What’s the difference be/t 50 and 100?
50, but what is it comprised of? The houses I design have been costing anywhere between $75/sf and $100/sf….that’s not how they were bid, but just the calculation made once the builder did his/her estimate. In my area, custom frame housing is $100/sf give or take. But I’m regularly accosted by people saying…in East Texas, I can get one built on a lot with septic and driveway for $50/sf. And my bil in FL just had a tract house built in FL for $50/sf and it included land. So how to explain the difference?
What are the things that account for the differences? Are the tract house builders cutting corners to make those prices to take advantage of a budget-bound client? Or are the custom builders padding the prices for a gullible consumer?
What are the differences between a $50/sf house (with land and septic) and a $100/sf house? (And I’m open to as much detail as possible be/c I can’t easily account for the gap.) Does the one use fewer or thinner nails? No glue? Cheaper concrete in the footers? 1/2 instead of 5/8 rock? How does that extra 50 breakdown?
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When they say "Including land", there sure could be a lot of difference there. Lots around here start at $10,000. But in some areas I've heard they go for well over $100,000. Divide that $90,000 difference over an 1,800 square foot home and you've got a $50 per square foot difference.
I won't rise to the occaasion, but I'll slide over to it.
The $100 prices here do not include land. So that means there's even more discrepancy, be/c the lower price includes land and some improvements.
Seems to me the local economy is the biggest factor.
I'd start with labor rates. If I were to build a house in Council Idaho, where my parents used to live, labor would be really cheap. It's a depressed area economically, and the contractors there are just scraping by hoping things will get better.
On the other side of the state, where I live, contractors can't keep up, and can't even find enough unskilled labor, much less skilled labor, so they can charge more. I'm sure this adds signifigantly to the cost per sq. ft..
Some of it may be market markups. Some friends built an approx. 1400 sq. ft. house here about 3 years ago. They did much of the construction and it cost them around $80K. So it cost them about $58/ sq. ft. Don't know what the land cost, now it'd cost about 35-40K. Then probably 20K. They sold the house for $105K. It's on the market again for $120K. Basic house, cheaper cabinets, carpet, basic MDF trimwork, small kitchen, 2 baths, small 2 car garage. Everything nice and functional, but no high end anything anywhere.
We've all seen real estate prices jump in a given area. What contractor is gonna sell a house that costs him $80K to build for 100K if similar houses in that area are selling for 150K? 30 miles down the road getting a house built is much cheaper, small town with a depressed economy. Land's cheaper, and the market's depressed.
Then the most obvious of all, how much material costs were shaved. Cheap windows, doors, locks, faucets, counters, carpet, paint, siding, ect.. Do you put in $1/Sq. Ft. carpeting, $5/Sq., or $12/Sq. for nice wood floors? $3000 for kitchen cabinets, or $15,000 for kitchen cabinets?
If it wouldn't waste their time, I'd love to take a detailed set of house plans and get a quote for cost to build here, and then the cost to build the same house 30 miles from here. From the difference in housing prices in those 2 areas, I'd bet it'd be signifigantly cheaper 30 miles from here.
>If it wouldn't waste their time
I agree...that'd be enlightening. Could find out if it's cheaper materials everywhere, or lower markup, or production building techniques (profit through volume), or all of the above and more.
Taking your friend as an example, they built for 58 exclusive of land and they incurred little contractor markup/profit. So how are people building house after house for 50 including land when they need to account for profit? It befuddles me.
I wonder if cars are an analogy. You can buy a Yugo or a Mercedes, and they both get you there. But some of the price difference is materials, some is perception of quality, some is...
The one thing I do know is to not have this discussion with my bil, be/c he'll defend the quality of his house to the death (my death) and never understand why someone would pay 100/sf for a house when he perceives he got just as good for half that. I don't blame hime for that attitude, either, be/c there's no point in knocking a man's choice of residence. Just wish I had a better handle on the real differences between one end of the spectrum and the other, especially when people come to me expecting the quality and features of the one for the price of the other.
Well, there total included land, and a wood privacy fence around a .33 acre lot..
Probably not a fair comparison because, they built it in a government program. 8 houses being built at once. Owners do most of the building, while being supervised by a contractor. Contractor supplies all materials and tools. They do most of the grunt work. Concrete, plumbing, electric, drywall finishing, HVAC, and other things being done by pros.
