Page 17 - River City News July 2021
P. 17

   Affordable Restoration American Air
Andy’s Heating & Cooling CdA Paving/CdA Redi Mix Champion Concrete Pumping
Foddrill Construction Corp. Hallmark Homes Hayden Homes
Interstate Concrete & Asphalt LaRiviere Mainstream Electric Mountain Power Construction Poe Asphalt & Paving
Steel Structures America USA Insulation of Spokane & CdA Young Construction Group
   Should I Build a Home Despite Rising Costs?
For frustrated homebuyers struggling with a lack of options of homes for sale, building a house might seem like the best option. This was the case for Brian Walsh and his family who wanted to be in a specific school district in Grand Rapids, Michigan. Walsh says the options were so limited it just made sense to build.
Although he says the decision was ultimately the best one for their family, there were some drawbacks such as having to pay for essentially two households at the same time. This is where his background in financial planning came into play. Walsh was adamant that they would not go over budget, despite the temptation to throw in a $100 upgrade here and there, which can add up quickly.
“When you’re doing new construction you can’t just do all the things on your wishlist,” Walsh says. “We had a specific budget in mind and I wasn’t willing to go over the budget, so we’re going to do some of the things ourselves."
As for whether people should wait to build until the cost of materials drops, most experts say this is a personal decision based on a number of factors, including your budget and how long you plan on staying in the house.
The upside of the current market is extremely low-interest rates, which can help offset the cost of building. But it can be foolish to try to time the market in hopes of catching both low rates and low building costs.
The hazard of waiting on the sidelines for prices to drop is that you wait too long and end up paying higher interest rates and higher building costs. Nobody can accurately predict what might happen a year or two from now.
There could be a surge of new homes entering the market as the forbearance program comes to an end and buyers are forced to sell, or the surge may never come in the near future.
Instead, prudent buyers should consider their budget and whether they plan on staying in the home long enough to build up equity to turn a profit at resale. Depending on the cost of the house, this can take anywhere from five to seven years, on average.
Finally, work with an experienced real estate agent and lender who can guide you through the process. Building a new house requires extra cash reserves and careful planning. For example: will you buy in an existing development that has utilities in place? Or will you buy land outside of an established neighborhood (which can create a whole other set of decisions and potential problems)? Issues like these are best handled with a seasoned real estate expert by your side.
Forbes: https://www.forbes.com
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