When considering a move or home upgrade in the Twin Cities, how do you decide whether to remodel your existing home, buy a new one, or build a custom home? Real estate trends, construction costs, and personal lifestyle preferences all play a significant role. Here are some insights to help you make the best decision for your family’s future.
The Twin Cities housing market is dynamic - influenced by inventory levels, interest rates, and construction costs. Since COVID-19 a lower housing inventory has made finding the perfect home more challenging with bidding wars driving up prices. Higher mortgage rates have further impacted their affordability. Meanwhile construction costs continue to rise with labor costs and material costs leading the way.
Cost Considerations: Remodeling costs vary based on the scope of the project. Luxury home remodeling around Minneapolis and St Paul can be a significant investment but adds value to the property. However, unexpected issues—such as plumbing, electrical, or structural problems—may arise, thereby increasing costs. Check out our article all about home remodeling costs.
Timeline: Depending on the scope of the project, remodeling can take anywhere from a couple weeks to several months to complete. Consider the impact on your daily routine and plan accordingly - such as arranging for temporary accommodations or adjusting expectations for noise and disruption. Read more about remodeling timelines.
Best for: Homeowners who love their location or neighborhood but want updates to match their evolving preferences and family lifestyle. If you’re looking for better organization, function, or modern style, remodeling can transform your space while preserving the character you love. If you plan to stay in your home for years to come, remodeling may be a good choice.
Cost Considerations: Purchasing an existing home means dealing with current market prices, which are currently higher due to low inventory. Additional costs such as inspections, appraisals, and agent fees may apply.
Timeline: The home search process, financing, and closing typically take a few months, but it’s generally quicker than building a new home or undergoing a major remodel.
Best for: Buyers looking for a move-in-ready option without the hassle of construction or renovations.
Cons: It can be hard to find a home that meets all of your desires. You may have to compromise on certain features, and you might still end up remodeling later to meet your original hopes and dreams.
Cost Considerations: New home builders around the Twin Cities are dealing with fluctuating construction costs, which impact overall pricing. This option is typically the most expensive - especially when land purchase and development costs are included (in addition to architectural design, interior design, and construction costs).
Timeline: Designing and permitting for a new custom home can take 4-6 months. Construction on such a home typically takes 12-18 months (depending on scope and other factors).
Best for: Homeowners with specific design preferences who are willing to wait for a tailored living experience. Custom homes are ideal for families with unique needs, such as accessibility features, open floor plans, or specific room configurations not easily found in existing homes. A custom home allows complete control over design and materials.
When deciding between remodeling, buying, or building, consider the following:
Equity Growth: Remodeling can increase your home's equity, but it’s important to assess your current mortgage and how refinancing or a home equity loan could impact your budget. Buying or building may require a larger upfront investment but could offer longer-term financial benefits depending on the market.
Future Needs: Envision how your space will adapt to your family’s needs over time. Is your home’s layout adaptable, or would a custom home be better suited for future changes? New homes and extensive remodels can be designed to allow for additions or expansions, such as an extra floor or larger footprint. If your current home has zoning restrictions or limited space, a new build might offer more long-term potential.
Deciding whether to remodel, buy, or build in the Twin Cities depends on market conditions, personal preferences, and long-term financial goals. Remodeling can be ideal for those who love their current location but need updates to better suit their lifestyle. Buying is great for those looking for a move-in-ready home or a new neighborhood with different amenities. Building a custom home offers the ultimate personalization but requires patience, decision-making, and available land.
Ultimately, the best choice aligns with your lifestyle, budget, and vision for your ideal home, ensuring long-term satisfaction and investment value.