Home Buying in 95628>Question Details

Robert Locke, Real Estate Pro in Fair Oaks, CA

Is it a good time to build a custom home?

Asked by Robert Locke, Fair Oaks, CA Mon Apr 4, 2011

With the price of construction & materials down and vacant land cheap...does it make sense to consider building a house to get exactly what you want vs. trying to find something that might fit your needs?

Help the community by answering this question:


Hi Robert,

Building a home can be quite time consuming, but with many areas having low inventory, it can be an interesting option.

Kind regards,

0 votes Thank Flag Link Tue Jul 21, 2015
The answer to this question will be different today than in 2011. But for those considering this now, I would suggest that in many parts of California, building a custom home makes more sense now. Prices are up considerably from 2011 so finding what fits your needs and gets you excited in an existing home will likely give you sticker shock. Construction costs still have not recovered as fast as housing prices so there is a nice differential there of which to take advantage. There should be a positive spread between your total project cost and your completed value.

I have been a loan officer for 20 years, and previously was a construction project manager. I know and love construction financing. If you are looking for a construction loan, give me a call.

Chris Hendricks
Senior Mortgage Consultant
Branch Manager
Homeowners Financial Group
Top Regional Mortgage Professional- Los Angeles Magazine 2014
Top 1% Mortgage Originator 2013- Mortgage Executive Magazine
p. 818.665.6066
0 votes Thank Flag Link Mon Jul 20, 2015
I think if you and your family are ready to build a home, then now is the right time. It is a process that can be somewhat stressful yet very rewarding. Your readiness to commit should be your deciding factor, not the current market. That being said, building while property costs are low is hugely beneficial. http://www.fox-construction.com
0 votes Thank Flag Link Tue Jun 16, 2015
It depends on the kinds of materials you want to use and the size of the home you're going to build. There are many variables that play into it, not just the cost of building supplies. You may want to sit down with a contractor and figure out the full cost and then compare it to just buying a house. Good luck! http://www.harringtonco.com
0 votes Thank Flag Link Mon Jan 26, 2015
I believe that building your own home is the way to obtain just want you have always wanted to create. Now is a good time to create your dream home. Happy building.
0 votes Thank Flag Link Tue May 6, 2014
This is great news because I did not want to purchase a home. I would much rather go with a builder and get exactly what I want. With a custom home, I could even get the indoor kennel that nobody else wants in their house.

Flag Thu Aug 14, 2014
It's a great time to build a custom home as land prices have dropped in some areas. There are some well priced lots out there!
0 votes Thank Flag Link Thu Sep 26, 2013
That is fantastic news. I am moving in a couple months, and I want to build a custom home. We currently live in a 30 year old property, and it has some interesting quirks. A home is a major purchase, and you should get what you pay for. I am tired of living with other peoples' designs.

Flag Mon Dec 8, 2014
Custom is great if you fit that mold at anytime! But when you ask what time it is I would have to say its time to grab a deal on a nice pre-owned home.
0 votes Thank Flag Link Tue Jun 4, 2013
Normally buying existing will save you money because a builder does not build to lose money so they do not offer as many incentives on a custom build, however if a subdivision is closing out there may be additional incentives offered. Good luck!
0 votes Thank Flag Link Tue Jun 4, 2013
Existing is typically less expensive than new, looking at your finances, comparing your wants and needs, will be the only way to answer your question.
0 votes Thank Flag Link Tue May 21, 2013
I have seen some people successfully build and even sell the homes. I also work with builders that with a deposit can build you a home and sell it to you with financing, which would make your loan terms much more favorable. Send me an email if you have questions - max@teamhybridre.com
Web Reference: http://www.teamhybridre.com
0 votes Thank Flag Link Tue Apr 10, 2012
Mid Atlantic and California must be drastically different, indeed, Jim. The sort of margins you described: 20 to 30% for tract homes and 25 to 35% for custom homes look like a green light to both custom home builders on spec and to tract production builders.

Do you have a lot of that kind of activity? Here in the Sacramento Region there are probably zero (one-off) spec homes being built today, nor planned for the near feature.

That is because custom home builders in our region have a negative margin. - Even if they could get a raw building lot for free. I'd like this to be not true, as I have some really nice lot listings.
0 votes Thank Flag Link Mon Apr 9, 2012
Jim Walker, Real Estate Pro in Carmichael, CA
I cannot speak to the California market, but I can speak regarding the mid-Atlantic market, and I must respectfully disagree with the comments already made. I think you can build with approximately a 20-30% discount in this market for a mid-quality home, and 25-35% discount for a high end home.
Of course, I am discounting the headaches, worry, and supervisory headaches that are sure to accompany the process. It is NOT for the faint of heart...
Best wishes, Jim
0 votes Thank Flag Link Sun Apr 8, 2012
It is difficult, but I think it's worth it. It depends on the person and how much work they're willing to put in. As for the timing, I don't think you'll find a better time to build a custom home. Land is cheap and the housing market is seeking clients. http://jpmoserproperties.com
Flag Thu Apr 30, 2015
For a custom home: The cost of land, design, utility connections, permits, mitigation fees, grading, construction, and landscaping will exceed the purchase money cost of a used house, or of a new tract home, with the same level of quality, amenities and size, in a similarly valued location. The time to go new custom is when the homeowner realizes that she will be paying a premium price to get exactly what she wants, and is okay with that.
Click on my link to see my custom lot listings.
0 votes Thank Flag Link Sun Apr 8, 2012
Jim Walker, Real Estate Pro in Carmichael, CA
I think it really depends on the situation. For a customer who won't settle for anything but perfection, then building should definitely be an option. Land is cheap and so is building, so why not. At the same time, there are a lot of homes on the market and the odds of finding a "gently-used" home that meets most of their criteria is pretty good, and that home is going to be more of a deal. Building is almost always going to be more expensive than buying, but in this case the old adage of "you get what you pay for" does ring with some truth! Hope this helps
0 votes Thank Flag Link Mon Apr 4, 2011
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