Wednesday, February 11, 2009
HIT or BUST - BUILDING in a RECESSION or [Depression]?
Like me, you've probably seen a load of articles in log home magazines recently, encouraging individuals to buy and build homes in this present economic climate.
Before you do...stop and ponder for a while before you commit to anything. Otherwise it could end in tears...
Speaking from my current experiences, I wouldn't advise anyone to do this right now, unless you have substantial savings to cover all parts of the project and you know that your job is safe. If we do fall into an almighty depression (some may argue that we are already there), you have to ensure that you have substantial funds to carry you through.
The one thing I would say, land is probably going to come down in value over the next year or so, so from that point of view, it's a buyer's market. Remember, if you do find something you like enough to buy, you'll have to pay taxes on any acreage, so ensure that you have enough greenies ($$$) to cover this.
There are certainly many deals on log home packages, plenty of out-of-work builders, so you could get cheaper prices all round. Although it may be cheaper on the whole to build now, and you can certainly benefit from good deals, don't enter into the project because you think you are getting a bargain!! Building a home from scratch is costly, don't kid yourself into thinking otherwise.
We had planned to build our house well over a year ago, however due to circumstances, (which were out of our control - a story for a later date), we had to find and purchase a new location. By which time we had already ordered our log home, all the logs were milled and ready for delivery. Thankfully our log home company (Moosehead), were gracious enough to store our home until we had found a new location! We would have never chosen to build in such an scary economy! Thankfully we have a great construction loan with a great local bank. The bank's employees are all wonderful people (Bank of Coxsackie), I've never had the pleasure of working with a such a nice bunch of individuals before.
So back to those log home magazines (whose revenues are partly funded by the log home companies, that purchase advertising space in return for unofficial editorial coverage). While they have quotes from various log home companies presidents, motivating people to commit to this sort of project, I have to question if they are really thinking about keeping their own businesses afloat vs your own personal financial buoyancy!