Is a Custom Home Right For You?

by George Monzures

We can all agree that it's a buyer's market. But do the benefits of a buyer's market carry over to custom home buyers as well? The answer is yes. If you've ever dreamed of owning a custom home but thought the out-of-reach price tags would keep it only a dream-think again.

The current market conditions have forced down costs in key ways that have played out well for those looking to own or build a custom home. Lower land prices are providing buyers with tremendous opportunities in great locations, and a decrease in building activity has increased the supply of materials such as lumber, concrete and granite. These conditions have left plenty of room for negotiations that didn't exist in previous years. In addition, many builders, architects, designers and subcontractors aren't juggling an abundance of projects as in years past, which translates to lower labor costs as well.

Today is surely a buyer's market, but we also know that real estate prices will eventually rebound. Buyers who begin the lengthy process of building a custom home now will be able to take advantage of the current market pricing and enjoy a shorter time until move-in than those who begin once the market is again on the upswing.

The process of finding and purchasing your lot and selecting whom you will work with to design and build your home will take time-perhaps six months for planning and permitting before breaking ground. Add nine to 18 months to construct a home, and one can expect to spend 18 months to two years in the development process after purchasing your land.

After working on the creation of your new home for almost two years before unpacking boxes and hanging family photos, you'll then want to settle in for a minimum of two more years to reap the full tax benefits of home ownership prior to a contemplated sale. And since real estate prices will likely begin climbing upward again within the next four years, today is a perfect time to begin.

Investing In the Process

Although current buyers have great pricing available and time on their side, custom home clients should be aware that their personal investment of time and money will remain substantial. To maximize their understanding of the building process, buyers should consult with a number of service-oriented builders to have their planning questions addressed up front. Collecting thorough bids based on well thought out plans is the best way to take advantage of today's buyer's market.

Before making the leap, determine whether you have the necessary funds available to build a custom home or can qualify for a loan in the current climate. Next, and equally important, is to determine whether you have the time. Building a home is a labor of love, and even when working with a knowledgeable team, you should expect to spend a considerable amount of time in meetings, providing input on design details and confirming selections. After all, you want the home to reflect your personal needs, wants and dreams.

Select a builder you feel comfortable working with and one with a strong background in design. Working with a builder up front may provide efficient cost/benefit solutions to technical design issues. A qualified design/build company that specializes in turnkey project management can work with you through the entire process, making recommendations that can save you significant time and money.

A great way to save time and money is to purchase a custom "spec home" rather than buying land and building. A number of custom builders began building homes they planned to sell while the market was strong but now are left waiting for a buyer. You may find beautiful, spacious new homes with great locations and upscale finishes priced considerably lower than just a year ago. While a custom spec home may not be perfectly tailored to all of your needs, it eliminates the investment of time in the building process.

With prices and interest rates at their lowest in years, the opportunities and options available to potential home buyers are abundant. Now is the time you can afford to be choosy. Your options likely include houses you previously considered out of your league, and your custom dream home may now be within reach.

George Monzures is the owner of Monzures Development, a full service commercial and residential general contractor and designer based in Scottsdale and specializing in high-end custom homes and home renovations as well as commercial projects.

www.monzures.com