down if you are building it yourself. Seems like specialty materials are the big problems. Cabinets and interior amenities are slow.
For my son his bathroom tiles and counter tops were the only holdup but the framing, water barrier, electrical, plumbing and fixtures were all available...some things you might compromise as far as style of faucet etc but he just finished turning his old laundry into a big master bathroom a few months ago...they also moved his laundry setup into his garage and plumbed and wired it...all in all it ended up costing 28K but increased the value of his house a lot more than that. It's why I suggest an RV hookup with power and septic installed ...then you pour a foundation...from there you can take your time and not be stressed for a finished product right away....I think in rural property terms though and forget some folks want an urban home..they are different scenarios
Yeah the numbers I have heard is last year prices appreciated 17% this year it should be closer to 3-5%.
That's exactly what I've been seeing. Bigger general contractors are trying to buy larger quantities though and they are having trouble. Those people buying smaller amounts are having little trouble finding what they need. Bigger contractors want larger quantities so they can cut costs down. Give and take.
Our builder is having difficulty sourcing windows. It’s not just specialty items at this point. As someone mentioned earlier, your loan is only a construction loan until the house is finished. So going slow is great…. But the risk is that the interest rate on a mortgage is only going to continue to increase and when construction is complete and you have to roll into a typical mortgage. I’m all for building your own home and having a certain amount of control and freedom. I’d love to. But it seems like a riskier time than usual to do so at the moment.
