When buying a home in Oregon, the typical route that buyers take is to purchase an existing home or a newly-constructed home built by a builder as part of a subdivision.
But there is another way to find yourself a new home in Oregon: have one custom-built for you.
Building a home in Oregon obviously comes with a few extra steps compared to purchasing a property that’s already been constructed, or one that you’ve chosen out of a handful of plans as provided by a subdivision home builder. Among the most pressing questions among those who take this route is, “What is the cost of building a home in Oregon?”
This is a valid question and one that should be considered and answered before you hire a team to have the home built and purchase a plot of land that the home will be built on.
So, exactly how much will it cost to construct a custom home for you in the state of Oregon?
Cost to Build a Home in Oregon
To help you understand what a home will cost you to build, it’s important to understand what the cost is per square foot. With that figure in mind, you would then multiply it by the number of square feet that the home will be. The larger the home, the more expensive it will be.
In Oregon, the average cost to build a brand new home averages at about $135 per square foot. The price can easily go up from there depending on the types of materials you wish to use to construct the home and the finishes you choose.
For example, a 2,000 square-foot home would cost about $270,000 to build (2,000 x $135). This is just a rough estimate, as other factors that play a role in the overall cost of construction.
Having said that, the cost per square foot can range anywhere from $110 to $200 or more, depending on the complexities of the home. If you were to build a home that’s considered more on the luxury side and are charged $200 per square foot, you’d be looking at a cost of $400,000 to build a 2,000 square foot home.
Build in Some Wiggle Room
While the rough estimate of the construction costs based on a per-square-foot calculation can give you an idea of how much you will be paying for your new custom-made home, you’ll still want to leave some wiggle room for additional costs. The last thing you want to do is spend right at the top of your budget, only to find out somewhere along the line that you’ll need to come up with a few more thousand dollars to cover the cost of unforeseen expenses.
A good rule of thumb is to pay an extra 10% to 15% of the original costs of the construction for extra expenses that may not have been originally budgeted for. And the more complex the project, the higher your budget should be. For instance, a more intricate design should have another 15% budgeted in to accommodate potential extra costs.
In the first example given above, an extra 15% would add up to another $40,500.
You should also add other costs into the budget for the construction of a new home, such as the cost of land, utilities, site work, surveys, and building permits. These costs will add tens of thousands of dollars more on top of the actual construction of the house.
You’ll also need to budget for furnishing and decorating the home once it’s been built.
Why Build New in Oregon?
Right now, housing inventory is tight in Oregon. There is currently less than 2-months’ worth of housing inventory available in Oregon, and in certain cities like Portland, that number is even lower. Given the inventory shortage situation in Oregon right now, buying an existing home may be a bit of a challenge.
In this case, building your home may be a viable alternative. This is especially true if you team up with an Oregon home builder with lots of experience building high-quality, affordable custom homes.
You’ll be able to create a home that suits your needs without having to make costly and cumbersome changes to an existing home that you purchase on the market. You can also hand-pick the perfect lot upon which to build your customized home.
Comparing the Cost to Build a Home Versus Buying an Existing Property
Right now, the average home price of a home in Oregon is $398,418, according to real estate research firm Zillow. If you were to pay a builder to build your home for you, you’d be paying about $270,000 based on the figures mentioned earlier. Add in another $50,000 to $100,000 for a piece of land to buy on, as well as a few thousand dollars to cover the cost of permits and other expenses, you’re looking at paying roughly the same price overall compared to buying an existing home in Oregon.
The biggest difference is that you’ll have built a home that completely matches your needs and tastes without having to compromise or make the changes yourself. As such, it may be worth it to spend a little extra time building a home in Oregon that is fully customized to your desires.
Need a Mortgage to Finance a New Home Build?
If you’ve decided that building a new home is the best route for you to take, you’ll want to partner up with a local mortgage company to help you finance this expenditure. Taking out a loan to finance a new home construction project differs somewhat from securing a typical mortgage to buy an existing home. Your mortgage options will differ.
As such, you’ll want to work with an Oregon mortgage lender that can provide you with the exact type of mortgage needed to finance this type of project at a rate and terms that suit your needs.