Whether you’re looking to buy land in Oregon or anywhere else, you probably have your own reasons for wanting a piece of bare ground instead of purchasing an already-built home.
For many folks, it’s the idea of having a home built to your own specifications rather than making due with someone else’s idea of your dream home. Sometimes people enter the market thinking they’ll find what they’re looking for but discover that the perfect home just isn’t out there.
That’s especially common in low inventory markets like Bend and Eugene. Eugene in particular has a lack of new or even new-ish construction. So, if you’re looking for contemporary design, the build-your-own route is sometimes the only way to go.
Still, before you go full steam ahead on buying a piece of land, it’s important to know just what you’re in for.
Finding and purchasing a lot is only half of the battle. Once you have land, you’ll probably want to build something on it, unless we’re talking recreational or timber property.
Assuming you do plan to build something from scratch, the rewards can be significant. However, there are also financial risks involved. Read on, and we’ll give you an overview of what to expect.
Where to Find Land for Sale in Eugene and Bend and How Much it Costs
In Bend and Eugene, bare land tends to be just as scarce as existing homes. In both cities, most of the bare land you’ll find for sale will be in very specific areas.
In Eugene, most available parcels are located in the South Hills, with a scattering of plots available in the lowlands on the north side of town. You can certainly find bare land in Eugene for under $100k. Expect many of these lots to be sloped, however, which increases construction costs.
Flatter, better-located, or larger half-acre to one-acre lots tend to go in the $100-200k range or slightly north of $200k. If you want to be in the heart of Eugene, you’re probably out of luck: like most cities, Eugene’s most walkable core is already heavily developed.
If you’re willing to be a bit outside of town, that of course gives you more options, particularly if you’re looking for some acreage. Keep in mind, however, both the time and effort needed to maintain a larger piece of ground and the time and effort needed to get into town. For most folks, that will mean a significant lifestyle adjustment–you won’t want to bite off more than you can chew.
In Bend’s case, a plan to expand its Urban Growth Boundary was passed several years ago. We’re still a couple of years away, though, from any of that land being buildable. For the time being, most of Bend’s bare ground is located in the northwest hills and to the southeast.
When services do eventually make their way out to the outlying areas that are part of Bend’s UGB expansion, that land will be expensive. For the most part, developers have already staked their claim to it.
For that reason, the chance of land prices in Bend dropping in the near future is pretty slim. Bare land is expensive in Bend, and it will continue to be expensive.
On the low end, expect to pay in the mid-$100k range, while lots in the $200-400k range are far more typical. Many of these lots will be under the jurisdiction of a Home-Owner’s Association. HOA fees can range from just a couple hundred bucks to a few thousand dollars per year, and CC&Rs (Covenants, Conditions, and Restrictions) may limit your construction options.
If you’re looking for majestic mountain views–and if you want to live in Bend, who isn’t?–you’re in luck. There are still a number of lots to be found in Bend with some view of the Cascades or the smaller peaks east of Bend.
Lots on the lower end of that range may have filtered mountain views, but for panoramic views of the Cascades, expect to spend upwards of $300k. At the high end, you may pay closer to $500k or even more in Bend’s city limits.
Building on Bare Ground in Bend and Eugene
The key to making just about any real estate-related decision lies in making the proper cost-benefit analysis. You don’t want to overpay for any property, and bare land is no exception.
The tricky thing with land, though, is that you’ll need to factor construction costs into your analysis. The cost to build a house in Oregon varies depending on the specific piece of ground and local markets, but many people are surprised to learn that the costs of building from scratch almost always come in higher than a comparable home purchase.
That’s especially true if you’re trying to build on uneven ground or plan to hire an architect for a custom design rather than use a builder’s template. If you are planning to design from scratch, be sure to keep in mind that the distance between having an idea and executing it, not to mention living in it, is often vast.
One advantage of touring a home is that you have an opportunity to picture yourself inside it. Unless the builder has a model home, new construction is usually a leap of faith.
There are a number of other factors to consider in putting together your cost-benefit analysis. On the plus side, buying new construction means that you’re not going to have to fork over the dough for a roof replacement, re-painting, or new fixtures any time soon.
Do keep in mind though that appliances and window coverings will most likely be a separate ticket, as will anything beyond the most basic landscaping. And even new homes sometimes require repairs.
Once you’ve been in this business for a while, you start to hear horror stories about people who declined inspections on new construction only to find major issues pop up just after their warranty had ended. I typically insist that my clients get a professional inspection even on brand new homes. If nothing else, it’s cheap insurance.
Working with a trustworthy builder is definitely a step in the right direction, and the truly top-notch ones will stand by their work with an extended warranty. We can certainly point you toward some excellent contractors. But if the warranty isn’t included, that’s another expense to factor in.
Then there’s financing. Unless you have the extra dough to make an all-cash purchase, you’ll want to take out a construction loan to cover expenses during construction. Simply qualifying for a construction loan is more difficult than a conventional mortgage. You’ll need excellent credit, a down payment of at least 20%, and a low debt-to-income ratio.
During the average 10-16 months it takes to complete construction, you’ll be paying interest on those funds at a rate at least one percent higher than a conventional mortgage. Since you’ll need to live somewhere else in the meanwhile, you’ll most likely be paying two housing bills at the same time.
A construction-to-permanent loan will convert to a traditional mortgage at the end of construction, but if you need to take out a separate mortgage, you’ll also need to add the extra underwriting fees to your total bill. On the other hand, you can likely secure the second loan at a lower rate.
Manufactured Homes as an Alternative to Building on Bare Land
Of course, your aspirations may be humbler than building a fancy house. Maybe it’s the land you’re more worried about, and you’re willing to settle for a manufactured home.
If a lot doesn’t have CC&Rs (conditions, covenants, and restrictions) that prevent it, there’s nothing stopping you from putting a manufactured home with the proper certification on a foundation. Keep in mind though that you won’t bear the fruits of an appreciating market to the same degree you would with a stick-built home. That’s an important factor if you’re considering making a move at some point.
Apart from manufactured homes, using a trailer or tiny home as your primary dwelling might seem like a tempting solution to climbing housing prices. Unfortunately, it can’t be done legally even in more rural areas around Bend, Eugene, and elsewhere in Oregon.
If you aren’t connecting to public utilities, it may be possible to fly under the radar. For now, though, zoning and land use laws in Oregon haven’t caught up to the tiny home revolution.
Considering All the Options
If you haven’t guessed already, the question of whether or not to buy a lot and build your own home is a complicated one. This has just been a basic overview, but hopefully, you have a better sense of the cost-benefit analysis involved in buying bare land here in Bend and Eugene, Oregon.
Of course, in both Bend and Eugene, there are a number of builders who have purchased lots already and are ready to build based on your specifications. You’ll be limited to some basic templates, but a tried-and-true ticket with your own finishing touches may prove to be just the ticket. Again, you’ll want to be sure to pick the right builder though.
Our job as Realtors isn’t to sell you a home, it’s to provide you with all of the information that you need to make the choices that are right according to your particular situation. Don’t just take our word for it though.