Should You Build a Custom Home in Miami Shores?

Building a Home in Miami Shores: Costs, Timelines and Upsides of a Custom Home 

This article focuses on the costs, timelines, and other questions you might have regarding Building A Custom House in Miami Shores. At the end of this article, you’ll understand if it financially makes more sense to buy a custom-built home or build one yourself instead.

How Much Does It Cost to Build a House in Miami Shores?

Building a house, especially a high-end custom home, starts at $650 per square foot. It’s important to note that this cost is calculated based on the gross square footage, not just the air-conditioned space. This comprehensive rate covers all aspects, from tiles and lighting to millwork and flooring, ensuring a fully finished home. While the minimum cost per square foot is $650, it can go up to $1,000 per square foot or even higher.

Custom homes come with a higher price per square foot, but the value they offer is unquestionably worth it, often commanding significantly higher selling prices. While custom homes do carry a higher per square foot price tag, I am committed to providing guidance on what makes financial sense. I can offer insights into market caps and estimated selling prices based on your desired finishes. I prioritize transparency and won’t encourage overspending. As your agent, I’ll help you determine your spending ceiling, ensuring you build a home you love and can profitably sell when the time comes.

Is it Cheaper to Build or Buy a Luxury House?

In prime areas, the price of purchasing a ready-made home has seen a remarkable surge. Compared to the previous year, property values have risen by 20% to 30%, and the increase is a staggering 50% when we look back just two years. Despite this surge in demand, our market is experiencing a significant shortage of newly built homes, even though a massive 90% of buyers are actively seeking new properties.

At present, the cost of a custom-built home on a dry lot can fall within the range of $900 to $1,400 per square foot. If you have your sights set on a custom waterfront home, you should be prepared for expenses ranging from $1,700 to even $2,500 per square foot. Considering these price points, building a house in Miami Shores can often be the more financially prudent choice.

Is This the Right Time to Build a Custom Home?

From a real estate perspective and considering market analysis, my unequivocal recommendation is to opt for the construction of a custom home. This choice not only aligns with sound financial principles but also avoids overpaying for someone else’s efforts and time. The current state of the market is characterized by extraordinary property values, making it an opportune moment for the creation of luxurious custom homes. The demand for such homes has surged, resulting in sales prices that are now 50% higher than pre-pandemic levels. Exemplary custom homes, particularly those with meticulous finishes, consistently command prices that exceed expectations and set new records.

Given the scarcity of such properties, buyers are willing to invest generously in acquiring them. Therefore, even if the construction cost averages around $800 per square foot, the potential for selling at $1,4000 or higher per square foot represents a remarkable 75% profit margin.

* Read the Housing Report 2024:Q1-Q3 to see if home values have gone up or down

The Process of Building a Custom House

Step 1: Land Selection

It’s essential to be aware of varying regulations, including restrictions on the percentage of land you can build on. Finding the perfect land can be challenging in the Shores therefore I often explore off-market opportunities.

Step 2: Assembling Your Dream Team 

Assemble a team: designer, architect, and General Contractor. Involve the designer early to align architectural and interior design, preventing delays and extra costs. Early collaboration avoids complications and overspending.

Step 3: Design and Sketches

Now, you’ll dive into the design process, with your team providing full designs and sketches of your future home. This stage usually involves a two-month back-and-forth process before final plans are ready.

Step 4: Refining the Details

With your schematic designs in hand, the next step delves into the finer details of your home, including interiors, exteriors, materials, and finishes. You’ll also engage electro-mechanical consultants and structural engineers to bring your design to life and prepare for city submissions. This phase typically spans 8 to 10 months.

Step 5: The Permitting Process

The next stage involves obtaining the necessary permits, which requires submitting your team’s plans to the city for approval. Typically, permitting takes 8 to 10 months, following the design phase, resulting in an 18-month timeframe from design to permitting.

Step 6: Demolition and Ground Preparation

Demolishing a home is straightforward; permits take a few weeks. Plan utility disconnection two months ahead to avoid delays. Careful pre-construction planning is essential.

Step 7: Construction and Interior Finishing

Home construction takes around 18 months. Initial phase (6-8 months) builds the shell, including roof, doors, and plumbing. Next, 8 months finish interiors, plumbing, electrical, and millwork.

Final Recommendations Before you Start Building 

1. Understanding the economic context is vital when making your decisions. Make sure that the chosen location can accommodate the type of property you aim to build. Cutting corners is not advisable when building high-end custom homes, as discerning buyers are willing to invest in quality. Quality supply is limited, and well-executed homes consistently attract potential buyers.

2. Selecting the right team from the very beginning is crucial. It’s not just about the numbers; it’s about choosing a team with a proven track record, extensive experience, and a demonstrated ability to work cohesively. Checking their references is essential, and it’s a wise practice to speak with previous clients about their punctuality and adherence to budget. Working on high-end homes with top-tier finishes necessitates skilled labor, which can be challenging to secure. In Miami, finding artisanal labor is not always straightforward. Successful teams have a closely-knit, in-house workforce, minimizing reliance on subcontractors.

3. When it comes to interior design, it’s important to set realistic expectations. It’s vital to differentiate between knowing your preferences and being prepared to invest in them. It’s not uncommon for buyers to opt for the lowest quote, only to later discover unexpected delays and increased costs.

Building a home has many challenges, however, it can see some of the biggest rewards and yields in real estate investing. Often, paying for someone else's work can come at a premium, with the downside of not loving the home. Building your custom home has its benefits: built to taste, greater yield, and location.

If you are considering building a home vs buying a move-in ready home, please give me a call at 617-733-2519 and we can chat about the pros and cons of both. As always, please read the other articles about Miami Shores on our recent blogs.