What’s In A Number?
The Myth of Cost Per Square Foot: Why It’s a Starting Point, Not a Final Number
The Allure of Simplicity
I was on a chair lift with a friend recently talking about building. He asked me how much it costs to build a house these days. This happens so often and it’s such an awkward moment because saying “it depends” isn’t exactly a real answer. That’s where cost per square foot comes in. It’s a simple, easily digestible metric that gives a very rough idea of potential costs. So my response lately has been, “In this area, we’re seeing prices range from $350 to $700 per square foot.”
My buddy was stunned, “How can it swing that wildly?” I went on to explain that if you want a low quality, no frills home you might be at the low end of that range. That’s the spec. builder’s target in the Salida market. If you want a nicely appointed, high quality house you’ll be at the high end of the range. The process to understand where you’ll land on that spectrum is based on your builder getting to know you quickly from the beginning.
The Problem with Simplicity
The simplicity of a cost per square foot metric is its biggest downfall. Cost per square foot is a highly generalized number that doesn’t account for the countless variables that influence the actual cost of your dream home. It’s like saying all cars cost $30,000. Yep, some basic models might fall within that range, but a luxury car or a big pickup will be on a different level.
Here are some key factors that cost per square foot struggles to capture:
Design Complexity: A simple, rectangular house is far less expensive to build than a home with complex angles, multiple gables, or curved walls. These architectural details add labor and material costs that aren’t reflected in a simple square footage calculation.
Overall Room Count: Two houses of the same size and shape but one with three baths and the other has four will have different costs.
Material Choices: The difference between no frills, spec building grade materials and high-end finishes can drastically impact the price. Think about the difference between laminate countertops and granite, or standard carpet and hardwood flooring. These choices significantly influence the overall cost but are completely ignored by a simple cost-per-square-foot estimate.
Customization: This is where the “custom” in custom home really matters. Unique features like custom cabinetry, intricate tile work, smart home technology, or specialized systems like home theaters all add costs that aren’t accounted for in a basic cost-per-square-foot number.
What’s Outside
Cost per square foot does a very poor job of incorporating the overall building site. Some builders explain that it is outside the cost per square foot estimate, others include it and their cost per square foot is correspondingly higher.
Utility Connections: A house built in town with plug-and-play electric, water and sewer is not the same as a rural lot that needs a power feed, well and septic system. A house that needs solar panels and is off-grid is even more specialized.
Site Conditions: The land you build on plays a huge role. Is the lot flat and easily accessible, or does it require extensive excavation, retaining walls, or specialized foundation work?
Hardscaping and Landscaping: This area is often overlooked, even by professional builders with a solid preconstruction process. The extent of hardscaping needed to tie the house into the lot or land can be a very large number, depending on a coverage area, complexity and material choices. Landscaping cost can rival interior design costs for projects where the outdoor space is as valuable to the owner as the interior.
Only a Conversation Starter
So, what’s the point of cost per square foot if it’s so inaccurate? It’s a starting point for a conversation. It helps establish a general range and allows builders and homeowners to begin discussing budget expectations. It’s a way to quickly illustrate the impact of size on cost.
Here’s the crucial takeaway: any builder who gives you a square foot cost as a single number should be suspect. There is a huge range and the builder needs to understand you and your dreams to even blurt out a cost. The absolute worst thing and one you should run away from immediately is the builder who is willing to give you a firm price based solely on cost per square foot. A reputable builder will insist on understanding your specific needs, reviewing detailed plans and specifications, and conducting a thorough site analysis before providing any kind of cost figure that would be referred to as a budget.
The Path to a Successful Project
All these reasons are why we keep coming back to the need for a detailed preconstruction path as crucial for a successful custom home project. This involves:
Detailed Design and Specifications: This is where your vision comes to life on paper. Detailed plans and specifications are essential for accurate cost estimation.
Thorough Site Analysis: Understanding the unique characteristics of your building site is crucial for identifying potential challenges and costs.
Detailed Cost Breakdown: A reputable builder will provide a comprehensive cost breakdown that accounts for all aspects of the project, not just a simple cost per square foot.
In conclusion, cost per square foot is a useful starting point for discussions, but it should never be the sole basis for budgeting a custom home. Don’t fall for the trap of oversimplified pricing. Choose a builder who prioritizes transparency, thorough planning, and open communication. This will ensure a smoother, more predictable, and ultimately more successful building experience. Finally, understand that price per square foot should always be a range, never a hard and fast single number.
Best of luck in your journey to building your dreams. If you want to check out the Porhclight Path or send us an email, please do! We’d be happy to talk in more detail.