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Hmmm, not sure I entirely agree with that. I think the dynamic is a lot more complicated than that. I think, as in most consumer product sales, there is a lot of putting out the product first and convincing the customer after.
There are high-end expensive open floor plan homes just like there are high-end expensive traditional plan homes, especially in larger sizes. I'm not convinced that the run-of-the-mill spec builder is purposely choosing to build a floor plan that is more expensive than a traditional alternative. There is interest in both kinds of houses as these pages and pages of forum posts can attest. Why not build the cheaper one? You probably are not the best business man if you choose otherwise.
No- the demand creates it with the market we have today. Just like granite, stainless steel, etc.. It's not cheaper to build with granite, but by gosh people want it regardless of functionality.
Builders don't congeal in a group and say "Hmm.. it's cheaper to build an open plan, so let's just build it and they will come". Doesn't work like that.
There is no other insidious force at work, it's all supply and demand. Right now there is a big push for 'craftsman homes' near town in Helena. Garage in the back, the whole 9 yards. It's what the near town (or wanna be in town) crowd wants. Keep it at the sweet spot on sale price and it will turn in 60-90 days. Outside of that- your guess is as good as mine.
A spec builder builds what they think the market will purchase. They are at risk for not selling their homes if they choose otherwise. Normally they have a marketing arm, be it a broker or in house specialist, that pours through plans or works with the builder in order to create something that will turn over in the market. That is a crucial part of their business. It's simple inventory turn-over. Business 101.
Trust me- I have financed hundreds of spec homes in my career, hundreds.
Quote:
Originally Posted by malltownKSgirl
One good thing about this forum is that people have a chance to hear both points of view. I wish I had read something like this before we bought our present home. I already knew I didn't like the look of the open floor plan, but I wasn't anticipating some of the other problems.
Indeed. You should buy what you want. I bought that colonial in NW WV and I hated it, and was ever so glad to dump it and break even when I moved to MT. The only reason I bought it was location, location, location because I knew I'd dump it as soon as I could. Now I am happy with my views and my home, out of suburban Hell and back to the country.
Negative. Builders don't create a demand, buyers do. It's not cheaper to build an open floor plan, in fact a lot of times it costs more for the cost to span the opening, trusses etc..
We built a home in 1999 which had a big country kitchen opening to a great room with a loft above and the cost was substantially more than a standard 'walled' version. The cost of the span beam alone was as much as all the appliances in the home. Factor in the crane to hoist it, plus all of my rafters were just that- rafter cut with birds eye notches and the whole nine yards. No trusses. Truly a craftsmans dream. I had a lot of compliments from the framer- he had to bring in a 70 year old semi-retired guy to build the rafters because no one did that anymore. Walled homes are truss and nail down walls, easy-peasy no calculating required.
No, an open floor plan is not usually cheaper. Not by a long shot. Sorry.
You're neglecting land costs. If a 1200 sq ft lot makes up $150K+ of the house price, building a small footprint multi-story house is far cheaper than spreading out across $300K of $450K worth of land to get the same interior square footage. It's the difference between a $600K 1500 sq ft (3 story) house and a $1M 1 story 1500 sq ft house. When each individual floor is only 500 sq ft, building it 'open' does not present much increase in cost. It makes it easier to heat and insulate however with no interior walls and only 500 sq ft of roof and floor.
'closing off' one of those 500 sq ft floors into an individual kitchen, dining and living room wouldn't cost much, but there's really no livability benefit from it either. When you're building on expensive land the cost of a few steel beams or custom wood trusses is trivial.
Quote:
Originally Posted by Threerun
Right now there is a big push for 'craftsman homes' near town in Helena. Garage in the back, the whole 9 yards.
Those houses never made sense after 1920. I'm surprised anyone is still building them. They were housing bubble builds out here that have thankfully disappeared.
You're neglecting land costs. If a 1200 sq ft lot makes up $150K+ of the house price, building a small footprint multi-story house is far cheaper than spreading out across $300K of $450K worth of land to get the same interior square footage. It's the difference between a $600K 1500 sq ft (3 story) house and a $1M 1 story 1500 sq ft house. When each individual floor is only 500 sq ft, building it 'open' does not present much increase in cost. It makes it easier to heat and insulate however with no interior walls and only 500 sq ft of roof and floor.
'closing off' one of those 500 sq ft floors into an individual kitchen, dining and living room wouldn't cost much, but there's really no livability benefit from it either. When you're building on expensive land the cost of a few steel beams or custom wood trusses is trivial.
Land cost sure does go into the equation, but one thing will hold true- they will build what the market demands, open or closed. Look at condo construction over the years.. Some closed rooms, some open plans- it's market driven. When you're dealing with that small of a building diameter sure- the cost for an open plan is diminished . However I will submit that a traditional lot, and a traditionally sized open home will have higher cost (certainly not cheaper) to engineer and construct. Walled homes have the advantage of load bearing walls, whereas open concepts generally rely on special trusses and beams. My required glue-lam beam was very, very pricey. Studs and drywall would have been far, far cheaper. Not to mention if I could have used manufactured trusses.
