Homeowners insurance blog

Build or Buy? What’s Best in These Top Cities

You probably have a good mental picture of your dream house, but do you know whether you should build it or buy it? It’s a tough decision: We took the top 18 metros in the country with at least 45 plots of land for sale and calculated the price of buying versus building an average home. You’re going to pay different amounts for an average (2,392 square foot) home in various U.S. cities, but we’ll show you which route can generally save you more. How did we do it? For cost to buy, we added the average value of homes in the metro, the price of utilities, and 4% of the home’s value for maintenance and repairs. For cost to build, we added the average land price, average cost to build, utilities price for new Energy Star homes and other new homes, and 1% of the home’s value for maintenance. We’ve included some sample homes to look at – click on the images for more information. See which strategy is better in your area:

Best to Build

Although all of our top 5 building metros happen to be on the West Coast, other areas of the country also can prove better for builders. Check our table below to find other cities where you can build your dream.

1.      San Diego, CA: save $85,485.07

san diego

Photo credit: Zillow.com

The real estate market is crazy everywhere in California, especially in San Diego. Before 2006, the city experienced a dramatic growth in real estate prices. As a result, the emphasis shifted toward building in San Diego, and the existing house market hasn’t caught up. That means you can spend less on making a house – such as this new modern beauty – your own.

2.      Oakland, CA: save $84,366.99


Photo credit: Zillow.com

Oakland lies in another crazy California market. In the last year, the city’s real estate market has appreciated faster than San Francisco’s. Land is still available on Oakland’s side of the bay, so building can make more sense financially. You can build one similar to this beauty with wood floors and a yard.

3.      Los Angeles, CA: save $77,398.49

Los Angeles

Photo credit: Zillow.com

This summer, home prices in Southern California reached a seven-year high, according to the LA Times. While housing prices now are on the downturn, the best option is still to build in the Los Angeles metro. Whether your style is multi-story or more like this pretty southwestern ranch style, if you can dream it, you can build it.

4.      Seattle, WA: save $57,088.53


Photo credit: Zillow.com

The “City of Flowers” also is the nation’s fastest-growing major city. While it’s better to build in the metro, land plots are going fast! Seattle had the fewest available land plots on our best builders list, with just 77 for sale.  We can see why. Who wouldn’t pass up the opportunity to customize a modern home like this one with wood floors and modern fixtures?

5.      San Bernardino, CA: save $51,657.15

San Bernadino

Photo credit: Zillow.com

The San Bernardino-Riverside metro basically invented the concept of building versus buying. These cities are “bedroom communities,” and grew in the suburban shadow of Los Angeles.

Best to Buy

As these markets regain their strength, there’s still enough inventory to find an existing house without the hassle of construction.

1.      Atlanta: save $143,238.63


Photo credit: Zillow.com

Atlanta has high building and land costs, so it’s no wonder you should buy in the city. ATL has the biggest inventory of available homes in 146 U.S. regions, according to realtor.com. With a large selection of existing houses, you’re bound to find something just right. Considering you can save nearly $150,000 on an existing home, the search seems worth it.  http://www.zillow.com/homedetails/1019-Leah-Ln-N-Atlanta-GA-30316/2105350263_zpid/

2.      Pittsburgh: save $110,337.01


Photo credit: Zillow.com

The real estate market here is at the top of the buying game. In fact, housing prices in Pittsburgh fall about 40% below the national average. When housing prices are affordable, it makes more sense to buy than build.

3.      Houston: save $101, 641.06


Photo credit: Zillow.com

For the past few months, the fourth most populous city in the U.S. has seen gains in its housing market. As prices rise, so do inventories of existing houses. That’s why it’s still cheaper to buy in Houston. A growing inventory helps buyers choose what they want. If you want a two-story brick house with big windows, you’re in luck with this Houston home.

4.      Fort Worth: save $91,489.72

Fort Worth

Photo credit: Zillow.com

Fort Worth’s motto is “where the West begins,” and traditionally the city has taken the build or bust attitude to heart. Now that Fort Worth has grown substantially, things have changed. Buying is cheaper in a city that has traditionally boasted low building costs.

5.      Chicago: save $88,578.32


Photo credit: Zillow.com

The Chicago metro is the nation’s third largest metropolitan area. A limited land availability and soaring price to build (the highest on our list) make buying in Chicago better than building. Though Chicago housing prices are high, you can find opportunities if you dig a little. One great find? This ivy-covered two story. table *Oakland is included in the San Francisco MSA. ** Forth Worth is included in the Dallas MSA.


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