Buy it or build it? Here are the advantages and disadvantages
On Real Estate
Rising prices and limited inventory have buyers looking at their options, including whether to buy or build. It’s a tough decision to make, as both options have their advantages and disadvantages.
In working with buyers, many initially think building might present a cost savings. However, once they start looking for land to build on and realize the cost, coupled with construction costs and delays that are even more common than in years past, they more often decide to buy an existing home. If you are willing to wait and don’t have a sense of urgency or desire to have a condo or home now, or you want to have a future nest egg, buying land and building may be the way to go.
If you are considering building and getting a better understanding of costs, I always encourage buyers to meet with at least two, preferably three architects and builders first, as well as work with an experienced broker who can often vet these for quality, reputation, and price points. It’s also important to then add on the cost of the land, permit fees, tap fees, delays etc., all of which will come into play.
Take that number as a starting point. Then, check out current listings and see what’s available that fulfills your needs for less than that price. Even in a tight market, you are more likely to find an existing home, as long as you’re willing to do some compromising, and close before construction even begins.
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To help you with your buying decision, the following are the key advantages and disadvantages to building and buying, along with cost ranges for Eagle County/Vail Valley.
Advantages to building
Customization: Building a home allows for complete personalization to fit your specific needs, tastes, and lifestyle. Everything from the layout to the materials can be tailored to what you envision for your dream home.
Modern features and efficiency: New construction comes with the latest in-home design trends, technology, and energy efficiency, potentially saving you money on utilities and maintenance while also providing a more sustainable living environment.
Warranty: Most new homes come with a warranty, which can cover repairs for a certain period after the construction.
Less competition and bidding wars: Instead of competing in a sometimes-fierce housing market (which is still out there with buyer demand higher than inventory, particularly for new or updated homes), you can avoid bidding wars and the stress of outbidding other homebuyers, providing a more predictable and controlled path to homeownership.
Disadvantages to building
Timeframe: It can currently take a year or two to get a house built and move-in ready in mountain resort communities. There may also be unexpected delays from back orders or shipping challenges. Delays and the overall timeframe can also impact overall pricing along with rising construction costs.
Cost: Building a house from scratch can be more expensive in the short term than buying a pre-existing house. That being said, there can be longer-term gains with less maintenance and potential real estate value increases due to new construction.
Stress: Building a house from scratch can be stressful and overwhelming, as it involves a lot of decision-making and supervision.
What it costs to build: The good news is there is a wide price range in Eagle County, from $400-$1,200 per square foot. The range includes a lot of variables ranging from materials to interior finishes. Be sure you get referrals from friends or experienced brokers who can make recommendations and ask for at least three bids. The quality of the contractor equals the quality of your home and also how much time you will need to invest to monitor progress.
Available Lots
According to the Vail Board of Realtors, there are currently 114 lots for sale. There is more land downvalley than in the upper valley and price points also go up the closer you get to Vail. Here are some cost comparisons:
Gypsum | 0.66-acre lot | $160,000
Eagle | 0.52-acre lot | $395,000
Edwards | 0.83-acre lot | $625,000
Vail | 0.46-acre lot | $1,570,000
Advantages to buying
Convenience and speed: Buying an existing home is typically much quicker than building from scratch. Once you close, you can usually move in immediately — or in a matter of months depending on the closing terms — making it a convenient option for those on a tight timeline.
Established neighborhoods: Existing homes are often located in established communities with mature landscapes, known neighborhood dynamics, and existing amenities, such as schools, parks, and infrastructure.
Cost certainty: When buying an existing home, the purchase price is clear from the start, and there’s less risk of unexpected costs that can occur during the building process. This can potentially make budgeting and financing simpler and remove the guesswork and/or cost increases that can come with new construction.
Disadvantages to buying
Hidden costs: Pre-existing houses may require repairs or renovations that can be expensive and unexpected.
Customization: Pre-existing homes may not have the design or layout you desire and changing them can be costly and time-consuming.
Energy efficiency: Older homes may not be as energy efficient as newer homes, resulting in higher energy bills.
What it costs to buy: According to the Vail Board of Realtors, there are currently 150 single-family homes available in Eagle County, with price ranges from $572,500 in Gypsum to $39,990,000 in Vail. This does not include condos, townhomes or duplexes, which offer more inventory options and price points.
Buying a home is a very personal matter and only you know what is in your best interests based on your short- and long-term goals.
Carol Underwood is a 17-year mountain resort real estate veteran representing Eagle and Grand Counties and a broker associate with Berkshire Hathaway HomeServices Colorado Properties. She can be reached at 970-726-6777 or team@grandmountaingroup.com.
