Build vs. Buying

In 2009, after the housing bubble was fairly deflated to normal prices again, my wife and I decided to start looking for a house. We were living in a three bedroom house with three boys, ages 8, 5, and 3. The house is a typical cookie cutter home here in Phoenix, Arizona built buy one of the big homebuilders in a community that looks similar to communist housing. They are all build on top of each other; each house only has between 7500-10000 square feet to the entire lot. Our three boys could barely move around the backyard its so small. This is very typical of any new Phoenix area home.

So our quest to buy was not only to have a little more square feet under the roof, but at least half an acre of land. We quickly learned that this was a special commodity in this area. The homes that have this size land were built mostly between 1970-1980. Each time our realtor would take us to look at a home we were sorely disappointed. Most of these homes had never been updated on the inside, yet they still expected at least 140 dollars per square foot. Two homes that we viewed within the first twenty four hours on the market already had over ten bids. It felt to us that there really was no recession at all. Our price range was set no greater than 425,000 dollars. So to ask for 3,000 square feet on half an acre seemed reasonable to us.

In addition to a larger lot, we wanted each child to have his own room that was at least 12 x 12 feet. We looked at homes over 3500 square feet that still had 10 x 10 rooms for the kids, yet a master bedroom uin which we could do cartwheels because of the ridiculous size. Proper utilization of space was important to us. By the fiftieth home we viewed we were beginning to get discouraged. We finally bid on a house that had the square footage and lot size we wanted. Many other things were lacking but we had given up on our dream home and decided to settle. I truely believe that things happen for a reason. The bank did not like any of the appraisal values because the house was newly built but in a very old neighborhood. We finally gave up and took a break. I used part of our down payment we had saved to buy a new truck and my wife a 2 carat diamond ring. We painted our entire house and fixed up anything we wanted changed. We had come to the realization that we might as well plant roots in the matchbox we were in.

At a family affair, my uncle tells me that he had done some landscape work for a builder that went bankrupt and for us to look at those homes. The builder had bought four one acre lots in a prime area of Phoenix. He build three custom homes before he went bankrupt. This left one acre available which was definitely the most desirable location. The lot came on the market in August of 2010 priced at 110,000 dollars. This was definitely more than we wanted to spend on a lot. We also did not know how much it would cost us to build. After talking to two different contractors, we discovered that labor costs had become very low in this area due to the glutton of foreclosures. Both contractors quoted between 75-80 dollars per square foot. To build our 3,000 square foot home for 240,000 dollars was definitely an easy option as far as money. The possibility of building our dream home felt like an option once again.