You finished a new house in ’98. Your costs were x. Here we are 6 full years later. Off the top of your head, what annual increase would you apply to come up with today’s cost to duplicate house?
4% per year? 5? Less? More?
Discussion Forum
Discussion Forum
Up Next
Video Shorts
Featured Story
Upgrading the footings and columns that support a girder beam is an opportunity to level out the floor above.
Highlights
"I have learned so much thanks to the searchable articles on the FHB website. I can confidently say that I expect to be a life-long subscriber." - M.K.
Replies
I think I'd try to develop some sort of index. Compare from '98 and today... a 2x4, a sheet of plywood, a yard of concrete, an hour of labor, a per-fixture/per-box cost from a plumber/electrician... stuff like that. I'm sure it's well over 4% per year in most places.
The cost of living Index would be a good place to start.
The Bulk of the price of any thing is from Labor.
Stop and think about how much of a material cost is really labor.
Wood, stone, cement, vinyl, asphalt, insulation, hardware,etc is all just basic raw materials with alot of labor to get into a usable form.
Mr T
Happiness is a cold wet nose
Life is is never to busy to stop and pet the Doggies!!
index says 2-3%/annum.
Piffin says index is bad place to start. more like 6%/annum my guess.
bigger price forces come from energy costs and other marketiung factors along with overhead increases like insurance.
Evidence I bring to testimony -
labor increases might be only 3-4%
Lumber - remember the 19% tariff automatic increase?
- remember the doubling last year in sheet panel goods?
concrete going up drastically now due to energy costs. All shipped goods same.
Some places seeing 600% increase in insurance costs.
Let's not forget worker's comp. I stated policy in '91 at about 11%. it is up to 17 - 22% now.
Couple of things going down - like tools due to exporting the manufacturing of them to china and Mexico
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
The agenda behind the original question comes from this. I've a client that may want to build a copy of the house that can be "virtual" toured by going here: http://www.homebydesignshowhouse.com/3d.asp
Only do it if you have a high speed connection.
I got hold of the owners of this place, seen in the photos, and get an OK to bring my clients by for a tour, seeing as how the plans can be purchased. Well, I am here to tell you, we are all blown away. The place is magnificent. Pics do it no justice at all.
My folks ask the owners, privately, how much they spent to build, and the owner tells them the number, but the place was built in the 97'-'98 winter. Fixed price, not cost-plus. Plans and specs denoted everything, and the only change order was to add hidden gutters.
So I am about to have a follow up meeting, tomorrow am, and this "annual factor" will become, maybe, a central topic of our coversation.
Don't let it Gene!
Not if you value your sanity!
the whole cost thing is all over the map with some things going up by three digits and a few things remaining stable, not to mention the fact that some things that were used then are probably not even available now, having been replaced with next generation models.
This is worth discussing for point of interest between pros but to let this be part of a deciding facrtor with a customer is a dangerous thing to do. Budgetys and estimates have to be based on current costs, not assumed pro rata increases. It will burn you one way or another.
But as a matter of interest, there are two sources I know of that could answer it, roughly speaking. One would be Bob at the JLC estimating forum who comns in here sometimes, and the orther would be Walt Steppleworth, who doesn't give info away.
maybe somebody else here who has been really serious about job costing on similar work over all that time could give you a figure to keep to yourself when it comes up.
But the important thing is to keep pounding it into them that that was then and this is now and the construction industry has not followed trends in the rest of American business for the past several years, being more contrarian becauise of demand, low interest rates, and lack of skilled labour.
have fun
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
There is no way I am going there, into a discussion of how six-year-old figures, in a market outside my own, have any meaning in the discussion of how much this thing might go for now, here. For one thing, the "base" number, the one they heard, might be bogus for any number of reasons.
Of interest, though, might be this. As best as I am able, without the plans and specs, but now having seen the place for real, I have come up with a figure I have not shared with these clients yet. I made a lot of observations yesterday that enabled me to fine-tune my digits some more. Like counting all the ceiling cans, wallmounts, and anything else electrical. Like jotting down enough notes to come up with a pretty good window schedule. Seeing that the floor frames were done with 2x10s, when I had figured I-joists at almost twice the cost.
What I have, and I think it is conservative, gives me a number, that when applied against the one spoken yesterday, shows a 5.7 percent annual hike.
But, as I said, I am not going there with them. For all I know, tomorrow when we meet, they will trashcan the idea of building entirely, and plead with me to buy their lot. On the other hand, they might come by, all wild-eyed, and want to start ASAP, costs be damned.
The situation is more likely somewhere in between.
I won't be sharing my figure with them, ever. We are not even near that point, yet. At least I don't think so. We are in the first "paseo" of a long tango. It is probably best at this point for me to act like I haven't put pencil to paper yet, having no drawings, no hard info, and just talk in very general terms. Take my figure, pad it way up, and say it might just be in the neighborhood of $xxxx, but I will really need to get the documents, to work on it.
You got it. If they ever hear or even imagine that they heard a lower figure, they will try to hold you to it.
5.7 you say?
What did i guess? I think it as six or so?
Guess I'm not as dumb as I look
;)
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!