Should you be buying a house in San Diego, or should you look into building a home in San Diego? Have you thought about building a home in San Diego? is it better to buy an existing house or build one in 2022? Kyle Whissel breaks it down and shares his personal experience about going through this process and why he decided to buy a house as opposed to building a home in San Diego.
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Building or Buying: What is the Right Choice to Make?
Are you thinking about potentially buying land and building a home versus buying an existing home? Hey, I'm Kyle Whissel with Whissel Realty Group. And I want to share a little bit about my personal experience going through this exact same debate with you. My wife and I were ready to make a move. We've been in our house for eight years and just decided, hey, it's time. Let's move to a new area. Let's experience a new lifestyle. And we were looking around at a lot of the homes that were on the market.
And, probably similar to you, you're probably like, "I don't really love any of these homes. Or even when I find a good home it's sold before I can even get to it. So, you know what, screw that. Let's just go buy a piece of land and let's build a home." So I'm going to share a little bit about, again, my experience going through this. We actually did go out and tied up a piece of land. We found a piece of land in an area that we really liked, put an offer in, our offer was accepted. And we were like, "Awesome. Here we go. We're off to the races." And then that's when all the surprises started for us.
So, it's really important to understand what the timing looks like on doing this, what the cost looks like on doing this, and what the financing looks like on doing this. So this is going to be a heck of an experience for you if you've never done this before. So, first and foremost, let's talk about the timing. Now, it's going to vary depending on if you are in the county of San Diego or the specific city that you are in within the county. 'Cause, they're all going to be a little bit different. So, I can't speak for all the cities, or the county if it's on county property.
So I can't speak for everybody, but I can give you a general idea where let's just get down to the bottom line. If you buy a piece of land and your goal is to build a home on that piece of land based on today, here in late 2021. And I don't expect this to change anytime soon, you're looking at a minimum of 12 months before you could even break ground. Before you could put a shovel in the dirt, you're looking at 12 to 18 months just to get started on the construction of that piece of property.
And then you're typically looking at another 12 to 18 months to actually build that home on that piece of property. So, you're looking at anywhere from two years to three years, realistically from the time that you actually purchased this piece of land to moving into your new home. So you're going to have to decide, is that going to be in alignment with the thought that you had? Right? In a perfect world, we've all watched, like "Extreme Home Makeover" and they literally like tear a house down and rebuild it in a week. That is called television. That is not called reality. So be prepared. Two to three years is probably a realistic expectation.
The second thing you're going to have to be prepared for is the cost of doing this. So here in San Diego county, you're looking at, on the low end, you're looking at approximately $250 per square foot to build. On the high end, if you want to do a custom home in, you know, like a Rancho Santa Fe or something like that, you're going to be in the neighborhood of 500 plus dollars per square foot. So, let's think about this, right? If we want to buy a piece of land, which, if you are in San Diego County, let's even remove the deep, you know, east county, north county, the rural communities, let's say we want to be in a suburban area of San Diego County. You are not buying a flat and buildable lot for less than $500,000.
You might be able to get something for less than 500,000, but odds are, it's going to be like on a canyon with a huge slope. It's going to have some issues, whether it's access issues to the property, or it's going to be a massive amount of grading or structural work or all kinds of other, you know, things that are going to be associated with getting that land even ready to build on. So let's just assume best case you find yourself a nice lot for $500,000.
Well, now you're going to have to add on the cost of building. Well, it seems like in today's world, 2,000 square feet seems to be about the minimum size that people are building today. And then we're kind of going up from there. So, let's just run with that 2,000 square foot number. So, in the best-case scenario, you want to just build with, you know, more entry-level materials. You're going to spend about $250 a foot times 2,000 square feet. You're going to be at $500,000 for the building costs, $500,000 for the land. And now, oops, I forgot to mention that building costs, that is the house, that is not all of the driveways, the landscaping, the pool, the fencing, all the other things that are going to come along with it.
So, depending on how crazy you want to go there, it's California, we got beautiful weather, you probably want a pool. Well, the pool is a 100,000 minimum today, and then all that other stuff, that's going to be another 100,000 minimum. So, at this point, you're already up to 1.2 million for entry-level materials. So I want you to think about when you've been out shopping for homes, what does a 2,000 square foot existing home sell for in that area? Is it north of 1.2 million or is it south of 1.2 million? So, you might already be spending far more than what you could just buy an existing home for. And now, let's make this even a little bit more confusing, or, actually, maybe give it a little more clarity, if I'm being honest with you, is the financing. If I want to go buy that existing home that's already built, I mean, if I've served in the military, I'm a veteran, active duty. I could actually buy that home with $0 down.
Or if I'm even in a rural area, there's a USDA loan, $0 down. Or maybe, you know, haven't been in the military, but I still want to get it with the lowest down payment possible. I could do a three to three and a half percent down loan on it. I've got a lot of options and I'm going to get a pretty attractive interest rate when I come in and buy on that existing built home. Now, if I flip over and I'm buying land, and then I'm building on it, more often than not, you're going to end up needing to put at least 20% down, at least 20% down. And the key is, you're going to have to understand if you get a loan, where it allows you to buy both the land and finance the construction cost all into one, once the construction starts on the property, you're now having to make payments on that property while it's being built, while you're still living somewhere else. So now you got multiple payments that are going out simultaneously.
So, have I talked you out of buying land and building a home yet? I'm just sharing my experience. After we went through this whole process, we decided it was a no-brainer, let's go buy an existing property. And, in all honesty, the home that we live in today, if we were to buy a piece of land and build that identical home, it would have probably cost us 50% more and taken two to three years to get the exact same home that we live in today. So if you're thinking about it, maybe you can't find exactly what you want. But if you could check off 9 out of 10 things on your list, and maybe you can even spend a little money to check number 10 off the list after you buy it, I strongly recommend you look at buying an existing home versus going through the headaches and hassles of buying land and dealing with all the construction.
Because, also, as you go through this process, you have to make thousands, thousands of decisions. You got to decide, what doorframe do I want? What width door? How many panels are on the door? What door knobs do I want? What hinges do I want? Like, the thought of making all those decisions is enough to drive somebody crazy. So I hope this helps.
If you really want to explore these two options, maybe you got a piece of land you're looking at and you'd like for our team to help you analyze, should you buy this land or should you buy an existing built home? We'd love to be that resource to help walk you through those options. You can call or text us at the number down below. Our team will connect with you and help you explore those options to make sure you pick the one that's best for you and your family. I'm Kyle Whissel with Whissel Realty Group. Thanks for watching.
