I am very interested in hearing some opinions.

I live in a very rural area of Northern Utah. Most of our economy is based on
ranching and the oil and gas industry. My business is down, I would estimate 80%.
There is the possibility of my business continuing in a downward trend.

Fortunately, I have a teaching position as well. I have kept this position over the
years because one, I like it, and two, in case of times like these. I had considered
selling my existing home for the fact that my kids are now college age, and have moved on.
It is just me and my wife. I had thought about selling my house in 1-2 years. possibly
listing this fall (it can take a long time to sell a house here).

To get to the point, I had someone come by and ask if I would be interested in selling. I said
yes, they came by and looked at it, and I received a very good offer and I accepted.

I am now looking at relocating 45 minutes away from where I work. Although the area is less rural,
its economy is more tourism based. I need a place to live in the near future (I have a rental house
that I can live in for awhile) and therefore am looking at building or buying an existing home.

Do you think now is a good time to build? I am thinking that materials may go down in the future but
perhaps labor will be down now, given the Covid-19 issues. Do you think it would be best to wait to
build? I could always rent for a year but really hate the thought of doing this.

What are your thoughts?

Mortgage rates aren't going to get much lower than this and there are fewer and fewer buyers by the day as the economy tanks.

Good to be a buyer in this market...

I think you are right Opus. I am not concerned about the mortgage rate as I should be able to cover the cost of my new home with the selling price of my existing home.

I am curious though, how much material cost will rise or decline. I guess at this point it is all just a big crap shoot....

With stick construction, most of our building lumber comes from Canada. With this COVID-19 thing most likely being a season thing, cross border suppliers may face disruptions and building material costs may rise considerably - especially if the D.R Horton, Lennar and Pulte Group decide to slow down their pace.

The other consideration is - with the economy cratering, more existing homes will come on the market as mortgage defaults skyrocket (already starting). As we saw after the everyone get's a mortgage crisis, it was far cheaper to buy existing homes than to build. Plus you could get far more house or higher end construction quality than you could build. Already home values are dropping 10% or more.

Cash is king for the next year to 18 months. So you will have tons of bargaining power as a cash buyer. But personally, I would consider a mortgage if you're an investor. Use the bank's money for the home at low interest rates and invest your nest egg into a rapidly growing economy and equities market. Your winnings will offset your interest expense many times over. This is where a good investment manager earns his pay.

Just a thought.

If you have the cash now is the time. Many contractors are taking half of what they were charging. There is a growing trend to build out metal homes. Companies can build a shell home with concrete on your property for $20k with 1,500 sq ft. You sub out the finishing work.

True, if you have the cash then now is a good time to build. I've been in the construction business for over 40 years + right now you can get some good rates from all the trades. I agree with Opus also that you consider letting the banks do the financing + invest your own (for the time being at least). Read the fine print but you can pay off early with no penalty if times look better in the future + that way all your money is not tied up in one venture.

Thanks for the advice guys. I appreciate it.

I own a building lot in the area I want to build. I met with a trusted builder/realtor who I have known for years.

I’ve decided to build. He will do it for cost plus 11-12% (profit for him) which I think is fair. I will be in an area that has nightly rentals (vacation homes) and if I want, I have the option to rent it out by the night. I may do this during the busy summer time months.

Although I see your point on the great rates, I do not want another mortgage. I have one on my rental and that us the max I’ll go.

Little to zero debt, us the way to go in my opinion.

Thanks again for helping me confirm my decision.

At the time I reluctantly moved from Smithfield, I was also thinking about some houses being built north of there in Cub River Canyon (Idaho or close to it).

Tom:

Cub River canyon is nice. Unfortunately, like most places, it has grown immensly.

I am actually going to be building in Garden City. I believe that I will
stay in my Logan house during the summer while I rent out the house I build.

Cache Valley will always be home but Garden City is not that far away and it is
closer to work.

Jason sounds like you negotiated a good deal.

Building is a nerve wracking process, but you end up with exactly what you want in a house.

Nothing wrong with Garden City either, didn't have as much shopping as Logan last time I was there. The few times I fished there I didn't get much, probably just didn't know how to tempt a Bear Lake trout. I had better luck down the canyon above the dams.

I was up the canyon and south up one of the dirt roads once getting firewood when the truck thermostat stuck shut, had to come back down a couple of miles at a time to let the engine cool (and fish for a little while).

Ah. Summertime snowbird rentals for a supplemental income? I remember that as a good deal in town, students during the school year, Arizona retirees during the summers.

I signed a contract to build a new home, just before the virus hit. Could I get a better price today, maybe, maybe not. I really don’t think that material costs will drop markedly and the contractor may or may not pass those saving to you. Also, it depends on the economy in your specific area. Since you have the money available, I’d get on with it.

Opus:

I always respect your advice!

Tom:

If you’re ever get up this way, give me a shout.

This site is great, you can always find great advice.

quote:

Originally posted by Jason P:
Opus:

I always respect your advice!

Tom:

If you’re ever get up this way, give me a shout.

This site is great, you can always find great advice.

