Custom Construction or Buy Existing and Remodel?

Posted May 26, 2016 at 5:46 am by

Merri Ann Simonson - Contributed photo

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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Categories: Business

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