Building a house on Long Island instead of buying is more expensive, but many say it's worth it

After living for about a decade in East Meadow, Mukesh Kumar, his wife and three children had outgrown their home.

When they learned about Sycamore Estates, an 18-home subdivision going up in Nesconset where they'd be able to customize their own house, they jumped.

"This has always been a dream. We wanted to build a new house," said Kumar, 48, a mechanical engineer. He moved into his home in December after about an 18-month process and spent $1.44 million.

Long Island buyers are facing higher prices — the median single-family home price was $850,000 in Nassau and $685,000 in Suffolk last month, OneKey MLS data showed. Those costs, coupled with low inventory, may be the greatest determinants of what kind of home they can buy.

For some, a home with an older vintage, a sense of history and well-worn features that can't be easily replicated in a modern home is preferred. For others, building a dream house without living through construction, or getting a move-in ready home with the latest amenities is worth the high price tag of a new house.

Based on U.S. Census building permits survey data, the Long Island Builders Institute compiled a 20-year look at housing production on Long Island and found that the number of permits dropped from 6,618 in 2005 to 2,237 in 2024.

The 2008 housing crash changed the home building industry on Long Island, which has never fully recovered, notes Mike Florio, CEO of the builders institute.

"Even during strong housing markets in recent years, production has hovered around 2,000 homes per year, far below pre-2008 levels," Florio said. "Typically, Suffolk County accounts for about twice as much new housing as Nassau, with roughly 1,200 to 1,500 homes built annually compared with about 700 to 900 in Nassau."

Working with developers

With low inventory driving up the prices of existing housing stock, more customers are now considering new construction, Peter Musso said. He and his brother Paul Musso helm Team Musso for Realty Connect USA.

Buyers question themselves and say, 'If I'm going to spend X to get a house that still needs to be renovated and doesn't check all the boxes, let me consider new construction.'

— Peter Musso, of Team Musso, which represented Terra Construction Group's Sycamore Estates

Whether a buyer can get involved in the building process is typically driven by need, timing and budget, Peter said, adding that there's great demand for multigenerational layouts and single-floor living.

"For a comparable cost to purchasing and renovating an existing home, buyers can build and customize a residence designed specifically for their lifestyle — meeting their needs not only for today, but for tomorrow," Peter said in an email.

The Mussos also consult with developers, working with them on all aspects of the process, including entitlements (getting everything through zoning boards) and then marketing the development on the home sales front.

"We do advise them on the style, the size, the bedroom count, what the front elevation should look like," Paul said. "Sometimes bigger is not always better."

The brothers also work with buyers.

"Sometimes we see situations where it's a mom and dad buying and the kids are living in the secondary quarters and they actually flip-flop that once the younger kids have kids of their own," Paul said. "So, you kind of want to think ahead as the home gets built."

You can get what you want

At the time the Kumars got involved with the project, Terra Construction Group had site plans for the vacant land on which they planned to build 18 homes on three cul-de-sacs.

"You pick your lot and then they give you options of the model homes that they are going to build. Once we finalize the changes, that's when we get into the contract, we put the deposit down and then they start building the house," said Kumar, noting that it took about seven months to build.

Some of the changes they made to the exterior were the roofline, the façade (from stone to brick), raising the height of the portico, widening the entrance and altering the garage and windows. For the interior, they left the living room ceiling 9 feet high, rather than the suggested vaulted ceiling that would've gone straight up to the second floor.

"I put an office up there and then the extra space that I had, I increased the size of my bedrooms, my bathroom, the walk-in closet," said Kumar, noting that he also changed the stairs and railings, foyer and bathroom finishes.

Their new home, which has five bedrooms, plus an office, four full bathrooms and an unfinished basement, cost them

$1.34 million

plus an additional $100,000 for upgrades.

The extra time they had while the house was under construction afforded them more time to put their East Meadow house on the market.

"It was good because we were able to lock in the price on this house and we were able to sell our house a year later at a higher price," Kumar said. Their 2,300-square-foot home had five bedrooms, three bathrooms and sold for $900,000, he added.

Buying a house that's yet to be built means lots of planning: being able to wait out the contractor's timeline and adjusting your budget for upgrades that can add up quickly, Kumar said.

"In the end, our vision came to reality and all the changes to the floor plans, elevations, finishes and upgrades to doors, kitchen, appliances, etc., that we made, when they all came together, it was an awesome feeling," he said.

Start to finish on a spec house

A seasoned Long Island homebuilder of more than three decades, Walter Morris does mostly spec building, developer-built homes designed to appeal to a broad market, and some custom building.

"We buy land where we can and design homes that fill the marketplace, to the best of our ability," said Morris, owner of Morgan Creek Development.

