The Pros and Cons of Building a Custom Home

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SOURCE: Realty Times

Right now, many would-be homebuyers are facing a predicament, which is that there is a limited inventory of properties available. That might be one reason to consider building a custom home, but there are others.

There are downsides to think about at the same time. Whether the pros outweigh the cons depends on your unique situations and preferences, but the following are some of the upsides and downsides to at least make sure you’re aware of before making a decision.

The Pros of Building a Custom Home

When you’re thinking about building a custom home, the following are some of the upsides.

You Can Get Exactly What You Want

When you buy an existing home, undoubtedly, there are some things you’re going to have to settle on. You may be able to change them or update them later, but you’re more than likely not going to get precisely what you’re looking for.

When you build a custom home, you get what you want in every detail. You can design the space in a way that’s going to work for your lifestyle and your taste. At the same time, you have to be careful that this doesn’t turn into a home that’s so specific that you’ll be unlikely to sell it in the future.

You Can Customize Your Location

When you opt to build a custom home, you’re not just getting all the things you want in the house itself. You’re also getting the ability to choose where you want to build. For example, maybe you love the idea of buying land where you’ll have no neighbors around you, or you can have a beautiful view.

You’ll Have Less Maintenance

If you buy an existing home, you’re almost always spending at least some of your free time and money on maintaining it and making repairs.

When you have a brand new home, you can save thousands on maintenance each year. You’re not going to spend your weekends making repairs, and you’re free to do other things.

Of course, you’ll still have some upkeep you’re responsible for, like maintaining the lawn, but a lot less so if you bought an existing and especially an older home.

The Cons of Building a Custom Home

It’s not all upsides when it comes to building the home of your dreams. Downsides to think about include:

It’s Expensive

Building a custom home will cost more money than getting a comparable existing home in almost all cases. You’re going to have to work with a builder, and labor will be around 40% of your total costs. Along with labor, you’ll be paying for permits, design fees and of course the building materials. You can lower your costs somewhat depending on the materials and finishes you choose, but it’s tough to get labor costs much lower than what you’re quoted initially.  

Construction Loans Are Challenging

When you build a home, you may need a construction loan. Construction loans typically require a 20% down payment, and lenders consider them higher risk, which is the reason for that.

You’ll provide the lender not only with the documents you would typically when getting a traditional mortgage, but you’ll also have to provide plans for your project, estimated costs, and information about land value. You’ll have to give the lender a signed contract with the plans for your project, specs and the timeline for construction.

Building Can Take a Long Time

Finally, another downside that you’ll need to think about carefully is that building a custom home can take a long time. It will take at least three months to build a small, simple house. If you’re building a bigger home, you can count on it taking a year or more in some cases. Many delays can occur along the way, ranging from weather conditions to having trouble making decisions on certain things.

SOURCE: Realty Times

Don’t Let Unrealistic Pricing Cost You Your Move

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SOURCE: KCM

These days, you’re going to want to get your price right when you get ready to sell your house. Honestly, it’s more important than ever. Why? While you may want to list high just to see what happens, that’s a plan that can easily backfire, and it’s going to cost you in today’s market.

And the risk isn’t just missing out on offers, it’s missing out on the move you needed to make in the first place.

The Real Pitfall of Overpricing

Many homeowners remember what their neighbor’s house sold for a few years ago, and they want to chase that same sky-high number. The problem is, that was a different market.

Today, there are more homes for sale. Buyers have more options to choose from. They don’t have to get into bidding wars where they offer way over asking just to compete. Now they can come in at, or even below, list price. And if you’re not open to that, they’ll move on. Lisa Sturtevant, Chief Economist at Bright MLS, explains:

“Buyers will have more leverage in many, but not all, markets. Sellers will need to adjust price expectations to reflect the transitioning market.”

But here’s the good news. You still have one big advantage as a seller. According to the Federal Housing Finance Agency (FHFA), home values went up by a staggering 54% over the last 5 years. So, even if you compromise just a little bit on your sale price today, odds are you’ll still come out way ahead.

The challenge? Most sellers aren’t thinking about it that way. They’re stuck on what a neighbor got months or years ago – and that’s a costly mistake.

Overpricing Can Stall Your Whole Move

Here’s what happens. A seller lists too high. Buyers stay away. No offers come in. The house sits. And suddenly, that seller is facing a tough decision. Do they cut the price? Stick it out? Or give up altogether?

Unfortunately, a late price cut may not be enough. Buyers often see that as a red flag that something’s wrong with the house. That’s why some sellers are opting to just pull their listing off the market entirely.

In a recent survey from John Burns Research and Consulting (JBREC) and Keeping Current Matters (KCM) over half of agents (54%) say there are more homes being taken off the market than usual.

