Trying to determine if it is smarter to buy than build in the current market. What is the best way to determine current building costs in our area?

Asked by Melissa, Morristown, TN Sun Jan 13, 2013

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Rhonda Sams, Agent, Morristown, TN
Mon Jun 10, 2013
I would consider buying rather than building. Existing home are more affordable right now than the costs of new construction
0 votes
JEKYL9, Home Buyer, Morristown, TN
Mon Jan 14, 2013
i've been doing mortgages for over 15 years now and this is one of the worst markets i've seen for building. if you're going to build most lenders are going to require 20-25% of the cost sourced and seasoned in a bank account because it WILL cost you more to build the house than what the appraised value is. the forclosure market has brought housing values and prices down in morristown. it took us about a year after the markets in FL, CA, and other places that got hit hard. fortunatly we haven't had such a massive hit to values as they did. last year i closed a mortgage on a house that was tax assessed at 320k and my client only paid 223k for it. the seller had paid 310k for that house just 5 years ealier. i know of other homes in morristown that i did mortgages on from 2005-2008 where they sold for much less than they appraised for those years. the good news is that it appears the market has bottomed out and rates are at an all time low.

i would definatly recommend buying instead of building and maybe waiting a few years for the market to come back before building. unfortunatly now when i see appraisals the cost approach (what it would take to build the home new) is always more than the sales comparison approach (what lenders use to determine the value). if you need a mortgage feel free to call me at 865 322 0984.

roy cook
0 votes
allan erps,A…, Agent, Pearl River, NY
Sun Jan 13, 2013
Athough Larry is right about costs of building a home, it seems the longer you wait materials will only be at higher costs to build. With present Mortgage rate and in my area I am seeing several builders that were sitting on land building again. best of Luck!
0 votes
My NC Homes…, Agent, Chapel Hill, NC
Sun Jan 13, 2013
Typically it's almost always less expensive to buy a pre-existing home than have one built. I've been a Broker and occasional home builder for over 25 years and have worked in a number of markets and have always found this to be the case.

The easiest way to get an answer to your question is to simply make some calls to local reputable builders in your area and ask what their charging.

Best of luck to you.
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