Posted: Sun, 14 Mar 2010 09:55 PM - 44,113 Readers
By: Carrie Alexander
Caleb Schafer was drawn to Central Texas for its creative architecture. But much of what was on the market that appealed to him was not affordable to him.
So Schafer bought raw land in Canyon Lake - about 40 miles southwest of Austin - and built a 1,400-square-foot energy-efficient, sustainable, economical home with a contemporary aesthetic.
"Our home probably cost us between $60,000 and $70,000," Schafer says. "But we did the labor. It was a goal to do it as efficiently as possible."
Schafer, who has a degree in architecture, used his own home building experience to launch Simple Modern Homes, a home building and design company that sells plans for contemporary homes for $2,500.
He says his designs appeal to people "who basically want another option other than what's on the market. What we do is try to provide affordable solutions for people looking to build." He says his company offers "energy efficiency as well as economic efficiency. We are making it possible for the average person to own a well-built modern home."
Sometimes after an extensive search, home buyers realize there are no homes on the market that suit their budget and lifestyle, says real estate agent Jana Birdwell. So they opt to buy a lot and build a home.
These homeowners range from first-timers looking for an affordable yet inspired home to wealthy retirees who want a home perfectly suited to their individual lifestyles.
"A lot of them are empty-nesters, and they can't find what they want," says Birdwell, of Coldwell Banker United, Realtors. "I steer people into building. They get what they want. Half of my real estate (business) is land. I think it's a very wise investment to build."
Building a home is one option for frustrated house hunters, but it presents its own set of challenges. Getting a construction loan, for example, isn't as trouble-free as it once was, Schafer says, although local builders often develop relationships with lenders, which can make the process easier.
If you can obtain the financing, there is plenty of land available in and around Austin, says J.B. Neale, operations manager for Wilshire Homes' Build on Your Lot program. But some lots might require expensive site improvements before they are ready for home construction. Some properties have restrictions that could keep you from building the home of your dreams. Others are budget busters.
You'll pay a premium for lots in certain school districts and exclusive neighborhoods. Land also is more valuable if it's flat, has a city or water view or is close to downtown.
During a recent search on
www.austinhomesearch.com, the public Web site for the Austin Board of Realtors, there were 1,025 listings for lots . The most expensive was a 10.72-acre property in a gated community in the Eanes school district with views of Lake Austin. The price: $8,995,000.Cord Shiflet of Moreland Properties has the listing.
"It's (10.72 acres) on Lake Austin, and that's very hard to find," Shiflet says. "It also has some incredible elevation changes with lots of different building sites. You can go down in a valley or up on top of a hill with commanding views of the lake. It sits right in a bend of the river so you can look at the river in two directions. A typical lot on Lake Austin is an acre. To find something that's (this large) is very rare."
Despite the hefty price tag, Shiflet says, there have been several inquiries about the property, which he says could be divided into three parcels or estate lots, each with a boat dock.
Waterfront and water-view properties will always be more expensive and more difficult to find, Shiflet says. But if that's what a buyer wants and there's nothing on the market, he'll knock on doors until he finds an owner willing to sell.
"Some of the lots I sell are never even on the market," he says.
Few buyers are able to drop almost $9 million for a home site. But you can purchase a lot for less than $10,000 if you're willing to go outside Austin to places such as Bastrop, Leander, Smithville and Canyon Lake.
Several lots are available for less than $5,000 at Tahitian Village, a Bastrop community about 30 minutes east of Austin.
"On Austin's east side there's more available, and it's maybe a little more affordable," Schafer says.
Head west to Dripping Springs and you'll find a handful of available home sites in communities such as Hidden Springs Ranch and Saddletree Ranch for less than $50,000, and in Driftwood communities such as Rutherford West and RimRock, home sites for $50,000 and up.
Proximity to a lake or city center adds value to a property, but also desirable are sought-after views, acreage or a location within a gated or golf-course community, Birdwell says.
Birdwell has several listings for home sites in Belvedere, a gated community on Hamilton Pool Road. All are at least an acre with prices that range from $200,000 to $295,000.
Another listing at 3203 Stratford Hills is in the Eanes school district and offers views of the Capitol, University of Texas Tower and St. Edward's University. It's on the market for $1,399,000.
A two-acre lot that overlooks the Fazio Canyons golf course is listed at $775,000. The property, at 8325 Calera Drive, is one of 53 home sites in a neighborhood in the Barton Creek development, which offers homeowners membership at the Barton Creek Country Club.