September, likely...

Jason, I can relate to a mortgage situation. I recently changed over my homeowner's Ins. to a different Co. after the rates got too high from the 1st. I have never made a claim + I have a problem paying for everyone else's wildfires or hail damage when the Ins. agent is living better than me. When I spoke with the new woman + told her that there was no mortgage that I owned my home outright, her only comment was "Good for you; not many can say that."

Tom:

Hope to hear from you in September.

Norman:

It is good not to worry about debt. I wasn’t 100% convinced to by the rental when I did. However, it is turning out well as I have three college aged sons that can have “cheap” rent!

Thanks again all. This site has some great people.....

Yes, Jason, you are correct, there are some fine folks here. I've made many friends here over the years. As to debt-free....? 2 years ago I had one of my machines go down in the shop + the gears + shafts that would fit into a 7"X 8" box came to over 7K. I'm already semi-retired so if the machine goes down again, T.S. Elliot!

Here is what you don't do.
Build the house yourself, with a couple friends to lift walls when needed, including electrical and plumbing, while still working your regular job and your wife is pregnant.

Yes + no. The no part is because you have a wife, pregnant or not. They REALLY don't like living in a construction site. I built my 1st house myself with a few friends but we were all in the trades, my shop as well. For the last wing on m,y big house I subbed it out, it was faster + made more money doing my job + paying a contractor than I could have saved. Hey, I can rebuild a motor or wire a house or install central HVAC but in the long run pay (someone with the skills) to do it right + make money doing your own trade. Makes your wife happier too because it gets done faster.

quote:

Originally posted by theback40:

Here is what you don't do.
Build the house yourself, with a couple friends to lift walls when needed, including electrical and plumbing, while still working your regular job and your wife is pregnant.

That sorta sounds like a man speaking from experience... and maybe not a good experience at that.

Ohh yeah!
I'm a picky builder. Cut the logs for framing, trim and cabnets, and had them sawn out with a portable mill. I even built my own paneled interior/exterior doors.
My wife wanted to be in on things, but couldn't do much as she got bigger. nor do any finish work because of fumes etc.
I built another "cottage" I rent, on a property I got in a tax sale in my free time. That was very enjoyable, took me a year to finish, but I had fun with that one.

I may have mentioned it on other threads, but I built a cabin (I was the General) and
did a "butt and pass" build. I peeled the logs, stacked them. etc... I wanted it to
be easy and therefore, decided on a "simple" build of a 30x30 main floor with a 600 sq.
foot loft. I figured that with a year or so of hard work, I would be done.

Well, 4 years later, I finally was able to complete the build. Other the a "tilt" on the
one side of the roof (long story), everything turned out great. I actually ended up selling it
for a decent profit, a few years after it was completed.

What is my point you may ask? The point is that I have little desire to go through that again. I feel
better paying someone to manage the project; someone who has connections to reliable sub contractors.
I will do some of the "subbing" out myself (electrical, flooring, painting etc.) That should save me some $$.

On another note, it looks like I will be starting my project a bit early and I am hoping to get started within
the next week or two. My current house sale looks good and I feel comfortable moving forward.

It is an additional advantage of having friends in the trades. I built my shop only paying for materials + a horse trough full of ice-cold beer. The keyword there is having friends in the const. business. Not essential but it helps.

quote:

Originally posted by NormanConquest:
It is an additional advantage of having friends in the trades. I built my shop only paying for materials + a horse trough full of ice-cold beer. The keyword there is having friends in the const. business. Not essential but it helps.

A friend of mine in past years had a backhoe and a list of favors as long as your arm, from helping his buddies who did electrical, plumbing, and so forth.
What goes around, comes around, and he saved a ton of money getting the details done on a very nice house he built while living onsite in a trailer.

It was interesting reading what I posted a year back. Our Utah housing market is running crazy:

https://www.ksl.com/article/50...-20-since-march-2020

Running crazy here as well. I'm a builder in my area. I'm hiring crews as fast as I can find them as I'm getting new construction contracts at a blistering pace.

Lumber prices are off the hook with unrealistic and what seems to be unsustainable price increases weekly. Still, clients are signing contracts for us to build at a blistering pace.

Todd:

The Broker I work for just made an offer on a home (for his daughter). They offered $40k above the asking price. The listing came back and said they received 15 offers on the house. Their offer was rejected.

I just shake my head at how fast the market is moving.

I know. It's crazy. Almost everyone we have under contract have put their current house on the market, thinking it would take a couple of months to sell. Every one of them have sold the very first day for over the asking price ... most being cash offers.

My wife and I have thought about selling our place, buying more land, and building a smaller home in order to not have a mortgage and pocket some additional cash. Trouble is, land prices are also through the roof. We'd have to move 30 or more miles out to get a reasonable land deal.

A client of mine that just went under contract with us, purchased his land a month ago in an old fashioned land grab. The sellers had 69 five acre lots. They invited 150 people to the event. Had a band and barbeque. Gave them all walkie talkies. Fired a shotgun and everyone drove to the lot they wanted. First call got the lot.

