I have heard that building costs are down, but I don't know that I saved that much in that regard, to be honest. What I do think I got was an incredibly amazing builder who might not have otherwise have been free to build my house. Also, the craftsmen and electricians, etc.. who I have working on my house are supposed to be the best in the area (according to my builder and others). They usually are in high demand, but in this economy they have been free to work on my house. I think the end product for me is a great piece of quality workmanship---something that perhaps I wouldn't be so quick to proclaim if I hadn't built during these "economic times".

Good luck in your endeavors and with your decision.

There's good and bad news.

Prime contractors and subs are looking for work. Some prices have come down. Some have gone back up. Locally, shingles just went up $5 a square. According to one builder, it was due to the closing of some shingle plants and the necessity of suppliers re-juggling which lines they carry to make up for the lost sources.

Another builder has confirmed the increased costs.

There is also an increased risk of bankruptcy filings by suppliers and contractors who go under because of the economy, possibly taking your deposit money with them, or just plain not paying their bills, resulting in liens on your house

It's a bit of a crap shoot right now.

I'm seeing hungry subs but really no break on materials. In fact, several vendors are raising prices and I'm fighting tooth and nail to keep them to their prior quotes....across the board.

We are currently in a global deflationary cycle. Labor and material prices have further to drop. Markets do not go straight down or up; they are fitful expressions of demand and supply curves but the future direction is likely down. I see so many folks buying homes and land these days and are paying way too much. If the Case-Shiller home price index is published for your area, track it monthly. The index is based on sale pairs hence is real world tracking and not a study of the direction of median prices. IMHO, we have a long ways to go. Recessions are all about absorbing excesses. The rest of the world cannot help much. Europe is more overleveraged than the US and has some fundamental structural problems which will take time to remedy. I don't see how we can recover until late 2010, at the earliest.

IMO: Great time to build/buy. Bad time to get a loan. Underwriting is running 30 days or more and that on picture perfect loans. Don't see that getting any better anytime soon. If you start the loan process now (assuming 4-6 months to build)you might move in this time next year.

smichelle
Your problem is not true in KY. We sold our house and the buyers closed on their 4.75 loan in 30 days from the date we signed the contract. I've had no porblem obtaining a 5% construction loan. You must reside in on of the 35 zip codes that contain 95% of our country's foreclosures.

agree with cards89.
I have a committment letter in my inbox for a loan that would have been >80% of cost. I had them redo it since I don't need that much. They said it should take 3 days to close once I need the money - using cash for the 1st parts.

We were living in Louisville, sold our home in less then 45 days, moved into a rental to wait for our house to be completed. Builder started our custom home last September and just called us yesterday to say he is having to file bankruptcy. We are building in Sellersburg a small town about 15 minutes North of metro Louisville. Our builder had an excellant reputation. He has had trouble getting subs because so many crews have had to lay people off and the ones still working are doing all the work! The concrete guys who poured our foundation and basement walls couldn't pour sidewalks, garage and drive way for almost 2 months out. The electricians who started our house have gotten laid off three different times in the six months we've been building. We are now not sure what is going to happen to our house. The banks wants him to finish it before his assets are frozen. He holds our construction loan. We are invested 16,000.00 (5000.00) down payment and 11,000.00 in change orders. Plus the emotional connection. We love our house and neighborhood. So right now I'd be afraid to start any new construction where someone else held the loan. Good luck with your decision. Cathi