Building a home in New Jersey has never been more exciting. The value of land and real estate in New Jersey has experienced dramatic increases in recent months and years, especially in suburban areas accessible to New York City. For homeowners and home buyers who want to make a smart investment in their future and their personal comfort, buying land in New Jersey has never been wiser.
But what is the value of an acre of land? What should you pay for land if you're thinking about buying a home? Knowing the answers to these questions is important - especially if you're planning to make 2021 the year you build your forever home in New Jersey.
What Factors Affect Cost of Land?
Many factors can change the cost of an acre of land. It's impossible to say exactly how much land will cost before getting more specific about where the land is and what condition it's in.
Raw Versus Developed
Raw land is land that has never been developed for construction. It has no utilities, no sewer, and often no roads. The cost of developing raw land must be factored into your budget before deciding whether to buy. Raw land typically costs a small percentage of the amount that developed land costs, because of the costs associated with developing the land. If you're thinking about buying raw land, research the cost of development, assuming that you plan to have a home with electricity, plumbing and a road that can access it.
Location, Location, Location
Land costs vary throughout the state. Land near the coast, for example, can be far more expensive (and difficult to find) than land found in undeveloped, non-coastal areas. The cost of buying a lot near the ocean can be high in ways you may not even anticipate. Insurance costs, for example, can be much higher in areas around the beach. Meanwhile, homes built near the ocean also experience maintenance challenges owing to the corrosive nature of salty ocean air. If you choose to buy land near New Jersey coastline, all of these costs must be taken into consideration when creating your budget.
Pristine soil and air can come at a cost, while land that needs remediation may be less costly up front, and more costly post-purchase. Even noise pollution and light pollution can affect the value of a piece of land, if that land is close to a city or the turnpike. If a plot of land seems unusually cheap, there might be a good reason. Have all land inspected from a professional before making an offer.
So How Much Does An Acre Cost?
An acre of land in New Jersey can cost anything from $10,000 to $200,000 per acre. Budgeting for land is an important part of the home buying process, because many mortgage lenders are reluctant to lend money for raw or even developed land. Finding a lender is possible, but down payments are usually high, as well as interest rates.
When budgeting for the cost of a plot of land, plan to pay for the land with your own funds, or start by contacting lenders to find out what you'll qualify for, and how much you can expect to put down. Getting pre-approved is important when the time comes to buy. Some lenders will loan money for land and development, which then can be rolled over into a more standard mortgage once the house is constructed.
What's Happening in the Real Estate Market?
New Jersey real estate's market was booming in 2020, especially in suburban areas around New York City. Pandemic-weary homeowners retreated to areas outside the city, in need of a larger kitchen and more space for working at home.
What homeowners and home buyers want now:
- Space. A spacious home with room to grow is important for home buyers at this time. When purchasing land, take into consideration the size of the lot as well as the distance to the nearest neighbors.
- Energy efficiency. More space means high energy usage, so it's important to use all the latest technologies and ENERGY STAR appliances to control costs and keep energy usage down. Work with a qualified builder to ensure that your energy efficient features, appliances and fixtures are well-chosen and properly installed.
- Outdoor space as well as indoor space. Avoid building a home that takes up the majority of your lot. Having room for you and your family members will improve quality of life.
The real estate market in New Jersey continues to be strong, and there's never been a better time to own a home in the Garden State.
Buying Land? Tips for Controlling Costs
How can you control costs when buying land? You'll have to budget carefully, and be prepared to spend. Control costs by purchasing an undeveloped lot, and work with a contractor who can give you a fair price for installation of utilities. Shop around until you find the lot that's right for you.
It's also important to shop around for lenders, as some lenders charge more than others. You should do the same when trying to find a builder. Remember that costs aren't everything, but it's important to work with a builder who delivers high value at a fair price. Be wary of builders who dramatically undercut the competition. They could be doing so by hiring inexperienced labor.
Want to Build a Home in New Jersey? Get Started by Contacting a Reputable Builder
New Jersey land is valuable, as are the homes that are built on New Jersey land. With excellent schools, accessibility to important urban areas and diversity of population, there are a million reasons to build in New Jersey. Contact GTG Builders LLC to find out how you can get started building your custom home in New Jersey.