And the top reasons for that? According to the agents, homeowners didn’t get any offers they felt were fair. The survey from JBREC and KCM explains it like this:

“Sellers holding onto high price expectations is the leading reason they are delisting their homes.”

BrightMLS data backs this up:

“. . . sellers are delisting after having their home on the market and finding they are not getting the price they hoped for.”

It’s more proof pricing too high does more than turn buyers away, it puts your whole move at risk. Because if no one looks at your home or makes an offer, how are you going to sell it?

The Secret To Making Your Move Happen

If you’re selling to relocate for a job, need more space for your growing family, or have to be closer to your relatives as they age, you can’t afford to get stuck. You need a pricing strategy that helps you move forward – and that starts with the right agent.

The sellers who are winning right now are the ones working with experienced local agents who know the current market and aren’t afraid to have honest conversations about price.

And it’s paying off. In the right price range and condition, homes are still selling fast, sometimes even with multiple offers.

Bottom Line

Pricing your house for today’s market isn’t just about getting it sold. It’s about making sure your move doesn’t stall before it starts.

Talk to an agent about what buyers are really paying right now in your area, and how to price your home to match.


SOURCE: KCM

October King County Market Watch NW | Chris Doucet

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Condo vs. Townhouse: Which Investment Will Turn Around More Equity After a Decade?

SOURCE: Realtor

For buyers who have been priced out of single-family homes, condos and townhouses often look like the next best bet, and it’s easy to see why: Both promise lower price tags, lighter maintenance, and an easier entry point into ownership.

But how those advantages translate into long-term wealth can look very different depending on what and where you buy.

The last decade has been a remarkable one for homeowners, with values climbing across nearly every corner of the market. Yet the race between condos and townhouses has been closer than many realize. Each has produced substantial equity gains, though subtle differences in their performance hint at deeper divides shaping today’s housing market.

Those divides are growing sharper as affordability pressures mount. In some regions, condos have surged ahead, fueled by urban density and city demand. In others, townhouses have captured the edge, riding the scarcity of single-family homes to deliver returns that feel almost indistinguishable from detached housing.

For buyers weighing their next move, the question isn’t simply condo versus townhouse—it’s how local market forces will shape the equity you build over the next decade.

Neck-and-neck appreciation nationally

To gauge where condos and townhomes may head over the next decade, it helps to look back at the last one. 

Single-family homes appreciated 87.3% from 2014 to 2024, according to Realtor.com® senior economic research analyst Hannah Jones. Townhomes nearly matched that pace at 86.5%, while condos trailed only slightly at 82.7%.

That modest gap reflects the different roles condos and townhomes play in the housing market. 

“Single-family homes are still the most popular type of homes purchased in the U.S. However, condos do appeal to buyers who want a smaller square footage and less upkeep,” explains Jessica Lautz, the National Association of Realtors® deputy chief economist and vice president of research. “Condos are also significantly more affordable than single-family homes, which allows buyers who are downsizing or those just starting into homeownership to embrace condos.”

Still, the numbers show townhomes have been edging closer to single-family performance. 

“Over the last decade, condos and townhomes appreciated almost in lockstep, but townhomes have pulled slightly ahead recently as buyers chase ‘house-like’ living without the single-family price tag,” says Jones.

While both property types have delivered strikingly similar returns from a national lens, as in all things real estate, the real gains come down to location, location, location.

Regional trends: The real divergence

In the Midwest, condo prices rose 78.3% over the last decade, outpacing the 70.7% growth of townhomes. The South followed a similar pattern, with condos climbing 66.7% compared with just 53.1% for townhomes. 

The dynamic flips in higher-cost regions. In the Northeast, townhomes surged 80.5%, far ahead of the 58.6% gain for condos. And in the West, townhomes appreciated 83.8%, edging past condos at 78.9%.

Affordability explains much of the split, says Jones. 

“In the more affordable Midwest and South, condos have gained ground faster than townhomes. In higher-cost regions like the Northeast and West, townhomes have appreciated more quickly,” she explains.

In lower-cost markets, condos benefit from their clustering in downtown areas and their appeal to buyers chasing city living. But in expensive, supply-constrained metros, the premium shifts toward townhomes. 

“Townhomes are commanding a growing premium as buyers seek a house-like property when single-family homes are out of reach. In more affordable markets, condos—often concentrated in dense city centers—have captured stronger growth as buyers compete for limited housing options,” she adds.

The case for townhouses

“Townhomes look set for steadier growth,” says Jones. Part of that is because of what you get when you buy one.

When you purchase a townhouse, you own both the structure and the parcel of land it sits on. That land ownership gives you more control, typically fewer restrictions, and it can be a stronger driver of long-term appreciation. 

