Deciding between buying an existing home or building a custom one in the Knoxville Tennessee Housing Market is a significant choice, influenced by factors such as cost, customization, and personal preferences. Despite East Tennessee price increases in recent years, building tends to be pricier due to inflation and supply chain challenges. When considering the pros and cons, building a house offers the allure of customization, low competition, minimal maintenance, low energy costs, and the joy of newness. The Knoxville Tennessee housing market does have some drawbacks including a lengthy wait, non-negotiable pricing, potential noise and mess during construction, stress, and hidden costs. On the flip side, buying an existing house promises a quick close, negotiation room, and the advantage of an established location. Yet, challenges include potential repairs, compromises on wish lists, updating previous owners’ choices, and environmental concerns. Ultimately, the decision to buy or build hinges on individual circumstances, with financial prudence and lifestyle considerations playing crucial roles. This blog post, was inspired by insights from the popular local radio show “Real Estate with Ryan” by Ryan Coleman Broker/Owner of Hometown Realty, discusses in detail and breaks down the costs, pros, and cons of building a house to help you make an informed decision as we approach the 2024 housing market.
Is It Cheaper to Buy or Build a House?
In 2022, the average cost to build a new home was $644,750, while buying an existing home averaged around $535,500. Although prices have risen in recent years, building tends to be more expensive due to factors like inflation and supply chain issues.
“The cost to build a new home has increased with inflation and from lingering pandemic supply and demand issues. And with that, new housing starts decreased throughout 2022, declining by more than 27% over the year. Of course, that’s not a blanket statement for every area. Many factors impact local markets, creating differences in new home start projections and the labor and material costs to build homes in each state.” – Today’s Homeowner (November 7, 2023)
Custom Building Your Own House vs. Buying an Existing Home
The choice between building your own house and buying an existing one is a deeply personal decision shaped by various factors. Opting to build offers the enticing benefits of customization, limited competition, minimal maintenance, energy efficiency, and the allure of a brand-new living space tailored to your preferences. Yet, it comes with its set of challenges, including a substantial waiting period, non-negotiable pricing structures, the unavoidable noise and mess of construction, the stress of managing the intricate building process, and the potential for unforeseen hidden costs. Striking the right balance between these advantages and challenges requires a thoughtful consideration of individual circumstances, financial capacity, and lifestyle preferences.
Pros of Building a House
Customization: Tailor your home to your preferences.
Low to No Competition: No bidding wars when you own the land.
Little Maintenance: New homes meet current codes, reducing repair concerns.
Low Energy Costs: Energy-efficient systems result in lower bills.
Newness: Enjoy the freshness of being the first owner.
Cons of Building a House
The Wait: Construction takes an average of seven months.
Nonnegotiable Price: Limited room for price negotiation.
Noise and Mess: Construction inconveniences in the neighborhood.
Stress: Managing details and expenses requires patience.
Hidden Costs: Upgrades and unforeseen problems can increase expenses.
Pros of Buying an Existing House
Quick Close: Move in within 30 to 45 days.
Room to Negotiate: Negotiate on price and repairs.
Location: Save money on the home, invest in a desirable neighborhood.
Cons of Buying an Existing House
Repairs: Older homes may require costly repairs.
Compromises: Finding a perfect match for your wish list is challenging.
Updates: Expect to spend on updating the previous owner’s choices.
Decide to buy or build with confidence
Navigating the journey of homeownership involves financial wisdom and thoughtful decision-making. When it comes to financing your home, a golden rule is to align your housing expenses with your financial capacity. Aim for monthly payments that don’t exceed 25% of your take-home pay, encompassing principal, interest, property taxes, insurance, and potential HOA fees.
As you ponder the timeless dilemma of whether to buy or build your dream home, the decision often hinges on your unique circumstances. First-time buyers may find the affordability and valuable homeownership experience of purchasing an existing house appealing. On the other hand, seasoned buyers, particularly those with a penchant for do-it-yourself projects, might relish the excitement of building a custom home. To navigate this crucial decision, engaging in a conversation with a seasoned real estate agent is pivotal.
In the vast selection of new construction versus resale homes, there’s no one-size-fits-all answer. The decision hinges on personal preferences, budget considerations, and lifestyle priorities. With the expertise of Ryan Coleman, with over two decades of experience in the East Tennessee Housing Market and thoughtful considerations of pros and cons, homebuyers in the East Tennessee Market can embark on their journey with confidence. Remember, the most important choice is to have a Hometown Expert who ensures every step of the home-buying process is navigated with clarity and ease.
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