Detroit Real Estate

Is it worth it to build a new home?  I recently had a client buy a lot in a very expensive neighborhood.  Buying a lot to build on in this market is not the smartest thing to do.  Why do I say that?

Right now you can buy a house fully built for less than what you can build a house for.  Almost every major builder has left Michigan.  Why?  Because it is not profitable.  Sure you can buy a house close to the same price, but what most home buyers are forgeting is that they have to pay for the extra things.  Things like window treatments, things like landscaping and decks.  All those items cost money.  Items that drive the price of the home over similar homes.

So now the homeowner has more invested in the home than the house is worth.  It is like buying a new car.  The new home has lost value before it is a year old.  So is having a brand new home that you designed for yourself worth over paying?  Is it worth being upside in your mortgage?  Those are the questions you have to ask yourself before you buy.  So is it worth building a brand new home than buying an existing home.... that is something you have to decide yourself.

This blog is written in March 2010 and reflects the current market conditions.  In 2003 there would have been reason not to build at that time.

Russ Ravary

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My quote of the day is:

Every day, tell at least one person something you like, admire, or appreciate about them.

Robert Carlson

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