PORTLAND, Ore. (KOIN) — Building a home may take longer than buying one, but for Oregon and Washington residents, a new study says that building could be cheaper and more cost-effective in the long run.
Storage space marketplace StorageCafe revealed which states had more affordable home building costs versus home buying costs in a recent report.
The online marketplace determined each state’s approximate home-building cost by adding the price of land on median-sized lots to the median cost of a construction contract, and then an additional 10% for other expenses such as permits, surveys and fees for real estate agents.
Using this data from real estate marketplace Point2 and the U.S. Census Bureau, StorageCafe found that constructing a new home is more affordable than buying a pre-existing one in many West Coast and South Atlantic states.
Washington was ranked the 11th state with the biggest savings for building homes versus buying them. According to the study, Washingtonians would spend about $493,000 on total building costs, which is $66,000 cheaper than the median single-family home cost of $559,000.
At No. 14, with an average total building cost of $502,000, Oregon was a mere three spots behind its neighboring state Washington.
“Oregon has considerably greater median residential land costs at $113K per acre, but savings of $43K can still be made by building rather than paying the median price of $545K for a ready-made house,” StorageCafe said. “Building costs can be a little more expensive in Oregon than in other West Coast states but building away from the big cities tends to lower the amount required.”
Hawaii, California, Colorado, Utah and Virginia were the top states where constructing a home was less expensive than purchasing one already on the market.
Still, there were a number of states where home-buying was significantly cheaper than home-building.
In Pennsylvania, StorageCafe says that residents can save about $183,000 when buying versus building. Ohio, Illinois, Maine and Iowa followed as the other states where single-family home listing prices were more affordable than total building costs.