In a seller’s market, buying a house can be a daunting task. In October 2021, the median sale price for a single-family home in California was $798,440, up 12.3% from the year before. That means buyers are currently shelling out way more money for houses, and have less bargaining power with sellers than they did in years previous.
You may have considered building your own home. But how much does it cost? The median cost to build a new home in the United States was $283,044 in 2021, according to HomeAdvisor.
But if you don’t know what you’re getting yourself into, building a home from the ground up can be a complex and messy project. You can even end up spending more than you would on an older house. But if you play your cards right — and work with a professional company like California’s DYM Builders — you can create your dream home for the same price or less than a resold home.
Here are some factors to consider when making the choice.
COST OF LAND
To build a new home, you’ll have to first purchase a lot of land. The cost of land varies greatly depending on its location and size. Buying land in a city will be much harder than purchasing land in a more rural area. For example, the average cost of an acre of land in California is $39,092. But an acre and a half of land in Silicon Valley sold for $6.9 million in 2017!
Additionally, lots that are already hooked up to public utilities might be costlier than completely off-the grid lots. You’ll have to contact your city, county, or municipality to get “on” the grid.
You can also opt to purchase an already-existing home and demolish it before building a new home. For example, buying a foreclosed or “fixer-upper” house on the cheap and demolishing it can still lead to a lower cost than buying a ready-to-go house.
You’ll also have to factor permitting, demolition, and house designs when considering the cost of land.
COST OF MATERIALS
While housing costs have skyrocketed during the pandemic, so have the costs of raw materials. Shipping costs and labor shortages have made it much harder to obtain materials such as wood and metal. However, your costs will vary with the type of materials you choose.
Working with a contractor like DYM Builders makes it possible to price out your entire project, from materials to cost of labor. Depending on your market, these costs can vary greatly.
SIZE AND STYLE OF HOUSE
Of course, if you want a unique style of house, building it is your best bet at getting exactly what you want. Do you dream of floor-to-ceiling windows all throughout your living room? You can build that. Do you want a beautiful A-frame with wooden finishes? You can build that. Everything will be brand-new and exactly to your preferences, unlike a ready-made house.
Some types of houses are much more affordable to build than others, such as shipping container homes or tiny houses. On the other hand, you can build something extravagant and lavish to your every detail, and possibly spend more than you would on an already-built home.
Obviously, if you need a place to live now or are looking to make an investment soon, buying a house that already exists is the way to go. Buying land and constructing a house will take much longer, especially with material and labor shortages. Building a house is for those who already have a place to live in the meantime, who can spend the time necessary to create their dream home.
WORKING WITH A PROFESSIONAL
Unless you’re an architect, you’re going to need to hire a professional contractor for your construction project. MAke things easier for yourself by hiring an architect, engineer, and designer all under the same roof. The team at DYM Builders can make your dream a reality. From design meetings where you’ll receive renderings of your finished project to team members who can take care of all permitting and planning, DYM has it under control.