Right now we are seeing home prices increasing. The cost of lumber has almost trippled at this point and doesn’t look like it is going to slow down anytime soon. So what does that mean for you?
First thing first, know that homes are not priced based on what it cost to build them when selling. Yes, when you purchase a new build, you are most likely paying in that circumstance what it cost to build the house. But, in 5 years, that is not going to have any effect on how the home is priced to resell. What determines the price at that point is how much similar homes are selling for at that point in time. What this means is, you could pay $250,000 to build a brand new house today, but when you go to resell it in 5 years, it could potentially only be worth that, or maybe a little more. At that point, after interest and fees, you lost money. No one wants to lose money!
So what should you do then? Well, I recommend waiting. Buy your land now and start paying on it. Honestly, sometimes land takes longer to find. Pay off the land now so when you want to start building, it won’t cost as much, because hopefully at that point, prices will have come down, and you won’t have to pay on the house construction AND land. Most builders are so booked up with homes to build they are turning people away! The future is so incredibly unpredictable at this point, don’t take any chances unless you are 110% sure that the home you are building is going to be your forever home.
*Sometimes* you can get lucky with a national builder who can build homes for slightly cheaper because they order supplies in bulk, but usually they are working in a community. So if you want to be in a neighborhood, this may be the best option! The local, smaller, contractors who build on private property, don’t have the luxury to buy in bulk so they are going to be a little bit pricier.
I say be patient, but that is easier said than done! I don’t want you to get stuck into something to lose out on it. Find your dream property, continue to save up money, and when the time is right, you will get your dream home build in an area you adore.
I hope this helps you. As always, if you have any questions, comments, or concerns, I’m always here to chat.
Amber Fleck- Realtor 