I believe it would be better to sell the property in question. Here's why... you would have the most expensive (and probably most beautiful) home in the neighborhood. That's always something buyers need to consider when buying a home. You don't always want to be the biggest or best in a neighborhood because the average home price will always be lower than yours. If a future buyer (of the home) would see the value and not mind paying the higher price for a newer and updated home, well that's a chance you will have to take. However, if you feel like you will stay in the home yourself for 10 years or longer and make some natural appreciation on it with a lower neighborhood value, then it might be worth your while. In addition you state that it will cost you $270,000 to build, is that in todays lower contractor prices to build or are you taking previous years costs. One last thought, would a buyer want to buy a custom built home in a non-custom built neighborhood? Something to think about. Hope this has helped you out. I am glad to try and assist you on this difficult decision.