Any opinions on building a home on the Eastside?
I'm considering a relocation to the Eastside (Bellevue or Kirkland) around Fall 2008. Just curious if anyone had opinions on the cost of buying land and having a house built...
- Any ideas on typical cost to build? Price per sq.ft.?
- Is the cost comparable to purchasing a home already built?
- In a declining market, should I expect to end up with a house that is worth much more than I paid?
Thanks.
- Any ideas on typical cost to build? Price per sq.ft.?
- Is the cost comparable to purchasing a home already built?
- In a declining market, should I expect to end up with a house that is worth much more than I paid?
Thanks.
Comments
The Puget Sound is only now beginning to see a decline (we are about 2 years behind everyone else), but once the foreclosures and REOs pick up, then building just won't be able to compete with existing homes.
Other parts of the east side you'd probably be hard pressed to make the numbers work at $150/sq ft.
I'm looking at a lot in Seattle and figure I probably couldn't spend more than $175/sqft to make it work for the neighborhood. That's not much of a budget for custom construction.
I doubt that you can get a build lot for less than 200k even if you sub-divide a larger lot. Which part of Eastside are you considering? For me, I gave up on this idea as the final cost doesn't pencil out, not counting the cost of your own time and labor.
Land prices will not be immune to price declines. You will have to decide for yourself if you think prices will continue to fall.
Probably my favorite neighborhoods are East of Market Street in Kirkland, but also looking in Rose Hill, etc. on the east side of Highway 405.
Without subdividing a lot, it looks like land alone will be $400,000 to $500,000. So, unless the construction costs are under $500,000, it's probably better to just buy an existing home.
If you have the building bug, then it might be less risky and certainly cheaper for you to buy a house that's a total pit and then fix it up. Given the current market, this house is likely to be sitting on the market longer right now anyway... Note: It must not be renovated in any way. Perhaps a house that's had the same owners for 40 years and they've done nothing except general maintenance and cleaning. It must be undesirable to almost all other buyers, perhaps due to obsolete floor-plan (that can be modified) or an awful yard. It must not be too cheap (<350K perhaps) otherwise you'll be competing with sweat equity families on the edge of affordability.
Before you buy, get estimates from contractors regarding fixing it up and how much it will cost. Compare purchase+upgrades to the cost of a house that's had all the work done.
Things to consider:
-It's much easier to finance someone else's upgrades than your own, as you'll likely need cash in the bank to do your own. Your bank account will be important here.
-Flippers are in trouble now. If you can afford a $600K house on the Eastside, I think you'll get more for your money than buying a $400K house and putting $200K (of cash!) into it.
-If you decide to do this, don't get too crazy. Buy a house where the shell is pretty much the final shape. Adding extra floors and doing crazy things is just inviting risk (and therefore extra spending) into the project. If you limit your renovation to non-structural (except perhaps more windows) then you'll likely be able to stay in the house while the work is being done and have less cost overruns.
I know someone that bought a structurally unsound house in the Hollywood hills. He added a floor (underneath existing house down the hill). With permits and massive delays, and other unforeseen issues, it cost an extra $200K than expected. It also took two years, and he couldn't live in it while it was in progress. He bit off more than he could chew...
If this was 2-3 years ago, I would say to build your own. 600-700k for a nice house and another 500k or so for the land.
I think you can still get these if you are putting substantial (e.g. 20%) money in the deal - but no more freebies. I would love to have RhondaP chime in this one as it is a matter of personal interest.
Try and find a reliable construction lender right now, I am sure it's equally difficult. Problem with construction loans is they don't disperse all the funds at closing, they do it in phases and I recall IndyMac wanted to do it in like a million phases to ensure the builders are not going over budget and can't complete homes. So if a lender freezes their pipe, which may very well include construction loans because its fund have not been disbursed.
I am not in the business anymore, so of course I may be outdated in the latest guideline changes. But I don't see how things would be easier if not more difficult than what IndyMac was doing.
Best of luck!!!
The build was incredibly stressful, my DH was practically the superintendent because our contractor was cutting back on supervising to save money (he has about 7 unsold homes). We built our house for about $150 a square foot - maybe less I haven't done the math as we have partially finished rooms in the basement. This means it is not as high quality as many custom homes but it is equal to or better in quality to a home built by a spec builder on the Eastside. Except we chose all the windows, doors, finishes etc. so design wise it is much more attractive. We also used an architect who did a fabulous job and the design could not be better for our lot. However, we bought our lot in 2001 so it was half the price of current lots.
If you do a search on Coldwellbankerbain under neighborhoods/Kirkland/East of Market you will see tons of homes for sale. The majority incredibly overpriced IMHO. I think in the current market you would be much better off saving money for a hefty downpayment and waiting a couple of years. Cash will be King and you should be able to find a great home cheaper than you could build.
Personally I do not think the prices of many building products will come down dramatically, other than timber because the dollar keeps diving lower.
We had been in the process for some time by the time we chose him - we had met with I think 4-5 other architects and so we had a very clear idea about what we wanted. The architect interpreted our desires very sucessfully for our lot and budget.
To make the most of our lot an investment in a good architect was a sound move.