So, the materials were cheaper then if they'd bought them themselves. They spent zero on tools, ect..
Frankly, I can't see where you could build much of a house for $50/ft.. Of course, if you only put in one bathroom, skip the air conditioning, use the cheapest light fixtures, carpet, ect.. It's probably possible. If you salvage used materials it's definately possible, but only if your building yourself and the time isn't as important. One guy I knew drove to a manufacturer scratch and dent yard (never did say where) and got all his doors and windows there, then designed them into the house. Claimed that 2 days of driving saved him $8,000 on doors and windows. Never saw the house, but he claimed it looked great.
I just crashed the Prospero system with my pross so lets see if I can do it again.
"In my area, custom frame housing is $100/sf give or take. But I'm regularly accosted by people saying...in East Texas, I can get one built on a lot with septic and driveway for $50/sf. And my bil in FL just had a tract house built in FL for $50/sf and it included land. So how to explain the difference?"
STOP! RIGHT HERE!
YOU HAVE BEEN FOUND GUILTY OF REGONIAL HOUSE COMPARISONS. YOU ARE HERE BY PROHIBITED FROM POSTING FOR 30 DAYS.
Seriously you have been around these forums long enough to see the wide range in construction cost around the country. So any comparison to cost an an other area is MEANGINLESS.
All of that said and making comparisons in the SAME AREA the track builder will have some advance. They will get better deals on materials that they buy all of the time. And they build the same plans time after time so that there is no head scratching about how to solve a problem while everyone stands around. And if a delay in material deliver or the inspector the job does not shut down for the day, but just moves over the the next house.
I am not in the business and don't know, but that might be 15-25% of the differenence.
But the BIG difference is in the finished materials. Now there might be some small differnces in the hidden materials; like 1 1/8" sub-floor on 16" spaced joist vs 3/4 on 19.2 spaced, but that is a small difference.
Look at the finished surfaces
Architectual or wood or tile roofings vs 15 yr 3 tab
Brick, stuco, or real wood siding vs minimum thickness vynal
Granite counter tops vs laminate
High end appliances vs "kmart specials".
>so any comparison to cost an an other area is MEANGINLESS.
I can limit it to the same area...just a few miles apart...and use the same numbers. One builder I work with had a client choke on $70/sf complete while his wife is building nothing less that $135/sf in a nearby development. They use the same suppliers of steel, lumber, concrete, etc. Some of it's setting expectations for the client. The guy pointed to friends who got 2000 sf for 100k. Don't know how to engage in that kind of discussion without falling back on a vague "we do better quality, have better energy use, are stronger" which obviously wasn't worth 14k to him.
[and again, the $/sf numbers aren't the way the job is bid; it's just the math after the fact.]
I can partially answer my own question by looking at the Means Residential Cost Data. The national average is about $50 dif between Economy and Custom, with Luxury way beyond that. The only way they describe the difference is "Materials and workmanship are sufficient to meet code" versus "Materials and workmanship are above average." I can spot differences when analyzing the detailed breakdown. Seems to be a cumulative effect: slightly more on framing, slightly better shingles, a bunch more markup, a bit more of this and that. Hard to explain that to prospective clients. Maybe I just have to become more willing to say, "I don't think that a custom designed and built house is the right thing for you," and turn them away.
Still interested in other perspectives.
"I don't think that a custom designed and built house is the right thing for you," and turn them away."
believe that at some point this is the case.
but (the ever present but)
maybe a little education package by you will help.
kind of "white paper" (wish i could think of proper term) that expalins the diffrence with references to means etc.
help set customer expectations, from the beginning.bobl Volo Non Voleo
The guy pointed to friends who got 2000 sf for 100k. Don't know how to engage in that kind of discussion
The simple answer is... Don't.
Tell him to go hire the contractor that did the job for the friends.
You don't have to defend the truth. Tell hm that you use good materials. That your work is well engineered. That you do a good job. And that your work will last a good long time without troubles. That's all you have to say. Don't try to defend the statement with all kinds of statistics, numbers, etc... He can stay, or he can go. There will be other ducks on the pond.
A good heart embiggins even the smallest person.
Quittin' Time
Housing around here can run from $45 sqr ft to well over $200...
If you don't count land cost (and for the sake of comparison, I don't think it should be counted), the major differences in cost that I see are utility cost (tap fees, well drilling, trenching, etc.) and the biggest one: finishes.
