Summary: It is foolhardy to base a decision to build, let alone a building budget, on a Cost per Square Foot, yet many do. The question “What does a certain house cost per square foot?” is ubiquitous!
What Does the Cost Per Square Foot Include?
How do calculate the cost per square foot?
Do you include the price of the land in the overall cost?
Do you include total square footage or just finished square footage?
Do you calculate basement finished square footage different than main and second level?
Do you include the garage or an enclosed porch?
I once heard a builder say that pricing a house by the square foot is like pricing a car by the pound. A Ford and a Lexus probably weigh about same, but they sure don’t cost same to build.
It is foolhardy to base a decision to build, let alone a building budget, on a Cost per Square Foot, yet many do. The question “What does a certain house cost per square foot?” is ubiquitous!
Resi-Cost recently provided a treatise on this dilemma that I think everyone who is thinking of building a new house should read.
Resi-Cost gives 5 examples of how the same 3,000 square foot new home can cost anywhere from $80 per square foot, to $129 per square foot.
A potential variance range of $49 per square foot in a cost to build estimate should be unacceptable to anyone. It is to me and it is to construction lenders.
Read “Why cost per SF derived budgets are ultimately unreliable”.