So, I'm in the position of considering where (within a given city/real-estate-market) I and my family want to build our next house (which will also be our first experience as homeowners -- we've lived in houses for some time now, but always as tenants). So far, we know that your typical suburban (new plat/subdivision) lot is out for three reasons:

  1. Our current market is not exactly saturated with transit service, and most of what exists is constrained to more urban areas by the realities of transit efficiency.
  2. I, personally, have no wish to contribute to sprawl by being a unit of demand for suburban real estate.
  3. Builder attached lots are of no use to me, nor are HOA'ed lots (an HOA on a SFR has no upside and significant downside for me)

However, I have been doing some research into both appraisal/valuation in general and into valuations in the areas I am looking at, and that raises the spectre of a killer word for many house plans: overimprovement. In particular, while I'm not looking to put tiger maple and granite countertops in a 1000sf econobox house or build a 5000sf mansion in a neighborhood of 1000sf econoboxes, I have a different problem.

You see, I have no affinity for ordinary "stick" construction, and am strongly considering higher-end structure and envelope techniques as a result. While one can get some money back on envelope performance improvements (better HERS rating) based on the limited research I've done, it seems much easier to overimprove on the structural side when building a house than it does in commercial work, where structural build classification (ISO/IBC/M&S construction type) is explicitly accounted for in the valuation process.

This is compounded by the factor that I have no need for a supercomplex floor plan with protuberances and funky angles everywhere, nor am I seeking particularly high-end finishes, fixtures, or amenities. In fact, complex floorplanning is a negative to me, because I am trying to fit the house to urban lot constraints instead of sprawling out over a low-density suburban lot, and that favors simple massing and intelligent use of vertical space.

As a result, the question of "how much house can I put on a given lot?" is a major constraint for me, so how can I figure that out for my real estate market? Furthermore, are there things I can do at this stage to limit the aforementioned overimprovement risk without sacrificing construction? (Say, by being cautious about neighborhood selection, or by facilitating "house hacking" in the design of this house.)

  • 6
    Welcome new user. Encourage you to SHORTEN the question to get more and better answers.
    – Fattie
    Commented Apr 28, 2021 at 2:30
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    Is your question what are the risks of over improvement? What is the likelihood a neighborhood value will change? Why urban plots have different values from suburban lots? I don’t intend to be mean here but this reads like a journal entry not a question.
    – quid
    Commented Apr 28, 2021 at 6:32
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    @quid -- how much risk I'm at of overimproving given the numbers I'm looking at, and what I can do to mitigate it Commented Apr 28, 2021 at 11:31
  • Lumber houses can be built to 110 MPH wind standards with lumber connectors, wood screws, and plywood sheathing. Or there is a construction technique of bolting double wall-studs to 304L set in a wet-pour foundation. Then a joist can sit on one stud and bolt to the side of the other stud. Finally, a bolted blocking is put in place between stud locations with the use of brackets. The whole house bolts together. Another possible construction technique is a light-gauge steel frame house.
    – S Spring
    Commented May 1, 2021 at 16:52
  • @SSpring -- 110MPH is small-potatoes to me (any house built to wind code can meet that). I've researched cold-formed steel (light gauge steel) framing fairly extensively myself as well -- there are some CFS/concrete composite floor systems out there that are not completely unreasonable matches with what I'm looking at, but they aren't quite as performant in some ways Commented May 1, 2021 at 17:25

2 Answers 2


I would be leery of taking assessor's value as gospel, when calculating the value of a house vs. a build-ready lot. Better to estimate it yourself, using recent sales of lots and houses.

Regarding construction for house hacking, from this BiggerPockets podcast transcript, "more bathrooms" equals a more hackable house. That way, you can advertise "private bed, private bath" for every bedroom in the house. Even old reliable Mr. Money Mustache now endorses house hacking.

Last, whenever you construct, you are gambling that the market and your personal income won't turn for the worse before you finish. Many metro areas are in tech booms and/or real estate booms right now.

  • I'm ratio-ing assessor to assessor and sale to sale here, not sale to assessor, and I'm talking more extreme than just "more bathrooms", leveraging inbuilt construction features to ease things like duplex conversion Commented Apr 28, 2021 at 2:24

When you buy a house, the only factor is:

over long periods of time, the price increase may be spectacular, and that couples with the fact that a house is the only thing civilians can invest in where it is possible to have massive leverage.

Over long periods of time, the detail issues mentioned in the question ... are (happily) wholly irrelevant.

You literally won't even remember if you "built" (or ... whatever) the house.

The detail factors (8:1, etc) mentioned in the question are (a) wholly irrelevant to long-term growth (b) completely, totally, impossible to guess or estimate.

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