What should construction cost per square foot?

Nothing of interest to report on real estate news today – 17 price changes that still leave the properties in question over-priced, an equal number of new listings just as uninspiring, so no comment on either.

But I’m working with a client who is either going to find what he likes or build new and, to assist him in the latter effort, should it come to that, I’ve been calling around to see what a realistic price for new construction should be in this market. The answer is, a lot less than you’re being quoted. Try $115 p.s.ft. for run of the mill, basic construction, $250 for great stuff and $350 for over-the-top, sperm whale-foreskin leather-covered walls and field stone exteriors. Yes, there are builders charging twice that and more, but if you agree to pay them what they demand, you’re a chump.

This ought to give you an idea on valuing existing houses, too.

28 Comments

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28 responses to “What should construction cost per square foot?

  1. Dan

    Wow – that’s interesting. Now, are those figures all-in or just hard costs?

  2. Stanwich

    Holy shit, this is way down from pricing just two years ago. Makes you feel ok about those builders/developers who are getting crushed right now. They can’t pig out at the trough forever.

  3. Anon E. Moose

    “whale-foreskin leather-covered walls” Touche! Nearly pissed myself. Might that be Soft, Corinthian whale-foreskin leather?

  4. Lars Toomre

    Chris,

    The other significant part of building a home vis-a-vis buying is what the land is worth. Any idea of what an average parcel of land meeting that zone’s acerage requirements should go for in this environment?

    A well constructed 5,000 sq foot home (at about $250 per sqft) should cost about $1.8 million, perhaps???

    Lars

    • christopherfountain

      Land varies, of course. Riverside waterfront: $4.5 million per lot? More? (there’s a 2.5 acre lot, yet unsold, on Pilot Rock asking $12 million and will probably go for close to $10). Mid-country – $1.75 – $2.75 per two-acre lot. Back Country, $750,000 per acre per 4-acre lot? Basic Riverside or Old Greenwich (SoPo) lot, $950,000. NoPo, what? $550,000? I suspect that’s high, these days. Cos Cob, maybe $350 – $450.
      But you do have to figure in site development costs, which are huge – $1 million? More? for direct waterfront, much less for run-of-the mill inland stuff, but still costly. Yu could, if you cared to, spend a million on landscaping, too.
      But for the house itself, the numbers I gave seem to be what is going on.

  5. Anonymous

    CF:

    Your survey looks good. As a data point, my in-laws just built a fancy 8,000 sq ft. home in Bergen County, NJ., paid approx. $200 / sq ft.

  6. Larry

    $150…..impossible
    $250…..pre-fab….. maybe
    $350…..chinzing, low end plans, no landscaping,
    $450…..very solid
    $550…..everything you want

  7. Anonymous

    Surprised how low are build costs
    Makes pricing of used, obsolete houses (usu on crappy land anyway) seem even more absurd

  8. Anonymous

    This is pretty much what CF has been saying through the years. The physical home depreciates, it’s the land that appreciates.

  9. Anonymous

    I guess it depends on the buyer….budget low, willing to accept low quality construction. Budget high, will expect very high end. Also depends how patient they are. High end could take 2 years, including time for plans

  10. Pan

    Chris,

    Of course you are correct on your numbers, though I think you can push them down another 10% to 15%.

    Real estate, especially the high end, is beginning to get hit with a second tsunami of foreclosures, short sales, etc., that will lower prices even further. Just my feeling out here in the real estate trenches.

  11. MTA

    You have to be careful when quoting costs per square foot. EVERYBODY has a different definition of what should be included in the “construction cost” which is why you get such large variation in your answers.

    Pre-fab @ 60$ per square foot would be incredibly poor construction and I am sure would not include foundation, excavation, job foreman, etc.

    • christopherfountain

      No – does not include foundation work – estimate $100,000 for that, on the high end. But quality of finish is quite good.

