You’ve heard me say over and over for a very long time now…“If you want to sell…sell NOW!” or “We have more buyers than homes to put them in!”…I’ve said so many other things just like that. Well, let me explain the severity of low inventory as I see it. Potential “home buyers” are turning into “home builders”. They’re starting to give up on the home owners that have such tight locked fists on their properties. They are saying “let’s look at land and we’ll just build”. OUCH!!! That’s not going to help our Real Estate Market and it’s certainly not a gain for the economy as a whole. But it does bring up something very important facts to look into and discuss, so let’s do that right now.
The US News published a fabulous article called The Do’s and Don’ts of Buying Vacant Land. This is a very easy to follow list of things to consider. They start by warning “…before you get serious about laying a foundation, be aware that a land purchase may yield more surprises than buying a home – from easements and zoning restrictions to environmental conditions that could easily turn your dream build into a headache the size of a McMansion.”
Here are their bullet points to consider:
- Do work with a pro who knows land
- Don’t expect to get a loan
- Do consider the value of homes in the neighborhood
- Don’t skip the survey or environmental tests
- Do take utilities and road access into account
- Don’t talk to the neighbors
- Don’t assume you can have property rezoned
HomeAdviser.com had some interesting numbers concerning the cost of building. So let’s say you spend $20,000 to $60,000 just for a piece of land. Then let’s consider the figures they report “…homeowners report the average cost to build a new house comes in at $289,215, which would put a 2,000 square foot home costing about $150 per square foot. This will obviously vary greatly with all the costly variables involved, so the cost could range between $150,219 and $429,102.” WOW!!! Resale homes are averaging nearly $50 LESS per square feet, not counting what you spent on a piece of land.
I realize that in some cases it’s a lifelong dream to build the perfect custom home, and for a select few it’s a very well thought out and researched plan. What I’m trying to provide here is the big picture for the “new home buyer” that is frustrated because they cannot find a house they want to call home. They have a wish list and the compromises seem too large with the lack of houses to choose from. I absolutely respect the disappointment. However, what goes up must come down. The selection won’t always be this scarce. Maybe it’s time to pull on the reigns for a minute, tuck away that extra money you would use to buy a piece of land that you may, or may not, ever get around to building on. Breath, relax, take a break…Real Estate will always be a constant moving element. Your new home will come!!! And guess what, I’ll be here to help you find it.
Please just consider all the additional headaches you may take on by rushing out to buy land instead of being patient. I hope this information was helpful. If you would like to talk further about your Real Estate options, please call/text me, email me, Facebook message me, send a carrier pigeon, whatever you need to do to get your questions answered…I’m never to busy to help you and the people you know.