Did you purchase the lot within the last 8 years when the real estate market was booming? Shaver experienced some tremendous price appreciation over the last 12 years; however the market finally peaked in early to mid 2006. The delimena you are facing is not unique because I believe a fair number of buyers are under water today who purchased during the once in a life time boom (2000-2006). The market is flooded with inventory today in & around Shaver and demand for vacant lots has collapsed.
This boom at Shaver was never going to end in if you listened to some of the realtors and experts in the area; however prices were going straight up year after year and the fundamentals were finally disconnecting from reality in 2003 and then finally in 2006 the land price bubble final burst in Shaver. The numbers are a true reality check and bad things are in fact only 12 lots sold in 2007 and I believe 7 lots sold in 2008. This is downright scary; however the economy is dictating the marketplace. Why would you really invest in Shaver if you were a potential buyer when you see so many sellersâ€™ heading for the exits (i.e. for sale signs)????
The Shaver MLS currently has 65 lots for sale and then you add in 17 at TimberRidge for sale by the developer, 103 lots still for sale at Quartz Mountain by developer you quickly realize we have enough vacant lots right now for 20 years in my opinion. This will place substantial downward pressure on land prices for years to come.
The market for cabins and homes is a little better; however prices are falling and short sales and foreclosures are starting to increase in Shaver. Cabins have fallen in value since the market peaked; however it depends on the subdivision in terms of the actual price declines for example I have noticed Cabins at Sierra Cedars lose 40% of there value in just three years. Now properties in Granite Ridge have held up much better; however the next big price declines will come at the top of the market $800K and up.
This market has now also gone into a deep freeze in fact not one single home in the last 12 months has sold for more than a 1 million dollars in Shaver. Why jumbo financing (i.e. rates, tighter loan standards, bigger down markets and the big declines in stock prices). The high end is headed down over the next 24 months at Shaver and I would not be surprised to see 30% declines or more going forward.
Where is the lot located (West or East Village, Granite Ridge, TimberRIdge, Quartz Mountain, Bretz Mountain, Sierra Cedars, Ockenden, Wildflower, Littleridge, Appleridge & Ridgetop)? The reason why I'm asking is because each development has their own building requirements (CCR's). What is the minimum size cabin/home you can build? How is the topography of your lot? Do you have a flat lot or does it slop uphill or downhill? How much will the cabin cost to build per square foot? Have you factored in cost overruns, leveling the lot, the permit ? What about financing this cabin will you utilize (construction loan) and what type of rate will the bank approve? Why?
Well you have already invested $168K plus interest on your ARM loan according to your question. If for example the cost to build a 1600 sq. ft cabin w/ a 2 car garage is $280,000 including everything (cost overruns, delays and unforeseen expenses) then your overall costs for the lot and cabin would be $448,000.00 before carrying costs on the loan. How much would the 3/2 cabin be worth? Can you sell for $448K; however that will not be enough because realtors charge between 3-6% to sell properties & closing costs.
What type of competition will you have once this cabin is completed? For example a nice cabin just sold at Sierra Cedars for $400K and it was 1904 sq. ft., 4/2 on a flat lot (14,605 sq. ft). Another cabin in Wildflower Village sold a few months ago for $525K it was 2752 sq. ft., 3/3 on a lot that sloped uphill (24,300 sq. ft.). I was just pointing out the differences in the recent sales in 2 different subdivisions. If this cabin is finished in June and you list it for sale I would suspect the inventory will be higher than where we stand now. Currently there are 62 cabins for sale in Shaver.
Please remember you should build a smaller cabin because the trend in Shaver and around the country will be smaller homes/cabins over the next 20 or 30 yrs. The changes are happening everywhere and the momentum is clear. Why do second home buyers want a 3K, 4K or 5K sq. ft. home? This is another reason why the high end at Shaver is hurting so bad because who really wants to keep up a huge Mcmansion you only visit 10 times a yr.? Remember when the going gets tough like today and owners who are having trouble will let their second homes go.
I'm not a realtor or appraiser. I have gone to Shaver since 1980 and I know the market place. This is a buyers market going forward and prices will drop. This is my honest opinion based on the facts.