They sold all 69 lots in less than an hour at $30,000 per acre. This was an hour and a half west of Fort Worth, out in the boonies, twenty minutes to the nearest small town.

Most of the folks buying our client's homes on day one are folks moving to Texas from places like Seattle, San Fran, LA, NYC, and other places where they've been "locked down" with liberal politicians due to Covid and are looking to move to a more "free" area. We're building for several of those folks as well.

quote:

They sold all 69 lots in less than an hour at $30,000 per acre. This was an hour and a half west of Fort Worth, out in the boonies, twenty minutes to the nearest small town.

Most of the folks buying our client's homes on day one are folks moving to Texas from places like Seattle, San Fran, LA, NYC, and other places where they've been "locked down" with liberal politicians due to Covid and are looking to move to a more "free" area. We're building for several of those folks as well.

That's sick, Todd. Problem is those people will bring their liberalwokestani ideals with them. Good luck.

Thats the truth Ann. We are seeing it 1st hand here in central Tx. They are bringing their ways as well as their methods of driving. "Suicidal". And as I have said before, as well as not wanting them here, I am being forced to finance their kids education.

quote:

Originally posted by NormanConquest:
Thats the truth Ann. We are seeing it 1st hand here in central Tx. They are bringing their ways as well as their methods of driving. "Suicidal". And as I have said before, as well as not wanting them here, I am being forced to finance their kids education.

That scenario is why I have packed up and made major moves during my lifetime. Hopefully I won't have to do that again but I will if I have to.

Building materials such as plywood and dimensional lumber have tripled or quintupled in our area. But interest rates are low. You might consider a metal framed concrete slab home. I've seen some beautiful ones in Louisiana. Down here you can get a 1,800 sq ft shell with roof, siding, and windows/doors built for $15k. That includes the concrete slab.

quote:

Originally posted by Bobster:
Building materials such as plywood and dimensional lumber have tripled or quintupled in our area. But interest rates are low. You might consider a metal framed concrete slab home. I've seen some beautiful ones in Louisiana. Down here you can get a 1,800 sq ft shell with roof, siding, and windows/doors built for $15k. That includes the concrete slab.

Don't know about SC but here in TX, $15K will get you about 700 square feet of metal building with slab, one roll up door, one walk out door, and 2 windows. That's without any finish out. 1,700 square feet would run about $36,000. Our supplier is one of the more competitive outfits around as we build a lot of metal "bardominiums" as well as metal barns, garages, etc. The shell and slabs are running about $21 per square foot. Your quote of 1800 sq. ft. for $15K is just over $8 per sq. ft. Concrete here is going for $7.00 to $7.50 per foot by itself.

All that said, back to the OP of Building a house in this economy, even with the crazy lumber and materials prices, at least in this area, our clients are moving into their homes with significant equity. Prices for existing homes seem to be even crazier with demand for the ability to move in now being strong.

As an example, we are just about finished with a 2,700 square foot home on 12 acres. Our fee for this particular home was $370,000. The client paid $120,000 for the land 2 years ago. When he moves in, he'll have $490,000 plus his interim interest and loan fees. We are about 3 weeks from finishing this house and our client had an offer last week by a couple that saw it while driving by and stopped in to have a look. They offered my clients $625,000 cash for it once completed. My clients declined. Unfortunately, they weren't interested in us building for them as they already have their house sold and need a place to move into within the next month or so.

quote:

Originally posted by NormanConquest:
Thats the truth Ann. We are seeing it 1st hand here in central Tx. They are bringing their ways as well as their methods of driving. "Suicidal". And as I have said before, as well as not wanting them here, I am being forced to finance their kids education.

"F**king Californian!" is a common phrase you will hear hurled out the window at a speeding driver here in Idaho. It has changed the landscape a lot.

In reality; one who thinks he owns his property that has been paid for in good faith, need only to miss one tax payment + see who REALLY owns your land. Excuse me, I thought that was settled at Runnymeade in 1282 ( or thereabouts) + was called The Magna Carta. So soon most forget. We have early voting here + there are all these signs out at the voting stations endorsing (vote yes on prop blah, blah) basically a raise in their salary due to to the school bills. I am so sick of forced supporting of deadbeats + transplants. Every day when I go to the P.O. there is a new person getting mail box keys + the postal clerk ( addidmitably she has to say it) Welcome to Liberty Hill! My haven in the country has been discovered + I am not pleased.

your like the 20th. person I've heard talk about moving over to garden city in the last month.

Garden City? Explain please.

quote:

Originally posted by NormanConquest:
Garden City? Explain please.

It is a secret haven known only to local residents and the occasional wanderer...

Ha ha Tom.....

I’m getting calls and inquiries for land over here daily. Everyone is looking to buy and the prices keep going up. I see no end to this in the coming year.

We are not even in the peak season yet.

People are still building and buying, go figure.....

quote:

Originally posted by NormanConquest:
Garden City? Explain please.

Here ya go Norman:

https://www.visitutah.com/plac...nd-towns/garden-city