Estimating Home Building Costs
What does it cost per square foot to build a new home?
One way or another, this is the most frequent question we get asked. Unfortunately, it is also one of the few questions that we don’t have a simple answer for. Can you tell me how much it costs to take a vacation or send my kids to college? How much per pound should I expect to spend on a new car? What is the “average cost” of a dinner for two? These questions contain so many variables that it is impossible for anyone to answer them accurately without first asking several additional questions and gathering much more information. The same is true when calculating the cost to build a new home.
Let’s begin by considering what square foot homebuilding costs really are — nothing more than the total cost of a given project divided by the total number of square feet in that project. So, a 2,000 sq ft home with total construction costs of $250,000 would cost $125 per square foot to build. Spend another $50,000 on a gourmet kitchen, an elegant master bath, marble tiles in the foyer, a fancy curved stair, 10 foot ceilings, or any other combination of “above average” features or finishes and that same 2,000 square foot house would now cost $150 per sq ft to build; an increase of 20 percent.
Now consider the structure itself. If the house in question is a ranch, with all of the finished area on one floor, the roof would have to be large enough to cover the entire 2,000 feet of living space. Turn that single level ranch into a two-story colonial and the roof size is instantly reduced by 50 percent because the second floor system became the “roof” for half of the area on the first floor. Increase the roof pitch from 3/12 to 12/12 and the roof area (including framing members, sheathing, shingles) quickly increases by 35 percent. Of course, these examples are oversimplified because they don’t consider any other differences like the need to add the cost of stairs and take away the space they occupy, or in the case of a slab-on-grade foundation, the difference between the cost of a concrete slab verses a wooden floor system, but hopefully the point has been made. Costs of similarly sized homes can also vary considerably due to the shape of the building, the number of corners or offsets in the design, the type of foundation and required local footing depth, the pitch of the roof, and many other design characteristics that are not directly related to the size of the house. GREEN building products should also enter your thoughts as you build your new home, and we offer many options to help save on energy bills down the road.
Next we have all of the regional, governmental, political, seasonal, and unpredictable human factors to add to our estimate. Development impact fees, which more and more state and/or local jurisdictions are charging owners or land developers, can range from a few thousand dollars to more than $50,000 per single family home. Labor and material costs can vary substantially based upon the time of the year, complexity or uniqueness of the project, good or bad economic times, jobsite conditions, regional markets, the unemployment rate, local building codes, construction moratoriums, zoning laws, covenants and restrictions, availability of supplies and workers, weather conditions, natural disasters, public or private water and sewer, and several hundred other factors. And, to make matters worse, there really isn’t any uniform method of measuring square footage or defining what is included in those numbers. Are you using exterior dimensions or interior dimensions? How do you define heated or unheated space? Have you included the garage or basement or unfinished loft areas in their calculations? What about decks or covered porches? Is the land included in the square foot costs? What about building permits, liability insurance, utility connections, wells, septic systems, driveways, sidewalks, landscaping…
The only way to be sure that your homebuilding budget is reasonable is to identify every item that will be used to build your individual home and bid all of the associated subcontracts and labor costs. Of course, in order to do that, you will need to have plans and specifications and you will need to develop a complete and thorough estimate for your individual project. The obvious problem here is that not many people want to buy a dozen different house plans and then spend weeks or months pricing them in order to determine which one(s) they can afford to build. So, a more realistic approach to determining how much your new home will cost might be to simply work backwards. Start by determining how much you can afford to spend, then be realistic about the size of the house you need, and finally, decide what and where you can afford to build.
As an Envision. Home at last…® builder, we have the plans and pricing tools, to quickly and accurately provide you a guaranteed price on your new home. We can price out one of our standard models very quickly (everything from simple home floor plans to lakefront house plans) with many selections of various products for you to choose from. We can price out custom plans in a few days. We can help you throughout the home-building process to guide you through the decisions that will affect your lifestyle and your budget.
Price per square foot is a real variable that is really dependent on the selections you make to that home. A typical entry level finish can range from $90-$115 per square foot, Mid range finish level can range from $110-$160 per square foot, a high end finish can start at $150 per square foot and go well beyond $500 per square foot, again depending on the selections you choose. This would only be the home itself, in additional to that you would need to include: site development costs, land costs, well & septic (or water & sewer), and landscaping.
There are plenty of financial resources on the Internet or discuss it with your local banker that will help you learn more about mortgages and calculate monthly payments for a given loan. After you have a good idea of your financial situation you can look in the real estate section of your local newspaper, online, or in real estate guides for land and lots that appeal to you, we can assist you in finding that ideal location to build your new home.