In current market might be cheaper to build than buy a home

Posted: Updated:

PHOENIX - It's a buyer's market and many potential homebuyers are finding deals in foreclosures, but it may actually be cheaper to build the house of your dreams.

In Cave Creek a section of desert land here is actually four different housing lots, all of them recently sold and about to be developed by a small contracting company.

Each home is being built for less than what new ones sell for right now.

“The buying experience in this market isn't great, you're either looking at a bank owned house that you may be bidding against 8 to 10 different people for or a short sale which you may wait six months and it's basically a moving target,” said Pam, who is building her new home.

In about six months, Pam will have her shiny new home.

The Arizona Department of Housing said people are going this direction because the price of land has dropped along with the cost of materials and labor.

Real estate agent Tiffany Young sees this first hand.

There are frustrated people out there and they're not willing to go down the road of a short sale or bank owned uncertainty and they can get a brand new home at the price of a bank owned or short sale.

Who this hurts are those trying to sell.

Jeff Dilts has seen very little interest in his Tatum Ranch home since putting it on the market as a short sale.

Everybody is hurting for business, so everybody is cutting their prices, so I could imagine you could build a house for a lot less than what it cost to build a house or any other house built in the 90's or in the last decade.

Building a new home isn't for everybody. Young said you have to be able to wait several months for it to be built and most likely put down a large deposit.

On the flip side you get a new house, you get to be involved in the building and it creates a few jobs for people.