Boise, Idaho, has been a magnet for new residents in recent years, thanks to its booming economy, high quality of life, and relatively affordable real estate market. For those looking to settle in this vibrant city, one of the biggest decisions is whether to build a new home from scratch or buy an existing one. Both options come with their own set of costs and benefits, which are crucial to consider in making an informed decision.
BUILDING A NEW HOME IN BOISE
Building a new home can be an exciting and rewarding process, offering the chance to customize everything from the floor plan to the finishes. However, it comes with several costs that potential builders need to be aware of:
Land Purchase: The first step in building a home is purchasing a plot of land. In Boise, the cost of land can vary significantly depending on the location, size, and proximity to amenities. On average, expect to pay between $100,000 to $250,000 for a suitable plot.
Construction Costs: The actual construction costs are perhaps the most significant expense. As of 2024, building a new home in Boise costs between $150 to $250 per square foot. For a 2,500-square-foot home, this translates to $375,000 to $625,000. This cost includes materials, labor, permits, and other related expenses.
Architectural and Design Fees: Hiring an architect or a designer to create your home’s blueprint and design can add another 10-15% of the total construction cost. This could range from $37,500 to $93,750 for a 2,500-square-foot home.
Permits and Fees: Building permits, utility connections, and other regulatory fees can add up to $15,000 to $30,000.
Landscaping and Exterior Work: Once the home is built, additional costs for landscaping, driveways, and other exterior work typically range from $10,000 to $50,000.
Contingency Fund: It's wise to have a contingency fund of about 10-20% of the total construction budget to cover unexpected expenses, which can amount to $50,000 to $125,000.
Total Estimated Cost: Taking all these factors into account, building a new 2,500-square-foot home in Boise can cost between $587,500 to $1,173,750.
BUYING AN EXISTING HOME IN BOISE
Purchasing an already built home offers a different set of financial considerations:
Market Price: The median home price in Boise as of 2024 is approximately $525,000. This price can vary based on the home's age, size, location, and condition.
Inspection and Appraisal Fees: Before finalizing a purchase, buyers typically pay for a home inspection and appraisal, costing around $500 to $1,000 combined.
Closing Costs: These can range from 2-5% of the home’s purchase price, equating to $10,500 to $26,250 for a median-priced home.
Renovation and Repairs: Depending on the condition of the home, you may need to spend on renovations or repairs. This can range from minor cosmetic updates costing a few thousand dollars to major renovations that could run upwards of $50,000.
Homeowner's Insurance and Property Taxes: Ongoing costs for insurance and property taxes should be factored in, typically around 1-2% of the home’s value annually, amounting to $5,250 to $10,500 per year for a median-priced home.
Total Estimated Cost: The initial cost to buy an existing median-priced home in Boise, including all associated fees and potential renovations, ranges from $536,000 to $602,250.
COMPARATIVE ANALYSIS
When comparing the costs, building a new home in Boise can range significantly higher, from $587,500 to $1,173,750, compared to buying an existing home, which ranges from $536,000 to $602,250. However, building a home offers the benefit of customization and the assurance that everything is new and under warranty. On the other hand, buying an existing home provides immediate availability and potentially lower costs.
Factors Influencing the Decision:
Customization: Building allows for a tailored home to your specifications, while buying may require compromises or renovations.
Time: Building a home can take several months to over a year, while purchasing an existing home can be completed in a matter of weeks.
Market Conditions: Fluctuations in the real estate market can affect the cost and availability of both land and homes.
Personal Preference: Some people prefer the charm and established neighborhoods of existing homes, while others value the modern amenities and energy efficiency of new builds.
Ultimately, the decision to build or buy a home in Boise hinges on individual priorities, budget, and timelines. Both options offer unique advantages and challenges, and potential homeowners should carefully weigh these factors before making their choice.
The other question you want to think about or look at, are builders keeping up with the demand. For several years now they were falling behind as the housing market demand was in its booming years after Covid. They are just starting to catch up to the average from years past as you can see from the image.
