Should I Build A House In 2023? See Article Details

The 2023 spring housing market is picking up after a tough 2022. Senior economists have noted sales are trending up as home prices are stabilizing across the country. New listings are falling considerably which means building a custom home is in high demand. If you are thinking about building a custom home in 2023, it’s understandable that you have plenty of questions that need answers. Such uncertainties may include, what are the expected interest rates, what are potential delays, what elements are driving up costs, and many other factors that ultimately culminate in the question, “Should I build a house in 2023?”

With all that said, building a custom home is an opportunity like no other to make your dream home a reality. You and your family are in total control to choose the location, size, and features that can be as unique to your liking and lifestyle as you see fit. On the other hand, building a custom home is a sizable task to undergo. Therefore, it’s important to come prepared and try to eliminate as much stress as possible. Black Pearl Custom Homes have outlined here today in our informational guide the advantages, disadvantages, and factors to consider when building a house in 2023 to hopefully help you with your decision.

Advantages of building a house in 2023

There are many advantages of building a house in 2023.

Potential Cost Savings

Because the housing inventory is low, buying an existing home could be more expensive comparatively. Believe it or not, depending on how you go about building your custom home, factoring in the size, location, preferences, materials used, labour costs, etc., the project could end up being cost-efficient. Not only can buying a home be more expensive, but repairs and updates still may be required.

Building a new home however eliminates the need for instant repairs, mending, restoration, improvements, maintenance, or reconstruction altogether. There are potential cost savings as well due to the competition among contractors can be beneficial for those looking to build a home in 2023.

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Sense of Control

Building a custom home allows you to create your ideal floor plan. You are not limited to the commonalities in the seller’s market. The building process also provides a sense of control that buying a home does not. You are able to outsource as much as you want or as little as you want to subcontractors.

Building a new home also lets you choose your location. This is significant because building in a rural area costs dramatically less than buying an existing home in an urban area.

Mortgage Rates

Mortgage rates are projected to stay high for some time. This can be advantageous if you are choosing to build now, you have the time to build equity with the potential to gain a lower rate later and refinance.

This may also be a disadvantage, but more on that later.

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Ability to Customize

Building a home from the ground up grants you the ability to customize the design and features of the house to suit your personal preferences.

From the layout, flooring, fixtures, lighting, cabinets, windows, doors, and all other design aspects, you equally have a say in the selection of colours, materials, and finishes to go along with these features.

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No Competition

Another advantage of constructing a property is if you own the land, it is to your benefit to build where you have no other competition, and you eliminate the hassle of having to battle in a bidding war.

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Energy-efficient Materials

When building a new home, you can opt for the latest energy-efficient materials and systems of operation. This can lead to lower energy bills, saving you in the long term, but you can also see a short-term payoff because buying an existing home means you will probably need to replace old fixtures with energy-efficient ones.

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Brand New Home

The last and most glaring difference between custom home building and buying an existing home is the newness of it all constructing from scratch. You get to start fresh, and you are the first owner of the home. Everything is new and to your liking because you oversaw the process and can begin being a homeowner just as you always intended.

Potential disadvantages of building a house in 2023

Unlike the upsides of building a house in 2023, there are potential disadvantages to consider.

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Supply Chain Disruptions and Labour Shortages

Because there is an increased demand for materials and labour, you may expect higher costs as a result. The shortages and supply chain issues on materials can make for longer lead times or, depending on the material and its scarcity, it may even be unobtainable. Similar to material shortages, labour shortages also exist; and can often mean certain building tasks will prolong and see longer wait times to get done. Labour has been an ongoing challenge and construction has increasingly struggled to attract enough workers. This can also lead to potential delays.

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Land Acquisition and Mortgage Rates

If you aren’t in the fortunate position to have a land acquisition to build on, the available parcels are often more expensive per acre, lower in quality, and fewer in number to access. You can also expect mortgage rates to stay elevated for the near future. As previously discussed as an advantage, this can also be a con depending on your perspective. You are likely to afford less of a house if the rates are high.

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Risk of Overbuilding in Saturated Areas

There is the risk of overbuilding in areas where the housing market is already saturated. This can be costly because the land will be expensive and the limitation on space can restrict your customization options.

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How COVID-19 Impacted the Housing Market

Moreover, inflation has recently plagued the industry and the COVID-19 pandemic continues to have long-term effects on the housing market. Specifically, the impact on supply chains has caused material prices to swing wildly. For example, a huge concern at the beginning of 2023 was the price of plywood and lumber. Since then, the costs have eased, and contractors are now troubled by diesel and cement prices. This volatility demonstrates the rapid changes and unpredictability of the market. Contractors find it difficult to plan projects because of the unstable nature of the industry and the lack of uniformity across construction materials. Even experts from the Simonson team can only predict spikes and shortages will vary between products but cannot identify at which points in time which materials will spike or fall short.

Factors to consider when deciding whether to build a house in 2023

There are 4 main factors to consider when deciding whether to build a house in 2023: budget, location, timeline, and personal preferences.

Budget

Building a custom home can be a costly construction project to undertake. Before committing, plan out your budget and determine whether the costs of materials and labour, along with factoring in unexpected costs, will be feasible to complete within your financial parameters.

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Location

Building a custom home requires acquiring land. If you don’t already have ground to work on, you need to prepare for that buying process. The acquisition of raw land differs from buying a house in many aspects. In most cases, there is a higher down payment because in the event of a default, there isn’t much collateral for a lender to call on. Furthermore, they’re potential risks including easements, soil and percolation testing, timber/mineral/water rights, and more. If the area where you want to build is experiencing a housing shortage or an oversupply, this also affects the costs of building your own home.

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Timeline

In addition, consider how much time you have to build a new house. Do you need to move in quickly? Or can you wait for construction to be completed? Labour shortages may prolong your home building process along with the availability of materials.

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Personal Preferences

Building a custom home allows you to plan, design, and cater to your personal preferences and can accommodate your tastes and lifestyle choices accordingly. When deciding on if building a new house is the right decision for you, it is worth noting whether the specific vision for your dream home can only be achieved through building from scratch, or can you manage with a pre-existing home? Depending on the difference in costs, the extra time needed, the ability to customize, the labour involved, as well as a host of other factors, you must decide whether the pros outweigh the cons.

Conclusion

If you are interested in building a house in 2023, Black Pearl Custom Homes hope this guide helped shine some light on the situation by detailing the advantages, disadvantages, and various factors to consider. Begin asking yourself questions like, is building a new home on your own land more of a benefit than potentially facing longer wait times because of labour shortages? Is coping with material scarcity worth it if it means you get a full lineup of customization options? Is the dramatic rise in the cost of goods and services too big to overcome? These are just some examples of inquiries you may have that are helpful to spark debate between pinning the positives against the negatives. The back-and-forth discussions are necessary to encourage thoughtful discourse before making such a life-changing commitment.

Final Thoughts

Overall, the decision to build a custom house is a big one no doubt, but so is buying an existing home as well. If you do decide to build in the current market, Black Pearl Custom Homes are the custom home builders for you. If not, the team here can fulfill all your home renovation needs. If you would like to learn more about building a custom home in 2023, contact us today.