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What's it cost to build a new home?

By Chris Schreiber

Real Estate Agent with Kiemle & Hagood

January 16, 2009 10:22 AM

Now if that's not a loaded question, I'm not sure what it is and there is really no good answer.

We have a good friend that built a beautiful home with his own labor for under $75/SqFt but I've seen homes exceed $300 or even $400/SqFt.

So what's my answer? It all depends ... (1) how big of a home are you looking to build? (2) what level of quality and finish are you expecting? (3) are you anticipating completing any of the work yourself? (4) what's the site like including access, topography, water, sewer, power, phone availability? And the list goes on and on.

I think it's reasonable to expect that you could have a reasonable quality home built for $150/SqFt but the potential range is significant. My ultimate recommendation ... invest the time and potentially some upfront capital, interview a few architects and meet with several general contractors. If you select quality individuals who are familiar with the area, they will be able to give you a much better idea and a much more realistic budget. After getting a better feel for a budget add another 25-50% for contingencies, change orders and upgrades. Basically, plan for the worse but work toward the best outcome.

Anyone have thoughts on how to answer this loaded question?

Chris Schreiber / Century 21 RiverStone

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John Mulkey

TheHousingGuru.com - Waleska, GA

Housing Guru

Chris, I was asked that question many times during my 40 year building career, and I agree, there's no answer. It can vary several hundred dollars per square foot, depending upon many of the conditions you mention and include interior and exterior finishes, cost of cabinets and counters, appliances, lighting, flooring, etc. I feel that I could build a nice home today for about $75 per ft. cost, and for about twice that amount could build a luxury home. But, it's impossible to quote until you see the location, plan, and discuss finishes.

Jan 16, 2009 10:32 AM

Chris Schreiber

Kiemle & Hagood - Sandpoint, ID

CCIM

Exactly ... and one of the big factors I did not mention is geographical location. I was involved with some major home builders in Southern California we estimated homes as inexpensive as $45/SqFt. If you built that same home here in North Idaho, it would fall apart the very first winter!

Thanks for the feedback.

Jan 16, 2009 10:37 AM

Julie Chapman

Julie Chapman Broker - Ormond Beach, FL

Daytona Beach Shores, Florida

Chris,

Anyone that throws out a price per square foot without seeing the building site, knowing the cost of the site and seeing the plans would not be my builder of choice. Most builders here have thier own draftsman who does their plans so that is part of our overall costs.

Assuming you have one plan picked out, your final price is determined when your purchase your lot. The building costs are the same but the lot costs, costs to clear the lot, how high the house has to be built up off the ground if it is in a flood zone and the manner in which you are obtaining water and sewer in addition to any other impact fees.

Then as to plan, you can take three different 2500 square foot homes and price them and the price differential could be tens of thousand of dollars.

For example, say

wrap around porches with 800 - 1500 additional square foot under the roof

6/12 pitch on roof as opposed to 10/12 pitch (more paper, more shingles, more roofing material and more expensive labor on a 10/12 pitch)

2 car or 3 car garage

These things affect your finished price as well as specifications. If you are going to get bids, get three bids from 3 builders and use the same set of specifications with details down to what type of flooring and windows and doors, etc to make sure you are comparing apples to apples.

Jan 16, 2009 10:38 AM

I totally agree with your comments and that's exactly why it's such a loaded question, one I would rather not answer whatsoever. Sometimes it's interesting to hear what our clients expect of us, as their agent. The ask for legal advice, construction expertise, sometimes even a marriage counselor!! LOL

Julie, thank you for the feedback, it's much appreciated.

Jan 16, 2009 10:44 AM

Steve Zarry

House Buying Now - Austin, TX

Austin Central Texas, Real Estate

It's now getting difficult for new home builders to compete with resale homes. There are plenty of quality resale homes out there at the $70-$90 sq ft range. I'm not sure if any new home builder could make money building homes at $75 sq ft in the present market.

Jan 16, 2009 12:34 PM

AGREED! And that's one of the key points I bring up with clients. In all likelihood the only real justification to build is that you want something totally unique and not available in the local market, OR maybe you already own a fantastic piece of land and you basis is nominal. Otherwise, I agree that there are plenty of existing homes to be had at a per unit cost below that of new construction. In fact I will often walk a client through a property and help them to identify what items they would change, then assign budgets to those changes. Even a mjaor remodel could end up being more financially feasible that new construction,

Just my thoughts, thank you for all of your feedback!

Jan 17, 2009 03:04 AM

David Gass ~ Huppin's/OneCall

Huppin's/OneCall - Spokane, WA

We do a good amount of construction loans here at STCU and in talking to the people buidling custom homes there is a very wide range in costs and many choices to make in the process. I agree that choosing a great builder that knows the area is very crucial. It is also a good idea to ask the builders you interview for references and ask the builder if there are any homes you may tour that they have built. Building a new home is very exciting, as is buying a new home. Take the steps to make a great choices and utilize true professionals to make it one of the best experiences of your life.

Chris we have a new Spokane Teachers Credit Union branch opening up near you soon. You should check it out! Great credit union to be a part of.

Jan 20, 2009 04:44 AM

What's it cost to build a new home?

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Chris Schreiber

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