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Old 08-01-2012, 07:31 PM
 
96 posts, read 237,772 times
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Does anyone know why it costs more to build a home in certain areas than others? For example, my fiance's parents had their house custom built with a specialization in handicap things (i.e. more expensive) for a grand total of $150/sqft which seemed "pricy" for their area. $150/sqft is extremely unlikely in the Seattle area unless you're cheaping out. I looked into a few different architects and it ranged from $200/sqft for the cheap cookie cutter ones and $400 for the super-high-end ones. The average sweet spot seemed to be about $300/sqft.

Does anyone know why prices differ this much? I mean, materials can't possibly cost that much more here since a lot of building materials are locally available. What would explain the increase in building costs by area?
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Old 08-01-2012, 08:01 PM
 
Location: DFW - Coppell / Las Colinas
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Land costs, development costs, labor costs and the most important factor is what you put inside the house. There are your Mega builders who cut every corner possible and your true custom builder who does true custom finish work.

Why does a Lexus cost more than a Kia ? They are both just cars with 4 tires and a motor.

Here you can build a very nice home for $100/sf but I just sold a home at $205/sf. Huge difference in quality, the neighborhood & upgrades.

Edit: It also costs a whole lot more to build a 1 story home than a 2 story. Much more concrete, plumbing, roof, etc.
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Old 08-01-2012, 08:13 PM
 
Location: Salem, OR
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Out in the PNW it is the cost of land that drives up the cost a lot. We also have earthquake standards and clay soil which require reinforced foundations.
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Old 08-01-2012, 08:14 PM
 
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Actual costs of materials used to build can vary greatly just in one area.

Here is a good example.

2000 sq ft house.

by changing the regular bath tub to a whirlpool bath adds $4000 to the cost of the home. Just by adding that new tub adds $2.00 per sq ft. $4000 divided by 2000 sq ft.

Two story homes are less expensive to build than one story homes of equal square footage.

The more corners the footprint of the home has, the more money it costs to build. (Foundation).

Building a handicapped accessible house vs a non-handicapped house in the SAME AREA doesn't really effect the building costs that greatly.

When a person contracts a custom home with a builder, in pricing that home the builder will give allowances for items in the home such as kitchen cabinets, bathroom fixtures, flooring, etc. etc. etc.

Ever buy carpeting? There is a HUGE difference between contractor grade carpet (like you see in apartment rentals) versus something like Mohawk Smartstrand Carpet with a 10 lb frothed foam pad.

Even a simple two bowl stainless steel kitchen sink...they can look the same.. but one will be 200 and the other 450 because of the gauge of the stainless.

One huge, but often overlooked cost of building, is the builder's insurance which is calculated into his overhead in building a custom home. The variances per state are enormous!
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Old 08-01-2012, 08:43 PM
 
Location: Needham, MA
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Quote:
Originally Posted by Silverfall View Post
Out in the PNW it is the cost of land that drives up the cost a lot. We also have earthquake standards and clay soil which require reinforced foundations.
Land is a big factor in the cost here as well or rather a lack of land. There's very little (really none) developable land in the suburbs of Boston. The only way you can get a buildable lot is to buy an existing house and bulldoze it. In some towns, I've seen developers pay over $1M just for a single lot of land but more typically a buildable lot is $400-$750K.

To give an extreme example, John Henry principal owner of the Red Sox bought Frank McCourt's (former Dodgers owner) former home in Brookline, MA for $16M and proceeded to bulldoze it so that he could build some mega-mansion. I think that really drove up the cost/sf!
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Old 08-01-2012, 09:51 PM
 
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This makes much more sense now but what about when land isn't a factor.

For example, these quotes don't include the land. They assume I already own it. The quotes I gave for the friends who built their own also did not include the land.
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Old 08-02-2012, 06:43 AM
 
4,626 posts, read 7,200,374 times
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Quote:
Originally Posted by kreebby View Post
This makes much more sense now but what about when land isn't a factor.

For example, these quotes don't include the land. They assume I already own it. The quotes I gave for the friends who built their own also did not include the land.
That's why I used material costs.

