How to Choose Land for a Custom Home Build in San Diego, CA
San Diego is one of the best places to live in the world. With a booming tech industry, some of the best craft beer in America, and easy access to the desert, mountains, and the beach, San Diego is quickly becoming most of the attractive places to live in the country. This has made the housing market in San Diego highly competitive with consistently low inventory. This has driven the cost of living up, but when compared to other metro areas like New York, San Francisco, or Los Angeles, San Diego living is much lower.
The truth is that the land market operates differently from the detached home market. As of February, new lot listings are up 900% YoY, and the total for sale is up 740% YoY. We see more people looking to sell their land because of the increase in demand and the rise in median home price. However, land prices have only increased 13.7% YoY as opposed to 15.2% for existing homes. Lots have appreciated 10% slower over the past year in this market. The average price of land ($349k) is down 8% YoY, while the average price for detached homes ($1M) is up 20% YoY. The time between when a lot comes on the market and when an offer is accepted is four times longer (4.4x) than detached homes, at over 119 days.
The land / lot you choose will be critical to realizing your vision for the perfect home. In San Diego, there is a wide variety of land types including lots on the coast, lots with a view, lots in existing neighborhoods (“infill lots”), rural lots, and more. It’s important to understand what your vision is for the home, so the team can advise you on the right properties. When we’re searching for lots for sale in San Diego for your project, we’ll be considering a lot of factors based on these individual goals.
Here’s an overview of how to evaluate a lot:
Ensure the land is buildable for the home you want
You’ll need to buy a lot or piece of land that fits the goals you have for your custom home. This means that the land should be suitable for your vision in terms of its lot lines, easements, setbacks, and zoning. These lot parameters will have an important impact on the design and the build of the final product. This is why you need an A-licensed general engineering contractor or civil engineer as a partner from the beginning to help you through this process.
Determine what utilities are present
You’ll want to understand what utilities are present on any given lot and which ones need to be brought to the property. The main utilities you’ll want to identify are electricity, gas, sewer, water, and Internet. There can sometimes be hefty costs to bring utilities to the site, so your builder will need to work with all local utilities to determine those prices upfront since they will impact your land and build budget. Some utilities may not be available on your desired lot, but that’s not always prohibitive to the development because there are other options that range from wells to septic systems — both of which can make up for a lack of traditional utilities.
Factor improvement costs into the total price of the land
Required land improvements can impact your all-in budget, so you want to be fully aware of the costs associated with a particular piece of land. There’s some land that requires relatively little groundwork, and some land that would require great improvements and take up a significant chunk of the budget. Ideally, you will want to spend as few dollars as possible to make the lot feasible and maximize your home build.
Understand the impacts of land topography
San Diego’s topography is characterized by a lot of hills which can impact the amount of usable land on a property. We’ve seen multiple acres of land for sale, but only 10% of it is actually usable without improvements because of its geographical layout. Importing or exporting soil and making other improvements can be costly and require additional time and permits, so you’ll want your builder with you to evaluate the land and determine if you’re willing to front additional money for necessary geographical improvements. At Buildable, we can give our clients a clear picture of the costs to lot prep and grading, so you can move forward with confidence.
Know if the roads on the property are public or private
A number of lots in San Diego have been subdivided by a developer and may not be on a public road. A public road is maintained by the city and repaired with your tax dollars. A private road will need to be maintained by you, the resident, and this could have impacts down the line if any road repairs become necessary. Being on a private road doesn’t kill the project, it’s just something you should be aware of.
How To Proceed
Finding land and completing due diligence on all these factors is crucial for a smooth building process. At Buildable, we lead our clients through this process and aim to find simple lots, so our clients can maximize their budget within the home itself. There aren’t any other companies in San Diego that have streamlined the process the way we have and we’re always happy to discuss your project and how we would approach it.
Buildable takes the fear and stress out of finding land and building your dream home by managing the process from start to finish. We have a new approach that partners you with the right experts to bring simplicity to the process of purchasing land and building a new home. Buildable enables you to be a land developer to maximize the value and equity of your new home build.
Our process works as follows. First, we help you locate and purchase the land, ensuring that it’s capable of supporting your vision. Second, we help you design your home based on your unique lifestyle and interests, guiding you through the design process to ensure the best balance between your dreams and your budget. Third, we bring your dream home to life with some of the best quality craftspeople in San Diego.
We are innovators of this approach. Talk to us, and you’ll see how we are different.
