Average Home Requires 22 Subcontractors to Build

By
Real Estate Agent with Hart Real Estate Solutions RRE-BRO-LIC-24638

When faced with putting down 200k plus for a new single family home, some buyers may wonder if their builder is walking away with huge profits. Although the builder may very well be making a good profit on the home, many buyers forget the organization and costs required to subcontract out the work needed to build the best home possible—tasks best done by experts in a specific industry. Buyers want to know that their home has been wired, plumbed and floored with the best of them, but having that guarantee does come with a higher price tag.

Builder’s use of subcontractors is clearly as strong as ever. Now, according to the National Association of Home Builders, builders hire (on average) 22 subcontractors to build a new, single family home. Not only that, 70 percent of homebuilders use at least 11 and sometimes use up to 30 subcontractors on a given home.

16% use 0 to 10 subcontractors

36% use 11 – 20 subcontractors

34% use 21 to 30 contractors

9% use 31 to 40 subcontractors

4% use 41 to 50 subcontractors

2% use 51+ subcontractors

Even if a builder does not subcontract a job on a specific home, he may subcontract that task on the next one. Two thirds of builders said they generally subcontract 75% of the construction costs in a build.

So for homebuyers, remember that homes, like many human inventions, have a lot more subtlety and work put into them than what first appears to the untrained eye. Although home costs appear high, sometimes those profits are split among a wide group of people. It is up to the builder to determine how those profits are split and how much help he needs to build a quality home, while remaining competitive in the housing market.

 

Source: http://eyeonhousing.org/2015/09/it-takes-22-subcontractors-to-build-the-average-home/

http://www.nahbclassic.org/generic.aspx?sectionID=734&genericContentID=247385&channelID=311&_ga=1.172104608.2035328351.1438375934

 

 

Comments (2)

Stefan Winter
Real Estate in IL & NV | Owner of Real Estate Web Tech | Daily Vlogger - Las Vegas, NV
Owner - Winter Group & Real Estate Web Tech

Very well said, some people do not realize how many trades it takes to put a house togehter.

Have a great week!

Sep 17, 2015 04:42 AM
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Lend Smart Mortgage, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

Tim Hart That number is astounding! When I built homes, I only used  two subs besides my crew; WOW!~

Sep 17, 2015 07:20 AM