Friday, October 11, 2024

Floor Space and Yard Size Equal: Two Stories is Cheaper

Home buyers on a budget should consider looking at small two story homes versus one story homes if budget is the overriding factor. One story houses take up more land per square foot than their two story counterparts. Therefore a 1500 square foot two story house can fit on a smaller lot a still yield the same sized yard. This makes the cost of building them cheaper. Plumbing, electrical, roofing, and land costs are lower. That 1500 square foot one story home will have a foot print on the land of about 2000 square feet including the garage and exterior walls. The same home with 800 square feet upstairs will have a smaller foot print of about 1200 square feet including the garage and exterior walls. The roof will be smaller and the plumbing and electrical systems will be closer together and cheaper to build. The two story version will fit comfortable on a 5000 square foot lot, whereas the one story version will need a larger almost 6000 square foot lot to have the same yard size.

Resale small two story homes tend to be about 10% cheaper than resale one story homes of the same size in a similar neighborhood. That is $40k-50k savings in our local market. For the budget minded, this could be the difference between qualifying for a loan and not. 

Don't get me wrong, I think the one story is a nice way to go, no stairs and they tend to feel a bit larger in the main living areas, but keep in mind that if the one story is out of reach, then look at the two story homes to help you get into the market. 

I see quite a bit of whining on the internet about how expensive houses have gotten over the last few years but some of these people should have bought a house back when they were 20% less expensive and mortgage rates were at the all time low. It is quite possible they were too picky about the houses and decided to wait. Waiting is rarely a good idea in real estate. There are a handful of times when it is a good idea, for example someone who was looking to buy in the summer of 2008 and decided to wait, probably did real well to do so. That was the last time it was a good idea to wait. So unless you think major economic collapse is eminent, buy what you can afford now, you will get a chance to upgrade later on.


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