Whether you are considering buying a home in Seattle or one of the surrounding cities, if you have started your property search, you know that real estate prices are relatively high compared to other areas in the state. This can be discouraging if you want to fulfill the dream of owning your home, but purchasing an existing home is not necessarily your only option. Many people don’t consider building a new home because they assume it will cost more than buying an existing one. This isn’t always the case, especially in hot real estate markets where prices are continuing to go up.
King County Population Growth
King County is a popular area to move to, and it continues to attract new residents as it ranks high in the nation’s counties with the most growth. Although the main population center is Seattle, the surrounding cities are also experiencing an influx of new residents. The county experienced overall growth of 45 percent in the 28 years between 1990 and 2018. The national population growth during that same period was just 32 percent, demonstrating just how much faster King County is growing.
Cities like Seattle and Federal Way grew at roughly the same rate as the rest of the county at 41.5 percent and 44.5 percent, respectively. Bellevue was significantly higher at 63.9 percent, and Kent and Renton virtually exploded with 239.6 percent and 149.7 percent growth. On the other hand, the unincorporated areas in King County have experienced a decline in population, shrinking by more than half. It’s clear that new residents are moving to the larger cities in King County, while the more rural areas are becoming even less populated.
King County Home Prices
Population growth often comes with a shift in the real estate market, and King County has certainly experienced this. Median home prices in King County in 2018 were the highest they have ever been, topping $700,000 for several months throughout the year. The year closed with a median single-family home price of $597,000 in December. This was significantly higher than the median home price in nearby Kitsap County, which was $344,000 for the same time period. Considering that December and January typically have lower median house prices, it’s reasonable to expect that costs will go back up in spring 2019.
A recent update from Northwest MLS indicates that home prices in King County are continuing to stay relatively high, while inventory remains tight, with less than two months of supply available. This means that if you want to buy a home in King County, you have to act fast when you see one you like. This can be challenging when making such a major purchasing decision, especially for families who must stay within a specific budget. This fast-paced environment also makes it more difficult to predict how long it will take to purchase a new home. First, you must find one that matches your needs and budget, then quickly make an offer before it is off the market. If your offer isn’t accepted, the process starts again. You could end up with a new home in a matter of weeks, or it could take several months to a year.
Custom Homebuilding: A More Affordable Option
While it’s true that the cost of building a new home is on the rise throughout the country, building new can still be more affordable than purchasing an existing home, especially in areas like King County where home prices have skyrocketed. Building a new home includes costs in three primary categories: land, site development, and the house itself.
There are currently more than 600 lots listed in King County, with over a dozen priced less than $50,000 and several dozen less than $100,000. Adair Homes offers a range of floor plans starting between $130,499 and $317,999 in the King County area. Even on some of the more challenging sites with more development required, it’s easy to see how building a new home can come in at much less than the median home price of $639,000.
An Example for Comparison
Consider a 1,750-square-foot home on the market in Federal Way for $351,000. It was built in 1979 and has three bedrooms and two bathrooms. The Odell floor plan, a similarly sized home with three bedrooms and two baths, starts at $166,499 in the East Puget Sound area. This leaves around $185,000 for land and site development, which is certainly possible in the same city. It’s clear that in some cases it’s possible to build a new custom home for less money, build a larger home, or purchase more upgrades to suit your preferences. Not to mention, you wouldn’t have to worry about when new appliances were last installed, which materials haven’t been updated since 1979, when the home was last painted, and how well the previous owners maintained the home.
This is just one example of a case when building a new home in the same city could be more affordable than purchasing a similar existing home. Of course, the cost of building new will depend on the price of available land and the site conditions, but it’s always worth evaluating all of your options before you decide which path to a new home is best for you.
Benefits of Custom Homebuilding
In addition to affordability, there are many reasons you might want to consider building a new home versus buying an existing one.
Yes, you can remodel any existing home to better suit your needs, wants, and style preferences, but that will only add to the overall price tag. When you build new, you have the opportunity to have exactly what you want the day you move in. This includes the layout, number of rooms, paint colors, flooring materials, finishes, and more. If you’re planning to have your parents move in with you in the future, build a multigenerational home. If you want a home where you can safely and comfortably age into retirement, build a single-level house or one that has the master suite on the main level. Design the kitchen of your dreams or finally get the home office you have always wanted. When you build new, you get to make all of the decisions, which means you can have the home of your dreams.
Building a new custom home also gives you more choice in terms of the location. You can choose the lot you want and decide how you want the house to be oriented on the property. This means you can optimize the views, ensure privacy, have a side-entry garage, or design around whatever is important to you. If you can’t find an existing home in the neighborhood you like, look for available land and consider the costs and benefits of building new.
Quality and Maintenance
Not only is your home brand-new, but so is everything in it. This includes modern materials that are designed to last, appliances that are at the beginning of their life spans, and systems built for efficiency. Everything in the home is clean, and you don’t have to worry about how well the previous owners maintained any of the equipment. With a new home, you don’t have any surprises about what’s behind the walls or what prior damage might have occurred. You’ll potentially save money because you won’t have to repair or replace appliances for a long time. You can’t always guarantee this when purchasing an existing home.
Maximize Your Budget
Because you get to make all the decisions, you can invest in the features that are most important to you. When buying an existing home, you might have to remodel to get the extra half bath you want or pay extra for features that you don’t want or need. During the design process, you have the freedom to choose which upgrades you want to fit into the budget and which areas you can save on.
Consider Adair Homes
If you are deciding where to live in East Puget Sound and King County is on the list, consider all of your options. Finding an existing home on the market that meets all of your needs can be challenging, especially when homes move quickly and inventory is tight. While it’s true that building a new home takes time, it might take you the same amount of time to find the perfect existing home. Even then, you might have to compromise on your wish list.
If you would like to learn more about the benefits of building a new custom home in King County, contact our local East Puget Sound office to ask questions or schedule an appointment. Our Home Ownership Counselors are here to help you compare all of your options so you can get the most home for your money. Give us a call today to get started.