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.