If I Buy a Bank-Owned Lot, Can I Build a House Quicker or Cheaper Given the Current Slowdown for Builders?

Just as many homes have gone into foreclosure, so have quite a few empty residential lots. Some of these are in prime neighborhoods or on pristine rural land. If you are purchasing a lot, current conditions could make this the ideal time to build a new home or commercial building.

According to an article in the Wall Street Journal Online, the housing slump has caused overruns of lumber, drywall and other building supplies, pushing prices down. It has also put many carpenters, tile layers, landscapers and other subcontractors out of work, meaning that labor costs may be lower — or more negotiable.

Commerce Department statistics show that single-family home starts in September 2008, fell 31 percent from the same month in 2007. That makes for a drop of almost 50 percent since September, 2006. The lack of work has forced builders and construction companies to take smaller jobs than in the past or to lower their costs for large jobs just to stay in business.

While looking for the lowest price for your construction job, don't forget that you get what you pay for. Just like in good times, prices that seem too good to be true, very well may be. If one contractor's price is much lower than all the others, make sure they are offering the same services and are properly certified or licensed and insured.