Real Estate News

When you are looking for a house, you might find yourself frustrated with the lack of available homes on the market in your area. The real estate market is hot right now, and homes are selling in record time. The highly competitive market is causing house prices to increase as well. Many homes are even selling for above asking price, which can make potential buyers wonder whether it is cheaper to buy land and build a house instead. If you are in the market for vacation homes in Davenport, Florida, then you might also be wondering if building a house is cheaper than buying. There is a lot that goes into buying a home and also building one from scratch. Here’s what you need to know about buying vs. building a house.

Decision Factors for Buying vs. Building a House

Here are key factors in determining whether you should buy or build a house.

Location

The cost of building a house vs. buying will differ dramatically depending on what area of the United States you are looking. The location of a home has a huge impact on the choice to buy vs. build a home because of state and local rules and regulations. Regional differences can also have a significant impact on the cost of labor and building materials needed to build a house. While Florida rules and regulations make building a house a more expensive option, Florida cities also feature great rates on investment properties.

Land

The land for a home is easily overlooked but actually very important to the home buying or building process. When you buy an existing home, you are also purchasing the lot as part of the property. However, a new build will not include the lot price, so you will have to purchase the land first before building a home. The price of land also increases in urban areas where space is more limited and therefore at a premium.

Square Footage

The average square footage of a home also varies by location, including state, region, and even urban versus rural areas. The average square footage of a home in Florida is approximately 1,300 square feet. The square footage of a home will vary depending on the size of the lot and the number of bedrooms and bathrooms in the home. The size of the home can influence the decision to build vs. buy a home when you are looking at the median price per square foot of home prices in the area.

Materials

Just like the housing market, the prices for materials needed to build a home can fluctuate with real estate markets and supply chain constraints. The cost of construction is currently higher than average due to supply chain issues with imported tools, which has caused home building prices to increase. There is also currently a shortage of building materials available for home builders, which makes buying an existing home a better option in the current market.

Customization

There are many different ways you can purchase a newly built home. Some neighborhoods and builders offer standard production packages where you select the floorplan, and the builders follow that blueprint. Developers may also offer personalized production homes, sometimes referred to as semi-custom homes, where you can also select options for upgrades and personalization. A fully custom home is one that is designed exactly to your specifications. Customizable options are alluring for home buyers, though these often come with a high price tag.

Maintenance

In addition to the listed price of a home or the purchase price of a new build, you also want to take into consideration the cost of future maintenance. Purchasing an existing home may come with outdated appliances that need updating or require a new roof in a few years. New homes are typically built with more energy efficiency and include current models of appliances and more features. Maintenance costs may not start to build up with a new home for decades.

Is Building a House Cheaper than Buying?

Visit Florida Realty Marketplace to learn more about building or buying and vacation homes in Davenport, Fl.