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As buyer demand continues to outpace inventory in Eagle County, a common question is should you consider buying land and building or waiting for the right home to come to market?

It’s not an easy decision, but an important one to consider, particularly if you are set on getting the home you imagine or want versus what may be available. With limited inventory, you are more likely to have to compromise based on what’s available and in your price range. In the build scenario, the initial challenge is on available land for your desired location and then navigating the approval and various fees that come with building on a lot.

A case in point is a client who is relocating to the area. Their budget is in the range of $1.2 million to $1.5 million and they want a central location so they can visit family in Summit County and the Roaring Fork Valley, including needing to have easy access to an airport and hospital for work. In addition, they want to be close to other young families and an elementary school.

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Ideally, they’d like to buy a Village Home in Eagle Ranch, which fits their price range and size requirements but there is very limited inventory. Not wanting to wait and see, they asked about building options. The couple found an affordable lot and we are working through the numbers to see if they can come close to their budget.

Whether you’re buying or building, it’s important to note that prices go up significantly for land or existing homes based on location. The closer you are to the resort areas, the more limited your options will be, along with a higher price tag. To help you with your buying decision, the following are key points to consider in your buy vs. build journey.

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Build it

The first place to start in calculating related costs is the land purchase, along with considering what’s available and how it compares to where you want to live, including the neighborhood, community, and lifestyle. There are currently good land options in the Eagle Ranch, Gypsum, and Dotsero areas.

Lots from ¼ to ½ acre range in cost from $290,000 to $550,000, with larger properties from 5 to 35 acres starting around $1 million depending on nearby amenities. As you get closer to Vail, a ½ acre lot, if you can find it, can cost $1.5 million or more.

For construction, estimate $500-$700 per square foot downvalley in the Eagle area and up to $1,000 or more per square foot in Vail and Beaver Creek. Additional factors to consider include the quality of the home, trim and finishing packages, availability of materials, and weather conditions.

Next are architectural fees, which can cost $20,000-$50,000 or more for an Eagle area home depending on the size and complexity of your home. The average architectural fee to design a home depends on the project’s complexity, the architect’s experience, and the scale of the home. Architects may charge by the hour or by a fixed fee. You can easily go up to six figures for larger and resort-based homes.

An often-overlooked item in the build sector is survey costs. These can easily add another $5,000 or more to your total costs depending on the property and the survey you choose. AcreValue is an excellent resource that provides access to essential data and mapping resources so you can make informed decisions.

Additional fees to consider are utility hookups and infrastructure, including tap fees (well vs. water), landscaping and irrigation, and county annexation, if not already in place.  There is also the Design Review Board, which requires a review and permitting. Permitting costs vary by the size of the building/home. Add another 10-15% to these costs for a project contingency fund.

Buy it

Currently, the average cost of a single-family home in Eagle County is around $3 million. This factors in higher priced homes that can exceed eight figures in Vail to lower-priced homes downvalley, including Eagle Ranch with a range of $1.2 million to $4.5 million. Additional expenses to consider are closing costs (2%-5% of purchase price); financing; inspection ($450-$3,000 depending on home size and how dated it is); property taxes (average Eagle County tax rate is just under 4%); renovation costs; insurance; and maintenance (estimate 2% of a home’s value each year).

For buyers who have the desire and ability to wait for the right home at the right price and understand there may be some compromise and potential renovations, it may make more sense to buy an existing home. If you are set on a certain style and type of house and want something new, it may be easier and more time-efficient to start with a blank slate and build a custom home.

Helping you find and buy the right home or land for the right price takes an experienced broker who understands the nuances of Eagle County’s different markets, along with vetted contractor relationships to make sure your experience is as smooth as possible and meets your needs. An experienced broker should present you with several options, including negotiation recommendations, so you can make the most informed decision based on your needs, budget and timeline.

Amy Pates is a leading real estate and luxury home broker with Coldwell Banker Distinctive Properties. She brings 30+ years of experience in residential, ranch, land, and commercial acquisition, development, marketing, sales and property management. Amy can be reached at 970-977-0483 or amy@rockymountainred.com.