Ask a Broker: Is it better to build from the ground up or buy an existing home?
On Real Estate
Question: When it comes to finding a new home in the Vail Valley, is it better to build from the ground up or buy an existing home?
Tom Jaffe: This is a good question and one I get a lot as a broker. When someone asks this, the first bit of information I want to know is: What neighborhood do you want to live in? That drives whether you should build a house or buy an existing one.
When you look at the Vail Valley, it’s really a series of micro markets. In some areas, it doesn’t make financial sense to build because it will cost more money to finish it than you will get in resale value. No matter where you build, you’re going to spend at least $400 per square foot, but if you’re in a market where houses are trading for $350 per square foot or less, you might want to consider buying a home. Eagle Ranch is one good example, although many homes in the area are now going for more. In neighborhoods where houses are going for significantly more than $400 per square foot, such as Vail central or Mountain Star, you can build and create more value.
Another factor to consider when building a house is the types of finishes it will have. If you’re building something in Vail, it’s expected to have more expensive finishes and more luxurious details to make it viable for a successful resale. But lux finishes can start to add up when starting something from the ground up.
I also ask my clients what they’re looking for out of a home. Is this a primary residence, or will it be a second home for multi-generational families? What sort of indoor/outdoor living spaces are desirable, and will you need to be set up to fully work from home. The list goes on.
There are many gorgeous and unique homes for sale in the Vail Valley, but it’s hard although possible to find new properties in certain areas, such as West Vail, Wildridge and Singletree. And new is important for many buyers. I also find that sometimes my clients have a very specific idea of the layout they want the house to have. If that’s the case, it’s often better to build so you get exactly what you’re looking for. Of course, buying a home and remodeling is always an option, especially if you can purchase it at market value.
But, when it comes to building a new home, it’s not always about the financial analysis. Oftentimes finding the right property is more of an emotional decision. Lifestyle plays such a huge part of why we live here, and in some cases, it makes sense to spend the money and create your dream home, even if you may put more money into it than you will ever get out of it. You really have to look at your priorities and the things you want out of your house to make the decision.
Since 1988, Tom Jaffe has owned, managed, developed or brokered close to a billion dollars worth of property, including developing four luxury duplexes in Vail. Currently, He serves on the board of The Cordillera Valley Club Metro District. He has spent winters in the Vail Valley since 1998, and moved here fulltime in 2009 with his wife, Amanda, and children, Tiki and Tate. He currently works out of The Slifer House in Avon.
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