  12. Anonymous

    Not sure if land necessarily appreciates: BelleHaven waterfront land has depreciated in recent yrs, now trading at ?’00 prices and doubt we know when it will bottom in this cycle

    Construction takes time but so does searching, diligencing, negotiating and poss renovating/repairing a used house

  13. foobar

    I renovated a local 2 family in a prime downtown location a few years ago. Absolutely no expense spared. Took it down to the studs, then rebuilt. Paid GC his 20%. All costs a la carte. Two top drawer kitchens, fabulous bathrooms.

    Cost $250 per square foot. BUT and I cannot stress this, I stayed on top of EVERYTHING every step of the way. If I had had to build new it probably would have added $50-100 per.

    Using that rule, let’s say Chris’ $3 mm for a back country 4 acre lot, plus $350 per foot for new construction, a nice 6,000 foot house should run you about 5 million. Which is about what the market indicates these days.

  14. foobar

    I should add that CF is totally correct, prefab starts at 60 bucks but you need to add at least a little for site development and don’t forget the land cost. Also don’t forget you will invariably spend at least a little extra to finish the interior, budget dependent oc.

  15. foobar

    One of the things I think is fair to keep in mind is that there is no free lunch, if a builder has built a superior product on spec and wants to get paid a premium then he will get whatever the market will bear. I consider it to be perfectly fair for a builder to buy a $1 million house, fix it for 500G and sell it for 2MM if the market demands it. All power to him/her. Think of what the builder on Alpine is currently going to try to pull off.

    If you have contracted with a GC like I did and let him/her hide the costs and charge you a flat total gross, instead of (as I did) a 20% override on the project cost, you risk being taken to the cleaners.

  16. Retired IB'er

    So much does size drive the numbers. Do your ranges work as well at 3,000 sq. ft., 5,000 sq. ft. or 10,000 sq. ft.?

    Presumably the bigger the house the lower per foot cost (you only need one kitchen which is a high per sq ft coster).

  17. InfoDiva

    Anon 5:51, think again. “Used, obsolete houses” are often on the best property, because that’s the land that is developed first. It’s the later stuff that gets shoehorned onto marginal lots.

  18. Priapus

    It’s a good thing you all have never done this remodel/building in Northern California…between the permitting, and the nonsense, it’s 550/sqft minimum (not making that up) and goes to 1000/sqft (altho i know someone that paid 1200/sqft for a ridiculous place). The east coast is so much cheaper, and who’da thunk it?

  19. whatever

    foobar,

    you opted for the cost plus model?

  20. Just the Facts!

    MTA, Don’t be so quick to negatively judge pre-fab. The modular industry has gone to great lengths to upgrade their quality standards over the years. Not to mention, I’d rather have basic framing, wiring and plumbing completed in the warm, cozy confines of a temperature and weather regulated environment…rather than 15″ inches of snow in the dead of winter or a Spring/Fall downpour saturating the framing skeleton. Also, on average modern modular designs require 30% more lumber to endure the long haul over our interstate highway system. So for the money, it’s a terrific value with much better quality standards than local builders can provide. And you don’t have to deal with those pesky local building officials flagging your projects every chance they get since the modular engineers obtain building approvals before it leaves the factory. This will be the future of the industry going forward….especially custom design modular services.

  21. foobar

    yes to answer the question of cost plus. only way I would ever do it.

  22. Judy

    Chris, How do your numbers account for below grade space and garages? I know that in North Shore Chicago, a house quoted at 8,000 sq.ft. will be 8,000 on the 1st and 2nd levels, but can have another 4,000 in the basement, most of which can be finished. However, the 8,000 does include garages. Construction costs for a very nice house would run $225-250/sq. ft. times 8,000, plus the lot.

  23. Stacy O

    Hi Chris, In all of your postings & listings, I cannot find the names of any architects. Can you recommend any local architects? We are adding about 1000 sq feet to single family home in Cos Cob for basic renovation (master bath/bed on top floor and expanded kitchen/family room on bottom floor). I received one estimate for just the architecture plans at $20,000! Is that the going rate?? So any names you can pass on would be appreciated. Thanks.