For spec jobs, Morgan Creek buys the property, gets approvals from the town and proceeds with building. In rare instances, they let a buyer make some finishing details on the home, such as kitchen cabinets, appliances and counters.

"It's a little bit easier for us if we make those decisions ourselves and complete the house," Morris said. "It helps the project move along much quicker."

Two of Morris' homes on the market are a six-bedroom, 6½-bath on 2 acres, asking $3.999 million and a five-bedroom, 5½-bath on 4 acres, asking $4.25 million. The Cold Spring Harbor properties are part of a three-home subdivision, the land for which Morris paid $1.875 million. Higher end homes like these two cost between $350 to $500 per square foot, depending on the finishes.

"It took approximately four years to obtain approvals to subdivide the property into three building lots and a few hundred thousand dollars in additional costs: surveying, engineering, legal, architectural fees, permitting, bonding, inspection fees and required municipal improvements — fire hydrant, road widening, water tap fees, fencing, etc.," Morris said.

His clientele includes first-time homebuyers and those looking to upsize, and downsizers on the hunt for more manageable properties, Morris said.

New homes, Morris said, are very expensive to build, with construction costs at least 50% higher than three or four years ago.

"Land costs are the highest I've ever seen; construction costs are the highest I've ever seen, so it's very hard to build a new home today and be able to sell it at a profit under a $1 million," he said, noting that it costs about $500,000 to construct a 2,000-square-foot home, which doesn't include land and other various costs. "So, it becomes a stretch for a lot of first-time homebuyers."

Despite the cost, a brand-new home has the advantage of being move-in ready, without the need for any remodeling.

"We sell all of our homes in turnkey condition. They've already been outfitted with all of the high-end materials and features that today's buyers are looking for," which include custom cabinets, marble or quartz countertops, stainless steel appliances and extensive architectural woodwork throughout, Morris said.

New homes today are built to more stringent building codes than in the past, requiring better insulation, and high efficiency heating and air conditioning.

"These systems we put in will save the homeowner considerably on heating and cooling bills going forward," said Morris, adding that there are increased drainage requirements, which means that the rainwater won't pond on the property, sit against the foundation and eventually get into the basement.

New homes at a higher price point — at around $4 million — take longer to sell than those in the $2 million range, said Leslie Yudell Beder, of Signature Premier Properties, who is selling Morris' Cold Spring Harbor homes.

"It takes a while because a lot of buyers at that price point are spending the top of their budget and they want everything to be perfect," Yudell Beder said.

Going for charm and character

They bought the home for

around $900,000

and estimate an additional

$200,000 in renovations

over the course of up to 10 years.

After relocating from Los Angeles and renting for a year in Garden City, Sadie Harloff and her family found their dream home last summer: a circa 1928 three-bedroom, two-bathroom in Rockville Centre.

"I was always going to end up in an older home," said Harloff, 48, a makeup artist/esthetician who paid approximately $900,000 for the home. "I wasn't looking for a new build: They don't build houses like this anymore. It's got charm and it's got character and it's cozy. The whole block is similar homes."

The arched doorways, wall moldings, original doors, floors and fireplace, and old fixtures are some of Harloff's favorite things about her new home. Adding to the charm are the house's many windows.

Harloff's block has homes of similar vintage, and she loves living two doors away from her neighbor's 200-year-old black oak tree, a focal point from yard.

"The whole view from our yard is just trees and landscaping from our backyard and surrounding properties," she said.

They plan to make changes to the house, including finishing the attic and basement, but will probably tackle one or two big projects a year.

"Our immediate plans are to put a mini-split AC in the family room," said Harloff, adding that she wants to update the bathroom and kitchen at some point. "We'd love to make the garage into a home gym. I'd love to redo the upstairs bathroom, which is also from the 1980s."

An older home is more within reach for most homebuyers, notes Mary Darcy, of Daniel Gale Sotheby's International Realty, who sold the Harloffs their home.

"An old house can end up costing people a lot of money because things haven't been done to them. But you can make upgrades little by little," said Darcy, adding that older homes that have been renovated, particularly with new kitchens and baths, can demand much higher prices.

According to Darcy most buyers today, especially younger ones, don't want to get involved with the effort of updating their home, particularly if they're busy working long hours every day.

"But if they do, they want the charm of an older home and distinct rooms — not an open concept," Darcy said. "I do think young buyers who work one or two days a week from home don't want just a big open space: They need office space."

For Harloff, who thinks the revamp will run about $200,000 and take between five and 10 years to complete, renovation work isn't too big a deal.

"We had to find a house that was livable immediately, but we didn't have to do anything," said Harloff, noting that they moved the laundry, added a gate for their dog and painted the house right away. "The rest of it we're doing slowly, by priority."