One bath tub can be as little as $300 or so with shower walls included in one piece. OR you can buy a drop in tub for $2500, add cost of building frame for it and tiling frame and walls, could easily add up to $4000 or more.
Flooring might run from less than $2 sqr ft to more than $10...
Wide free span rooms always cost a lot more: price out a floor system with 2x10 on a bearing wall, then price out clear span of 24' with 24" high engineered wood joists. YOW!
Countertops: granite or formica?
Windows... Doors... It goes on and on!
I'm just pricing out all the things I can't afford to put in our new home, so I'm very aware of these huge differences in price right now. At least I can afford to do a very good job on the labor end (two teenage sons!).
Yesterday I priced out the floor system. Just for the engineered joists the cost spread is between $3,900 and over $7,000, depending on what you want. Boss has said that 24" on center and 24" high joists will likely be best as far as lessening floor vibration. And everything I've been able to find says he's correct! BUT, for a couple heading for retirement, building a home for just the two of them to live in, is it worth an extra $4,000 for beefier joists (don't forget to add the extra $4,000 in interest on the loan!). I'm afraid many of you will say that my choice isn't "Fine Homebuilding", but the lesser choice is well over code requirements and saves us $8,000 over the long run...
OK, so I got off track again.
EDIT: and the more expensive floor system won't add anything to the appraised value!
Any jackass can kick down a barn, but it takes a carpenter to build one.
Edited 7/17/2003 1:05:08 PM ET by Hasbeen
For the high end it's better quality materials and options.
The low end it's the cheaper materials and lower labor rates.
Avg for a good quality Log home is about 175 / 250. The cost increase going to the log / timber construction portion. A faux log can go between 125/150. A tract style, same land, 50/65. Modular - 30/45.
A house that just turn keyed in June was at 790$, 3 room, loft, basement - 9400' house, attached oversized 3 car garage and it is beautiful. It belongs there. There are many here that exceed 500.
Low end most often icludes land and high end doesn't.
Edited 7/17/2003 3:42:24 PM ET by IMERC
That, and the prior responses, have been helpful. Thanks!
Any other perspectives welcome...
If you want to reach the customer, then more conversation would seem to be the key. Just because Cousin Bubba put a repo'ed double-wide on 6 acres outside of Buda for $45 per foot does not mean that a suctom house in Williamson County will only be $5-6 per sf more. Ok, "we" all get that. maybe you need to compare it to cars. A Kia will be less than a Mazda; a white off-the-lot Geo will be about the same price no matter where you shop--but no one would expect a customized Navigator to be the same price at all.
So the trick might be in convincing the customer that the end product is as different as a Yugo is to limo.
Or not, if I knew for sure, I'd be a lot richer (I think).
Here, in B/CS, bare bones, entry-level, minimal finish starter/rental houses are sunning $45-50 per foot; semi-custom around $75, and full custom around $90-120.
It is interesting to me how people, myself included, form opinions based on nothing but hopes and rumors. I can't remember who started the thread here before on perceptions. The customers think that your dome is a great idea because of all the extra value and uniqueness, but they only budget for a "regular house". I would love to own a lot of things that will never be within reach, so I know the feeling, but they still want! As gently as possible, explain the reasons that they want your style of housing, and then explain that it will cost more. Not to be mean, but if they can't afford to have, they better get used to settling for the home that they are comparing it to.
A favorite story of mine happened in Seattle while selling Real Estate. Presented offer to homeowner, on a very unique type of house, in not so good area. I was proud that we got within about 2% of list price. He tells me that he had rejected a better offer last week. I told him that I thought that he had made a mistake, and if he wanted me to, I will leave now, sorry for wasting your time. He took it, closed easy, every body happy. He just needed to hear, that this is facts.
Some customers only know what they want to, and aren't sure of that. Regional differences in material cost, Labor cost, and Land cost all mess with pricing. When confined to one area, you still have neighborhoood desirability, builder reputation, and the good ole level of finish arguement.
Good Subject, please keep it going
Dan
Something else that's been posted here before is the huge difference in permits and fees required.
Some areas you may have to give the local government $10,000 more to build a house then in other areas. There's a $5/ft jump on a 2000 sq. ft. house right up front. And, that $5 doesn't contribute 1 cent to the actual building of the house.
Just a thought.