As you move closer into the city, lots can be scarce and expensive.
"There are a few lots downtown," Birdwell says. "Probably a handful close to Tarrytown. In Rollingwood, there are very few (listings) that are just vacant land."
She says some buyers purchase properties with the intention of demolishing an existing home to make way for a custom-built house. But city ordinances and homeowner association rules can restrict what you can build, she says.
"And it's an extra cost to tear down a house," Birdwell says. "You have to take that into consideration."
In general, the land costs should be about a quarter of your total budget, she says. So if your budget is $1 million, prepare to pay no more than $250,000 for a lot.
Real estate agents say the key to finding the right building site is determining what the buyer most wants. Cost is an important factor, but it's not the only consideration. Take into account the property's topography.
"Trees are always a big plus," Birdwell says. "And you always want to look for a flat lot, although in some cases that can't be achieved. If it's not flat, slab costs will go up. Site improvements can eat up your budget."
Schiflet agrees, saying, "The flatter the lot, the easier it'll be to build on, easier to figure out septic (installation) and all that. Our (Lake Austin) lot is not at all flat but if you get a spectacular view, it's probably worth it."
Before you buy a lot, analyze how you live, Shiflet says.
"The first thing I do as a Realtor is figure out where someone wants to be - what school district, how close to town or the lake," he says.
Not every lot will be suitable for your dream home because "there are height restrictions, slope restrictions. … There are lots of environmental restrictions in Austin," he says. "Do all the due diligence. I find lots for you to look at. You ask the architect if you can achieve what you want on that lot. I deal in stuff that is half a million and over so the price range that I work in is always a custom home. (Buyers) sit down in an architect's office. They're not picking plans out of a book."
Not everyone who wants to build a home can afford to hire an architect to design a home - and it's not always necessary.
Schafer says his home designs are environmentally and economically sensible, and he will serve as the builder or provide "20 hours of construction support" to the buyer's chosen contractor.
Several home builders in Central Texas offer build-on-your-lot programs, including David Weekley Homes and custom home builder Partners in Building; both have offices in Austin.
Austin-based Wilshire Homes advertises that the company can build a home on your lot for as little as $60 per square foot.
"You can fit almost any budget," Neale says. "You can range from $60 up to $150 per square foot. You have control."
Most of the people using the Wilshire Homes Built on Your Lot program have a budget "between $250,000 and $350,000," Neale says. "On the last 18 contracts, we had an average price of $299,748."
Here's how a build-on-your-lot program typically works: You discuss with consultants to determine budget and home plan options. The builder usually will have a library of floor plans that can be used as is or personalized.
A company representative might evaluate your homesite - often at no cost- for soil conditions, building elevation, water and electric service and wells and septic systems.
"We help the folks determine the site conditions, how to best fit a plan on that lot," Neale says. "We give them an idea of the challenges. We'll sit down and go through their wants and their needs."
Among the factors to consider: homeowner association rules, site preparation, tree management, floor plan, drainage and building codes.
Neale says about half of Wilshire's customers already own a lot. Others narrow down their choices and ask for help evaluating the property as a building site.
"Getting your contractor involved early can help tremendously," Neale says. "If you haven't purchased a lot, it's very beneficial to seek out a professional to help you determine the pros and cons of that lot before making that investment. You'll be better-armed to make the right choice. A lot of people do not do that, and it's costly."
Tips for building on your own lot
Local building industry professionals say it's essential to be aware of building codes, zoning ordinances and other restrictions that can affect your home building project. For example, there might be restrictions on the size and placement of your home, as well as fences and other structures such as a guest house. Here are a few other questions to ask yourself before you buy a lot:
• How accessible is the lot? If you have to cross private land, you'll want a deeded right-of-way that gives you and any future owners a legal right to access the land.
• Are city water and sewer connections available for this property? What about electricity and phone service? Cable and Internet connections? Factor in these costs if you have to dig a well and install a septic system.
• What kind of utility easements exist on the property and how will it affect your construction project?
• Are there any proposed public works projects planned nearby such as highway construction? You'll want to know how this will affect the value of your property.
• Will the lot's topography require extensive and expensive site development? This will affect your home building budget.
• Have you already chosen a house design? Will your design fit on this lot? You might have to change your house plan to adapt to your site.
• Will the neighborhood suit your needs?
