Choosing to buy or build a home in Minneapolis is a huge decision. Property owners and home buyers want all the information possible to help them make the best choice. With considerable money and effort on the line, it’s crucial to research and weigh the pros and cons. To help with this decision, we included the benefits and drawbacks of building a new home versus buying a new home.
Single-Family Homes
Minneapolis area single-family homes are an extremely hot commodity. Whether you ultimately decide to build or buy, you need to understand that the real estate market is very competitive. The demand far exceeds the supply.
According to the St. Louis Federal Reserve, the average cost of a home in the U.S. has doubled since 1970. Additionally, the Minneapolis area’s population has increased substantially in the past few years, driving up the price of building or buying a home.
Building Process
Some of the first pros and cons to consider when buying or building a home involve the building process itself.
Pros of buying: In such a competitive market, it’s beneficial to secure a living situation immediately. If you are moving to the area for work and need a place to live as soon as possible, buying is often the safest choice.
Cons of buying: When buying in a crowded real estate market, the housing options are more limited. Because you are purchasing an already-built home, you are not involved in the building process. If the available homes are not exactly what you are looking for, you may need to make concessions on space, amenities, location, etc.
Pros of building: One of the main pros of building a home is the ability to pick and choose what you want. Building a house allows you to customize the perfect living situation for your family, from the overall layout down to the specific tiles. Adding personal touches to your home entices many people to build rather than buy.
Cons of building: The obvious cons of building your own home are the amount of time and effort required. Building a home does not happen overnight. You’ll need to have other living arrangements until the house is ready. Additionally, the building process can be delayed due to a lack of laborers or available materials, inclement weather, and more.
Average Cost
Perhaps, the most significant consideration prospective buyers and builders have is the price range.
Pros of buying: Buying a home is usually cheaper than building a home. If you want to avoid building costs, labor costs, regulation costs, and more, buying could be the best option.
Cons of buying: The Minneapolis real estate market is a seller’s market. According to Realtor.com, the average cost of purchasing a home in the Minneapolis area is $325,000. Buying a home may be cheaper than building, but keep in mind that it will still be expensive.
Pros of building: The flip side of this elevated cost is paying for what you want. Many builders are willing to accept the higher price point because they get all the aspects of their dream home.
Cons of building: As already stated, building a home will cost you – and may have several hidden fees. Working with custom home builders is an expensive venture. You will have to consider construction cost, labor per square foot, and any additional costs like a wrap-around porch, waterfall island, and a fireplace, for example.
Minneapolis Real Estate Market
So, should you build a home or buy a house in Minneapolis? Each decision comes with its own set of pros and cons, and the “right answer” ultimately comes down to your current financial circumstances and living goals.
Buying a home in Minneapolis can be the right choice if you need a place quickly and you can accept choosing from a limited supply. Building in Minneapolis can be the right choice if you are willing and able to wait and if you’re ready to spend more on a custom property.
The Minneapolis real estate market is burning hot right now, so you can expect higher prices and competition regardless of whether you buy or build.