Normally, with custom build the lot/land is already owned.

We were design/build. We owned no lots. Our clients had the land and wanted us to design/build their dream homes. Sone already had their plans and wanted us to bid.

The example of the tub was the easiest way for us to explain to a client how selection of materials would effect their building cost.

What about siding. Are we talking vinyl, cedar, brick, hardiplank? What about roofing material? Cedar shake, tile, or composition. 30 year warranty on the composition roof or 50 year?

Foundation, crawl space or slab?

HVAC systems? 13 Seer, 16 Seer or above?

Tankless hot water system versus a hot water tank?

Formica, Corian or granite countertops?

Even though land may be owned it could still need significant work -perk tests, grading, septic sytem versus existing sanitary sewer.

And let's not forget windows and doors! They aren't all created equal.

Last, but not least - trim details. To me it's always the icing on the cake.
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Old 08-02-2012, 07:02 AM
 
Location: Lexington, SC
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My last two homes were new builds (not custom) in small developmentrs with us being to select from 8 models, finishings, options, colors, etc. We did not go crazy but we did get jetted tub, screened porch, hardwood, and we went mid-level on most upgrades. Small 1/4 acre lots.

Our buy cost was about $110 per sq ft. Had we gone stripper, we could have gotten them for about $100 per sq ft.

One home we sold in the greater Boston area, the land value was over 1/2 the home sale value. Land value of our last two purchases (the new builds) here in SC was about 15%.
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Old 08-02-2012, 07:20 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
20,793 posts, read 37,464,612 times
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I have never heard of including land prices in "building-custom-home' and I have built many (all in PNW.)

There are many things to change costs, but the 'contractor' and finish materials are the biggies.

I have built most of mine for under $50/sf and all have been rural VIEW homesites, had wells, septic, LONG driveways = HIGH utility material costs (and ROCK at $1,000 for 22 yrd), basements, and stone fireplaces, and natural wood trim and doors (all very spendy). and LOTS of windows and insulation + earthquake ties and straps and HUGE foundations (we are required to have 4' wide footings !!!). I do quite a bit of the work (NOT SHEETROCK!!) and use 30yr+ warantee materials.

BEWARE - You spend about 50% of your costs (and 70% of time) AFTER sheetrock

I like to utilize much passive solar and creative ventilation / heating.

I REQUIRE all subs to sign a Microsoft PROJECT worksheet that specifies their window of opportunity. If they are LATE they suffer big time.

The secret $$ savings is to collect materials from excess (contractors that miss order or miss measure), and Habitat / Reconstruction, AND Craigslist / free cycle. Build a LARGE shop FIRST, and fill it up with treasures, THEN build / design as you go. Shop Home Depot for miss ordered / damaged goods. I got a 12'x12' Garage door for $121, regularly $782. and a WHOLE kitchen cabinet set that had been pushed off a truck with a forklift.

WINDOWS... good ones will set you back. Get 'excess' from places like Marvin and Anderson. I only wish we could get GREAT windows and plumbing fixtures like they have in Europe. But they are WAY too expensive for USA 'throw-away' houses. You want some good stuff if your house in gonna be in the family for a few centuries (as in much of Europe).

The very sad post-script...
I pay $40/day in Property Taxes on a house that was built for under $100k, but assessed near a million (now assessed under 500k, but taxes went UP. My taxes WERE <$3/day 10 yrs ago. (same joint, same improvements) Dirt (6 acre lot) cost me under $20k, taxed on $350k value JUST for the dirt (no improvements).

I try to build / remodel / design at least one rural view house / yr, just to stay in practice... Prices are really climbing on materials. I just have to SHOP harder.

Last edited by StealthRabbit; 08-02-2012 at 07:29 AM..
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Old 08-02-2012, 08:45 AM
 
Location: Salem, OR
13,741 posts, read 31,562,927 times
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Quote:
Originally Posted by StealthRabbit View Post
I have never heard of including land prices in "building-custom-home' and I have built many (all in PNW.)
Many contractors out here will carry the financing for a client. Often they own the lot and will sell it if you use them to build it. Construction loans are often hard to get.
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