The New-Home Blueprint

THE BUILDING GOING UP on Glen Hubbard's property in Reno, Nev., is certainly eye-catching. His floor plan calls for high wood-beam ceilings, an ornate terrace, and a roomy backyard meditation cottage, with total floor space of more than 5,000 square feet. But what makes it stand out even more is the fact that it's getting built at all. Reno's home market is in the middle of a nose dive that has knocked prices more than 25 percent off their 2006 peak. That's not a problem for Hubbard: Thanks in part to that downturn, he expects to save more than $100,000 on building costs.

Across the country, a small but savvy cadre of homeowners is discovering the ultimate answer to a bleak housing market: Build your own. After years in which spiraling costs and labor hassles made such projects a pricey indulgence, a few people are enjoying a buyer's market for building from scratch, thanks to economic pressures that are driving down prices for land, materials and labor.

Of course, only the supreme optimist would argue that the value of a new home is sure to stay strong in this economy. Yet for almost every gloomy housing statistic, there's a silver lining for do-it-yourself builders. The producer price index for residential construction, for example, rose just 2.2 percent in 2007, after averaging more than three times that from 2003 to 2006. Prices for basic materials such as lumber, insulation and drywall have fallen for the past year. And developers who gobbled up land during the housing boom are now desperate to shed it, dumping land in some markets for under 40 percent of the purchase price.

Building your own home might feel like the ultimate American dream, but there have always been a host of great reasons not to do it. In some cases customization hurts resale value, driving buyers away. There's the challenge of finding an architect whose design style fits your tastes. There's the hassle of getting immersed in the minutiae of permits and building codes. But these hassles are often outweighed by the fact that labor and materials are more easily available than they've been in years. In many markets, builders are squeezing more upgrades and labor savings out of the subcontractors who do most of the work.

When physician Michael Fishman built a new home outside Atlanta for his family over the past year, his builder threw in $60,000 worth of free upgrades, including a spiral staircase, an extra 500 square feet of finished basement and a clay-brick driveway. The builder, Amir Rahbar, says he could offer these deals because construction materials were so much cheaper. Brick, concrete, windows and framing lumber all came in 10 to 15 percent below their 2006 prices, helping to knock the $1 million-plus project about $175,000 below budget. Consumers like Fishman are also scoring discounts on their homes' aesthetic trimmings. Synthetic slate roofing tiles, for instance, now cost up to 50 percent less than quarried slate. When it comes to countertops, certain colors have hit the bargain bin.

There's a limit to how much homeowners can expect to save. Getting discounts from architects can be tough, though they may be more likely to deal if they're sole practitioners who focus on residential work. Would-be builders can try to save money by buying plans from an architectural catalog or by going with a layout recommended by their contractor.

There's one thing homeowners can count on in the custom-home renaissance: the availability of contractors. To begin with, for the first time in years you can get them on the phone — the same day, if not within the hour. Chris Crocker, who's in the midst of a teardown of his home in Palos Verdes Estates, Calif., says that back in 2006, when he was first looking to rebuild, most builders didn't bother to call back. This year, the tables have turned. Contractors cold-called him, raced to submit bids and shaved their estimates so much that Crocker figures his bill will be 20 percent below what he originally expected. To his own great surprise, he's calling the shots.