Is it Cheaper to Build or Buy a House in the Tri-Cities?

Generally speaking, it’s cheaper to buy an existing home in the Tri-Cities than to buy a new one. But that’s not always the case. Market conditions and other factors can impact the affordability of building vs. buying a home.

In my 21 years as a Tri-Cities Realtor®, I’ve sold more than 600 homes. I’ve represented local home builders on the sale of new construction homes. I’ve helped clients buy new construction homes. And I’ve helped both buyers and sellers with existing homes. My husband and I even built our current home in 2011-12, so I know what you’re going through with this decision!

In this article, I’ll share my thoughts on the pros and cons of buying or building a home so you can make the decision that’s right for you.

Let’s start with the costs — an important factor, for sure, but not the only one to consider.

2024 Average Prices: New Construction vs Existing Homes

	New Construction	Existing Homes
All Tri-Cities*	$516,436	$445,654
Kennewick	$511,475	$432,495
Pasco	$480,296	$444,761
Richland	$608,671	$461,342
West Richland	$458,914	$458,771

As you can see above, based on average sales prices, building a home was more expensive than buying one. Here are the percentage differences in average sales price city by city:

• All Tri-Cities: new construction sold for about 16% more than existing homes
• Kennewick: new construction was 18% more expensive than existing homes
• Pasco: new construction was about 8% more expensive than existing homes
• Richland: new construction was about 32% more expensive than existing homes
• West Richland: new construction was 0.03% more expensive than existing homes (essentially even!)

If you look at median prices instead, new construction ranges from about 4% to 37% more expensive than buying a home. Have a look.

2024 Median Prices: New Construction vs Existing Homes

	New Construction	Existing Homes
All Tri-Cities*	$459,900	$415,000
Kennewick	$459,850	$401,000
Pasco	$429,995	$415,000
Richland	$592,850	$434,000
West Richland	$397,250	$450,000

(* by “All Tri-Cities,” I mean Kennewick, Pasco, Richland, West Richland, Benton City, and Burbank)

You’ll see one exception on the bottom row. In West Richland, the median sales price last year shows that it was cheaper to buy a new construction home. Here’s why: West Richland had less than 50 new construction sales last year, and about half of them involved two developments where townhomes were priced in the $350K to $375K range.

So, aside from that unique situation in West Richland, you can plan on spending more to build a home than to buy one. But there are other things to consider beyond costs.

Pros of Building a New Home

Even if it is usually more expensive, new construction has a lot of benefits.

1. Customization. When you build a home, you can get exactly the home you want — or close to it. When we built our current home back in 2011, we were working with a production builder, so our home wasn’t 100% customizable. But both Matt and I had a lot of fun going through the process of customizing the available floor plans and options.
2. Modern amenities. When you build a home, everything inside will be new, of course. That can include the latest smart-home technology if you want it. It can include other modern conveniences and features that might be difficult or expensive to add to an existing home.
3. Energy-efficiency. New construction will include the latest, energy-efficient appliances — from refrigerators to HVAC systems and more. That should help you save on utility bills compared to buying an existing home of the same size with older appliances.
4. Builder warranties. New construction often includes a builder warranty to give you peace of mind about any unexpected repairs in the first few years.
5. Joy! As I’ll mention below, building a new home can be a stressful process. But speaking from experience, when you get to the end and walk into that new home — your new home — it can be a very emotional experience! Moving into any new home should be joyous, but moving into a home that your decisions helped build is really special.

Cons of Building a New Home

There are also some potential downsides to new construction. Consider these:

1. Unexpected expenses. In addition to being more expensive, new construction almost always involves unexpected costs. Design changes, delays, and other surprises can add to your overall cost. It’s smart to set aside some extra money or at least plan for this in your budgeting.
2. Longer timeframe. Obviously, it takes longer to build a home than to buy one. When we built our home, I think the work began in mid-November and we moved in on March 5 — a little less than four months later. Some production builders can get you into your new home within 12 weeks, while true custom builds can take nine months or longer.
3. Stress. This won’t be the case for everyone, but I’ve had many buyers feel a lot of stress due to all the decisions and the waiting period that comes with building a new home. When we built our home, I remember my husband would often drive nervously to the new home site, hoping that everything was progressing perfectly and on schedule! (But, as I said above, there’s an incredible feeling of joy when you finally move in!)
4. New neighborhood. Depending on where you’re building, your new “neighborhood” may not be a neighborhood at all! It might not have a fully developed infrastructure, might lack nearby amenities — heck, you might not even have new neighbors! I’m putting this under “cons” because it can be a pain to have to drive an extra 5-10 minutes to grab a gallon of milk or a few necessities for dinner. But I know being further away from town would be a “pro” for some. 😊

Pros of buying an existing home

Now, let’s look at the pros and cons of buying an existing home.

1. Unique design styles. Home styles have changed dramatically over the years. Some older homes may have distinct styles and features that aren’t available with new construction — or might be especially expensive if you hire a builder to do a true custom build.
2. Available now. Generally speaking, there’s no wait when you buy an existing home other than the normal timeframe for the sale to process and record. That typically takes about 30-45 days from the time you and the seller sign the purchase and sale agreement.
3. You can negotiate the price and other terms. Unlike the generally fixed costs of new construction, you’ll be able to negotiate the price with the seller. Knowing how much to offer and then negotiating the best sales terms are among the most important things a real estate agent does for buyers.
4. Established neighborhood. When you buy an existing home, you’ll probably be moving into an established neighborhood with nearby schools, shopping, and other amenities that might life that much easier and more enjoyable. (Again, I’m aware this might be a “con” for some buyers who prefer privacy and having more space!)

Cons of buying an existing home

Things aren’t always all sunshine and rainbows when you buy an existing home. Here are some of the potential risks and problems.

1. Repairs and maintenance. Homes that have been lived in may also have been damaged. This is why I always recommend my buyers pay for a professional home inspection. That helps reveal any potential issues with the home’s condition, and we can then negotiate for repairs during the purchase process.
2. Less customization. Obviously, when you buy an existing home, you don’t have the luxury of building things to your exact specs — without perhaps taking on a major renovation project that could add tens of thousands of dollars to your costs.
3. Energy inefficiency. An existing home may not have modern technology and appliances that will help you save on utilities.
4. Potential health hazards. Homes of a certain age may have issues with lead paint, asbestos, and other things that are considered health hazards. Again, a professional inspection will help identify these.

Things to think about when choosing to build or buy

The choice to build or buy a house isn’t an easy one. Yes, it’s usually cheaper to buy an existing home, but there’s more to think about than just the financial considerations. If we were having this conversation in person, here are a few questions I’d ask you:

What’s your timeline? If you can wait several months before moving in, building a custom home can be a great option. If you’re in more of a hurry, you’ll need to focus on existing homes that are on the market now.

What features do you need in your next home? Building a home gives you more control over the design and amenities. If you have specific needs, the existing inventory of homes for sale may not offer what you’re looking for.

What’s your lifestyle like now, and what will it be like in the future? If you have a family with young kids, or you’re planning that soon, you might prefer to be in an existing neighborhood with schools and kids of a similar age.

There’s no one-size-fits-all answer to the “build or buy” question. It comes down to your priorities, plans and goals, and maybe the current market conditions, too.

I’ve helped hundreds of buyers work their way through these pros and cons. If you’re not sure which path is best, get in touch anytime. We can chat on the phone or go grab a coffee — whatever’s easiest. I’ll be happy to answer any questions you have and tell you about my experiences helping clients build a new home and buy an existing one.