Custom Construction or Buy Existing and Remodel?

Merri Ann Simonson – Contributed photo

Merri Ann Simonson shares this…

In the current market it is much more affordable to buy an existing home than it is to purchase new or custom construction. Why is that?

On San Juan, home prices peaked in 2007 and bottomed out in 2012. During that period, approximately 30% in median home price was lost.

More so with the median land prices, they peaked in 2006 and the median price decreased approximately 62% during the recession.

The costs of materials and labor did not change during the recession. As agents we were quoting estimates of $235 -$250 per foot for mid-level new home construction costs before the recession, and are quoting that now as well. This price per foot will afford some hardwood floors, custom cabinetry, granite, and a high-end appliance package, if you spend wisely.

Some homes on the island have been built for as high as $1,000 per square foot. Those sellers that decided to sell after building their dream home at those levels may lose money as the market rarely supports those extra fine improvements and unfortunately, all the receipts in the world do not make a home more valuable than the market is willing to pay. Of course, inventory of similar homes will have an impact on sale as well…

Continue reading on Merri Ann’s site… (PDF)

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