“Generally townhouses have strong appreciation potential because the land itself appreciates in a more reliable way,” explains Aman Sharma, a real estate agent at SERHANT.

Eric Hughes, a real estate investor and coach with Rental Income Advisors, agrees. “The price growth of townhomes will track extremely closely with the price growth of single-family homes in general,” he says.

That connection to single-family homes is key. The “single-family feel” broadens their appeal to a wider range of buyers—families, downsizers, and even first-timers looking to get their foot in the door.

They also tend to come with lower HOA fees than condos. That not only frees up more buying power for the mortgage itself, but it also makes resale easier since future buyers are less likely to be put off by steep monthly dues or looming assessments.

But Jones warns that this investment isn’t free of potential headwinds. In markets where single-family inventory is expanding and prices are softening, townhome demand may take a hit as more buyers opt for detached homes instead.

The case for condos

“In tight urban markets, condos can still shine as buyers get creative,” says Jones.

Even though the appreciation rate of condos has lagged behind townhomes and single-family homes nationally over the last decade, they can still deliver strong returns in the right conditions.

“In big urban markets, condos are often the most desirable type of urban residence, and can appreciate strongly,” says Hughes. That means that in places like Miami Beach, New York, and San Francisco—where land is scarce and demand for city living is strong—condos dominate. 

“There are certain parts of our city where highly amenitized condo high-rises perform better than townhouses from an investment standpoint,” says Miltiadis Kastanis, executive director of sales at Compass, based in Miami.

Lifestyle amenities are another draw. Concierge service, pools, gyms, and other perks make condos especially attractive to luxury buyers or second-home seekers who prioritize convenience. For full-time residents, those amenities can also translate into higher perceived value when it’s time to sell.

But again, Jones stresses that there is greater potential for some bumps in the road for condos, ranging from rising ownership costs to competition from single-family homes and townhouses.

Hidden costs and risks that eat into equity

The experts we spoke to stress that your return on investment isn’t just about appreciation and loan paydown. The hidden costs of homeownership can chip away at returns. However, it’s worth noting that even single-family homes can fall prey to these same traps. 

“While single-family homes may not have an HOA fee, some communities do even for single-family homes,” says Lautz. “Maintenance can be more expensive when a homebuyer must account for costly items such as roofs, which a condo owner is unlikely to be responsible for.”

While it’s true that owners of single-family homes must shoulder all their own maintenance costs, condo owners risk getting hit with special assessments that may cover repairs or upgrades to facilities they don’t use, or work that should have been done properly the first time around.

Rick Bannon, global real estate adviser at One Sotheby’s International Realty, points to a condo in Miami where residents were hit with a $1 million special assessment just to bring the building up to safety standards.

That’s why Joe Luciano, broker at Re/Max Bentley’s, takes special care when helping his clients through a condo purchase.

“When advising clients on a condo purchase, we always want to get the meeting minutes to see if there’s any chatter around potential projects coming up and then also the financials to see if they have the appropriate amount in reserve funds to cover any surprises,” he says.

Outside of special assessments, Luciano says monthly HOA fees can take a big bite out of a homeowner's return on investment.

“When looking at the two as investments side by side over 10 years, the appreciation could be similar, but paying an extra $300 to $500 a month is a sunk cost of $36,000 to $60,000 that didn’t go toward your mortgage principal,” explains Luciano. 

At the extreme end, he points to luxury Boston high-rises with $2,000-plus monthly HOA fees that have seen stagnant appreciation in recent years.

So which is a better investment after 10 years?

If the last 10 years prove anything, it’s that condos and townhouses will both continue to deliver strong returns—just not always for the same reasons, or in the same places.

Townhomes have shown they can reliably shadow the trajectory of single-family homes, powered by land value and a “house-like” appeal that buyers continue to prize. Condos, by contrast, thrive where affordability and density drive demand, making them especially potent in urban cores and lower-cost regions where buyers are squeezed out of detached homes.

The next decade may sharpen these divides. As affordability pressures deepen, first-time buyers could lean more heavily into condos, reviving demand in downtowns that have seen uneven recoveries since the pandemic. At the same time, zoning reforms and the ongoing shortage of single-family homes could keep pushing buyers toward townhouses as the closest substitute for a detached home. Policy choices—from property tax incentives to how cities handle condo reserve requirements after recent safety crises—will also influence which type of property captures the bigger share of appreciation.

For investors, the lesson isn’t to pick one winner and walk away. It’s to understand how local affordability, supply constraints, and regulation interact to tilt the playing field.

SOURCE: Realtor

LUXURY TRENDS | SEPTEMBER 2025 | CHRIS DOUCET

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Luxury Trends | September 2025 marketingcenter--