However I will submit that a traditional lot, and a traditionally sized open home will have higher cost (certainly not cheaper) to engineer and construct.
Traditional size lots are gone from the areas where most construction is taking place this decade.
Look at the overall statistics. Home building is way down, it's been down for a decade now. 'traditional' building is a quaint historical phenomenon.
A small portion of the market demands new houses, but they're not willing or able to pay the cost of traditional single story closed floor plan development. Nor does it make sense economically in areas where houses are being built.
Negative. Builders don't create a demand, buyers do. It's not cheaper to build an open floor plan, in fact a lot of times it costs more for the cost to span the opening, trusses etc..
We built a home in 1999 which had a big country kitchen opening to a great room with a loft above and the cost was substantially more than a standard 'walled' version. The cost of the span beam alone was as much as all the appliances in the home. Factor in the crane to hoist it, plus all of my rafters were just that- rafter cut with birds eye notches and the whole nine yards. No trusses. Truly a craftsmans dream. I had a lot of compliments from the framer- he had to bring in a 70 year old semi-retired guy to build the rafters because no one did that anymore. Walled homes are truss and nail down walls, easy-peasy no calculating required.
No, an open floor plan is not usually cheaper. Not by a long shot. Sorry.
You provided a poor example of your point, because of what I highlighted. Your example was a special case, and obviously isn't typical of new construction, if they had to bring in a specialist to build the rafters.
In a typical, small home, the trusses are likely to span from outside wall to outside wall, regardless of what's inside, (or maybe they'll need a column for a larger home) so why spend the extra $$$ to build interior walls?
Yeah, the cheapest homes in my area are basically one large gym-sized rectangle with some cabinets along the wall in one corner (designating the kitchen space), a lonely cheap pendant light dangling from the ceiling in another corner (designating the dining area), a gas fireplace insert in another corner creating a focal point for the living area and the 4th corner is sometimes open, and sometimes walled in as a "flex" space. All the bedrooms basically open off this one large room, so there's precious little privacy. I'm sure they're built this way to make the smaller houses appear large, but since most of them are so blocky & rectangular, I'm betting they are pretty cheap to build. Here's an example:
I personally think open floor plans don't just "appear" larger, they live larger too - meaning that when you can expand the space you are using to fit the activity, you have fewer limits on what you do. I can use my dining room with no leaves in the table for every day use, but when I have guests, I can add one leaf or both and comfortably seat twice as many people. I don't have to worry about walls, the space is already there. I prefer to keep the leaves out on a daily basis simply because through experience I have found that we end up letting the table become a clutter magnet when it's bigger. When it's in the smaller configuration, we have to clear it off every day to keep it functional.
As for land costs, that's a much more complicated calculation. Here in the mountain west in Denver, lots are small. But that is as much for water issues as it is for land. People don't want huge expanses of grass that they would have to pay thousands per year to keep watered. It does also end up meaning that housing density is pretty tight and the homes are close together, but that is not solely because builders can fit more houses onto the same size lot.
Traditional size lots are gone from the areas where most construction is taking place this decade.
Look at the overall statistics. Home building is way down, it's been down for a decade now. 'traditional' building is a quaint historical phenomenon.
A small portion of the market demands new houses, but they're not willing or able to pay the cost of traditional single story closed floor plan development. Nor does it make sense economically in areas where houses are being built.
90% of the homes I financed were on 1/3 to 1/4 acre lots or much larger, typically in Eastern Panhandle WV or northern Virginia (Winchester area). That is also the 'typical' sized lot around here. Size ranged from 1,800 sq. ft and over, and the period was prior to the bust. I do mainly C&I / business financing now, however I had a relationship back then with 4-5 builders, two of which had capacity to build over 50 homes per year. Small to mid-market builders.
It would be interesting to see a materials take off list and labor estimate for current designs. The predominant homestyle in WV/VA was a colonial or modified colonial, split level or ranch. The majority of those homes were closed designs- no great rooms. When an open plan was incorporated, usually there were custom trusses (or rafters) and other features that drove the cost up- exposed beams etc..
Jon: Know your market. Learn what new homes sell for and how long they take to sell. Learn what the buyers want and will pay for. Be ready to offer more for less. Learn the city’s requirements. Know your general contractor well, and watch closely. Know your competition. What are they doing? How can you do better? Have a contingency plan for if/when things go wrong. If you are an experienced rehabber, run the numbers for spec building vs. rehabbing. You might find it makes more sense to build than to rehab.
And a warning; spec builders are notorious for over extending. Be disciplined, focused, and continually manage your risk. When the housing cycle peaks, be ready to stop building and wait for the sweet spot in the next cycle.
Last edited by Threerun; 02-24-2015 at 11:15 AM..
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Are you kidding me? Marketing 101: Tell the people what they want.
