Welcome to “At Home With Tom and Sandy.” As I always like to say, “sit back, relax and enjoy.” Several months ago, Tom and I began to introduce you to our community/industry partners so you can get to know them better, and what fun that has been. You have met Steve Simpson of Blue Line Designs; Jim Reed of Reed Brothers Construction; Christie Board, our local certified kitchen & bath designer with Board By Board Design; Tom Liuzzo, a registered land surveyor for Granite Basin Engineering; and, most recently, John Bassous of Tierra Verde Builders. Thanks so much for taking the time to get to know your community partners. Hope you enjoy our column this month.
Sandy: Hey Tom, fall is here and the weather is now becoming splendiferous.
Tom: My favorite time of year, without a doubt.
Sandy: So, I have a question for you, Mr. Architect and Contractor. I have been getting a mountain of calls from folks wanting to know the cost per square foot to build a home. Some have no plans but have a lot, some have no plans or lot. I am sure you get these calls, too. How do you answer them?
Tom: Well, there is not a quick, succinct answer to that, Sandy, and yes, we have noticed the volume of calls going up as well asking this same question.
Sandy: Tom, let’s have a starting point for our readers to help them better understand why there is no exact cost per square foot to build.
Tom: Agreed. It’s kind of like asking how much does a car cost!
Sandy: Tom, it depends on the car, of course.
Tom: Exactly. There needs to be some planning before any kind of budget can be established.
Sandy: I suspect some people are just trying to figure out if they should build or buy. Either way, they need to have a number/budget in mind.
Tom: There are a lot of ways to get some notion as to what someone will need to spend to get what they want.
Sandy: Let’s give our readers some of those pointers. The more informed people are, the better it is for everyone.
Tom: OK. If you know the neighborhood you want to live in, look for homes recently constructed and ask the builder what home costs are in that area. The actual cost of construction for any home is not public knowledge.
Sandy: The permit valuation, while not based on the contract amount, might give people some information as well.
Tom: Yes, some idea, but as you know, they are not that accurate.
Sandy: Realtors can play a part in helping with establishing a budget also. They sell both new homes as well as preowned.
Tom: Perfect. That was going to be my next go-to helpful person. Folks need to remember, though, that without a lot and no plans, any numbers you get may be way off of what their reality might be.
Sandy: I agree, and am a huge proponent of planning. People need to get with an architect or home designer to establish a basic design that can help focus probable construction costs.
Tom: Exactly. The more info you have, the more accurate the pricing will be.
Sandy: I am asked about web-based home pricing tools like Zillow. Do you find these to be accurate?
Tom: Well, yes and no. Zillow gives us a likely value of an existing home based on algorithms that I am not smart enough to understand. Bottom line is, while helpful with existing homes, new construction is often more expensive.
Sandy: So, if my home is next to a vacant lot and my home was built three years ago, the value of my home is not a good indicator of what it would cost to build a new home on the vacant lot. Is that the point you are making?
Tom: Yes, exactly. Not always, but a good rule of thumb has been that you can buy an existing home for a little less than the cost for a new build.
Sandy: Does that include the inevitable remodel?
Tom: No, of course not. But not all older homes are candidates for remodels.
Sandy: True. So let’s bring this subject to a recap. Home construction costs vary widely based on the home’s size, design and materials used to construct it.
Tom: Yes, and the more planning folks do, the more accurate the pricing model.
Sandy: Tom, with everything you have said, here is my takeaway. With the rising prices of construction materials, especially lumber, the cost to build a home is based on a number of factors and can certainly be higher than what one would consider selling his or her home for. There is no standard cost per square foot amount and there are many key factors that have an impact on what it would cost to build a home.
Tom: Sandy, you are a quick study. Costs to build a home often differ from market values, because of mortgage requirements, tax assessments and real estate appraisals and, of course, current building codes, current labor and, as you said, Sandy, material costs.
Sandy: Tom, you love math. Give our readers the math answer as to why there is no exact square foot price to build a home.
Tom: Square foot pricing is a ratio of the total cost of the project’s components divided by the size of the livable portion of a house, in most instances. Since the components that make up a project can be so different from project to project, it is impossible to predict a price per square foot with any accuracy.
Sandy: What’s the most expensive part of building a house?
Tom: The most expensive part of building a home is usually finishing the interior. Depending on the level of finishes an owner wants, they can spend about one-third of their budget on flooring, appliances, cabinets and other high-end touches.
Sandy: Tom, considering project components, there are many factors that will influence the cost per square foot. Some of the components to be considered are: permitting fees, utilities, design fees, the location of the home, building materials and products selected, the major systems such as plumbing, electrical and HVAC, the size and type of systems will certainly affect the price, the electrical components such as smart-home devices and how you want your home to be wired. Do you want traditional systems or do you want valued engineering systems? The foundation is a huge component. There are excavation costs, fill and soils reports. The interior finishes are also a critical component to costs, such as countertop material, fireplace, windows, doors, roof material. All of these items and more add to the cost per square foot to build a home.
Sandy: Great information, Tom, and thanks for being our wise sage in the building arena. You are indeed a valued partner.
Together, Tom and I say, “Happy Fall to you.” Until next month, thanks for stopping in to read At Home With Tom and Sandy. QCBN
Tom Reilly, LEED Accredited Professional, Architect, Contractor, Renovations
Sandy Griffis, Executive Director, Yavapai County Contractors Association
Remember to tune in to YCCA’s Hammer Time every Saturday and Sunday morning 7 a.m. on KQNA 1130 am/99.9 fm/95/5fm or the web kqna.com. Listen to Sandy and Mike talk about the construction industry and meet your local community partners. Hammer Time is a great way to start your weekend.