If you are comparing similar homes inside a defined geographic area, new always costs more than existing homes. The best deals are in a community with lots of new construction when someone needs to sell a 2-5 year old house. You will get a lot more for your money by buying the slightly used house.

As chispa said, buying new is always going to be more expensive than buying "used", and I think there's even a bit more of a financial loss when you're building something truly custom versus a semicustom or tract build (unless it's very well done), as they're built to very specific tastes and needs. I see a lot of 10-15 year old custom homes sit on the market a bit longer than average in my area because of their quirks that tend to fit a smaller niche of buyers than other homes.

With that being said, does anyone build custom in hopes that they'll beat the market in their area? It seems anyone I know who did a custom build did it with the intent of it being their forever home (even if that doesn't always end up being the case). Between the financial and time premium, it's probably not the route to go if you're wanting to sell anytime soon.

Brand new always costs more than used. Just like cars, refrigerators, wedding dresses, etc., etc.

I wrote a really long post on this years ago here. Wish I could find it...

Basically I've been right where you are. Building new is one of the top 5 life stressors I've been through.

I remember pulling into my job site. Yard all torn up, plastic flapping in the dumpster, cardboard and nails or screws freaking everywhere, along with copious amounts of mud. And I thought I'd lost my tiny mind.

Got worse when the house 2 up from me hit the market. It both cost less and looked nicer than my house...with the added bonus that it was freaking done! I remember the feeling in my gut, that I'd made some huge mistake. That house was so pretty. Flowers blooming, all staged for sale. No mud or dumpsters in sight. Then I looked at my half done mud pit and almost cried.

That was 8 years ago now. Maybe it's like childbirth...but I barely remember those stressful days. I love my house now. You know, now that it's done. And all my stuff is still (sort of) new, whereas I can start to see some wear around the edges of the house that almost made me cry when it hit the market.

Building new is absolutely a luxury. It will almost certainly cost more than a similar existing home. It may drive you crazy too. And that's before you factor in all the Covid related chaos now!

Only you can answer this for yourself.

New is more than used.

For some it is the reward. In our country with limited resources and rationed land approvals, it is not always economical to build.

and custom is more than using a builder on their lot...

and it's more now because of COVID, supply shortages, labor delays, competing with people upgrading existing homes because they are spending so much time there, etc

expense on top of expense on top of expense. You REALLY have to be committed to doing this right now.

New is likely to be more expensive, especially if a custom house (not part of a development). Our case in point - 15 years ago, we decided to buy our "forever" home in northern NY. Found nothing we really liked within our price point or the few we did find were too expensive or got sold out from under us. We did that for 10 years. We finally found a piece of property we loved and decided to build a custom house, which took about a year. We love our new house, but it cost twice as much as the most expensive house we had earlier rejected! And I doubt we could sell it for what it cost.

We're in the same boat, breaking ground in a couple weeks. We made our decision based on several factors- we owned the land already, our family is entrenched in the community/school- i.e., want to stay in the area, we've outgrown our current house (1 bathroom, 5 kids), and we don't forsee moving after this. We designed the house that worked for us and how we live. Lots of nights wondering if it was the right decision to go forward in this environment, but if I could foresee future events, I wouldn't be worried about money anyways. Who knows what tomorrow will bring...make the best decision for yourself- the person in the mirror lives with that, not people you ask for advice! Good

Yeah, if the world implodes, finances or having the most expensive house in the neighborhood, moves to the bottom of the list. Did you read about the couple in CA who bought a house for cash about a year ago and the seller has still not moved out ... covid rules allow him to be a a squatter and the new owners are screwed. We also saw during the last financial crisis that foreclosures can be dragged out for years and years and that it doesn't pay to be a responsible adult ... the irresponsible got bailed out!

If you can afford the house and it better meets the needs of your family, it probably makes sense to build new!

If you can find a house you love that meets your needs..go for it. Building new, especially custom is higher. I’ve given both of my daughters this advice...The problem is in our area, right now there are so few houses.

someone above mentioned not being able to sell it for what it cost to build. Hit the nail on the head...at least that’s true here.

I’m so grateful we built custom and love our home. If we sold it now, in our Vancouver market, we would make it all back and more, but then where would we go? We built the home we hope to live in long term and for that reason it is exactly what we want and need. We probably could have found a similar house but I don’t know that we could have found one on a great lot like we have. Our area is very established and there are no new developments and no HOA etc. So people are buying older homes, tearing them down, building new, as we did.

This is great feedback! Thank you so much for sharing your experiences!

I would agree w/ 3,000SF. In this area I see a lot of 2800-3500 more or less. Ours is at 2,600 and we would have been fine at 2,500 even. I'd also say there's a bit of a break in cost per SF with the larger square footage - but of course overall cost is higher. Thx again

That's a good point @homechef59, but the minimum sf that works varies by market. When I started (mid 80s w my father) we built 2800-3200 in the "higher end" development and 22-2600 in a more moderately priced project. Production builder projects started much smaller. Mid 90s I built 2900-3600, mid 2000s 3600-5200, now 3600-5500+. The land is getting more complex with extensive grading or its a tear down. Permits are expensive $50-100K and time consuming (6-9 months) so that often reduces the market to those willing and funded with more money in California. It's unfortunate.

People like all new and are willing to pay for it, that's how spec builders make a profit. High end, high quality houses sell fast. Also high end updated houses sell for a profit for flippers.

New is usually more expensive.

The less picky you are, the better the new tract or existing home will seem to you. And savings to boot!

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Permits are expensive $50-100K and time consuming (6-9 months)

We should be so lucky here in a certain municipality near Toronto!

For a single infill home, the process of minor variances, tree protection zones and grading plans regularly take two-three years. Our surveyor and hydraulic engineer are working on our seventh plan since October 2019. This one fails and we sell the lot to an investor with a longer time frame--and life expectancy!

The question of home cost is a bit more complicated than the question of initial outlay. Homes cost money the entire time you live in them and when you sell them. Many homes cost money in unpredictable ways.

First, the obvious stuff... Custom built homes tend to cost more money initially but also have reduced maintenance for a period of time that can result in significant savings. You probably have half, or less, of the annual maintenance for a significant amount of time.

Next, there are transaction costs to consider. If you will stay put in a custom home twice as long as you would in an existing home then the custom home starts becoming a much better value. Transaction costs of selling, moving, refurnishing, etc. eat up about 10% of the home's value each time you move.

Then there is just livability. Find a home that you like living in and you will save a fortune on "getting out of the house." I have been in my house for a year now and I miss seeing my students face to face, but I could not care less about nights out on the town or movie theaters, etc. I like being in my house, I don't need to spend money on a weekly prison break. I save quite a bit of money because of that...

Good luck