When it comes to real estate, we’re currently living in a seller’s market. Mortgage rates are low and there is a greater demand than supply for available homes across the country. While several factors have played into this market, the pandemic effect can’t be ignored. After being “stuck” at home for so long, people in rentals and apartments want to experience homeownership. Others are looking to move away from congested cities.
It’s also a trend that experts don’t believe will end any time soon. This seller’s market will likely continue past 2021. As a result, a survey conducted by Barron found that nearly 56% of people think it’s a bad time to build or buy a home. But, those same people still want to.
You shouldn’t give up on your dream to design and build a house just because it’s a seller’s market. In fact, if you build a home now, you could be saving money as inflation rates continue to go up, and supply costs become greater.
With a little planning and a few special considerations, you can build the house you want. Let’s take a look at some of those considerations, so you can feel confident about moving forward with construction.
Designing and building a home takes a lot of planning no matter what type of market you’re dealing with. When you’re planning during a seller’s market, it can take more time and attention to detail.
The most important thing to consider is cost. That starts with looking at your personal finances and getting them ready for the project. You should start thinking like a lender in terms of what they’ll be looking for if you need to take out a loan. They typically consider things like:
- Credit score
- Employment history
- Tax returns
Getting a loan for building a home is similar to getting a mortgage loan, so make sure to pay down debts, build up your credit score, and show potential lenders that you have the budget to build the home you want. If you don’t have your finances in order yet, it’s a good time to start saving.
Take a look at your budget and where you might be able to cut back. Are there subscription services you don’t use? Do you have to go out to eat multiple times a week? Making small changes in your spending habits can end up making a big difference in how much you’re able to save.
Finding the Right People to Work With
Once you have a better understanding of your finances, the next step in building a house is to find an architect and contractor you can trust. Working with an architect can add up to $5,000 to the cost of your build, but if you don’t have any previous home design experience, it’s often worth it.
Talking to a contractor early on will give you a better idea of what the entire home project will cost. They’ll be able to cover things that you may not have thought of otherwise, including:
- Pouring a foundation
- Fixtures and finishes
It’s crucial to find people you can trust when you’re building, especially if it’s your first time tackling a project like this. When hiring a contractor, check their credentials, get different bids, and try to focus on more than just the cost. Sometimes, the best contractors don’t necessarily cost the most. Doing your research ahead of time on anyone who works on your house is one of the most important steps to take to protect yourself and your investment.
Considering a Redesign
Because of the state of the market, you might decide it’s not time to build a house from the ground up. Instead, buying a “fixer-upper” and redesigning it could save you time and money, especially if you want to move quickly.
There are plenty of cheap ways to redesign a house. But, after taking a look at your budget, starting with the more expensive items is usually the way to go. You’ll get them done faster, and it will be easier to keep track of your budget for smaller, more inexpensive projects in the future. Tackle things like:
- Installing a new roof
- Building a deck
- Refacing cabinets
- New wiring
- New plumbing
Once you’ve taken on some bigger redesign necessities, you can focus on the cheaper upgrades that will bring even an old, worn-out home back to life. Some of the cheapest ways to redesign a house include painting the door, installing a stair runner, and purchasing home accents like rugs and pillows to bring personality into any room. You don’t have to redesign and remodel all at once, which is one of the nice things about buying a home over building one.
But, if you truly have a dream of building your own home to your exact needs and wants, it’s okay to go for it. Yes, it may cost more thanks to the current market. But, trends indicate things will continue to cost more for the rest of the year, if not longer. By taking the plunge and building now, you may actually end up saving money. Plus, you could be in a selling position the next time a seller’s market comes around. Keep thinking forward, and don’t let this market hold you back.
Sam Bowman authored this blog post