In the current real estate environment, many are staying in their homes with a lock-in effect of lower interest rates, so there are fewer existing homes on the market. As an alternative, you may find some new home builders offering completed homes for sale, or you may think it’s time to hire a builder and build your own home. It can be more complex than many realize, and the costs to build can vary significantly.
There are many factors that go into the cost of a newly built home and these can differ from state to state, town to town, even on lot to lot. The costs are based on code requirements, land and site prep costs, labor and material/supplies availability and costs, the design and materials of the actual home including the fixtures and finishes, plus a host of other details.
In addition to the higher costs for a larger home, the quality of the features and finishes drives the cost up or down. Standard features and finishes will be less expensive than custom ones. If the builder offers standard kitchen cabinets in several materials and colors but you choose ones that are custom, it will not only take longer for the cabinets to be built and delivered but it will also cost more than the standard ones offered. If a custom feature requires a specialized skill set for installation that would not typically be available on the job site, that will also increase the time and cost of the construction.
The location of the home also affects the costs. This is due to different code requirements in different municipalities and also due to land costs and site prep. For example it can be less expensive in southern states due to less insulation requirements and lower snow loads on roof structures. Coastal locations, where the local building codes, techniques and/or practices recognize the impact of meteorological effects due to the proximity of the ocean, often increases the cost of preparation for a home build and the materials required for the home. Site prep can vary lot to lot, depending upon the conditions of the lot—slope of site, type of soil, accessibility to utilities, etc. In very exclusive areas, where builders can and will charge more, will see higher building costs.
According to the article, How Much Does It Cost to Build a House?, some of the ways to save on new home costs are to build a smaller home or to select lower quality finishes, such as mid-market finishes instead of luxury ones. The base costs range from $200/sq ft to well over $400/sq ft depending upon the features and finishes. That is a base cost. The prices go up exponentially from there.
There are other advantages to purchasing an existing or newly built home. The most basic differences are: An existing home typically takes less time to purchase and move into than the time it takes to build a new home. A new build can be customized to the extent that the homeowner wants to pay for customization.
Regardless of the quality of finishes or where the building is located, e2Value keeps up with changes in costs to provide fast, cost-effective and accurate replacement cost valuations. We work from the Florida Keys to the Arctic Circle, Newfoundland to Alaska. We value structures ranging from Park Model manufactured homes, regular manufactured homes, log cabins, cottages on a lake, suburban homes, the world’s most luxurious and famous homes, retail office space, barns, silos and even scales in a grain bin. Contact us for more information about our estimator tools.