Did I miss the memo about housing builds skyrocketing?

customcj7 · Nov 4, 2016

Building a house on a lot that I own. It would be the largest house we've been in, but it's not huge by any means, 2558 sq/ft.

I'm getting quotes from builders and they are all asking for prices at $140 sq/ft. Which puts this house at $360k.

I literally about **** myself the first time, now I'm just thinking these people are insane.

There is no way in hell I'm spending that to build a house on my own land, if I didn't own the 3 acres I'm on, I might could understand it a bit, but WTF!?!?!?!?!?!?!

Has Birmingham gone mental on housing costs, or has material really gone up that much (the common excuse). Hell I know people who have 4500 sq/ft on the lake that only spent 425k.

clemsonjeep · Nov 4, 2016

I would have to assume you did, but just to be sure...were you clear with them that the price you wanted was to build on YOUR land?

In either case...that sounds high to me, but I live in SC where everything (for the most part) is cheaper.

TacomaJD · Nov 4, 2016

All depends on where you live I guess. I'm getting married in April and will be buying a house in a few months from my buddy, who is a builder. Before we worked out a deal on his current house, we were looking at building, something in the 1600-1800 heated sq ft. range, and I want to say he quoted around $85 a sq ft with vinyl siding.

86chevota · Nov 4, 2016

It really depends on where you live but all in all construction booming so things are costing more. Timber prices are down but lumber is still high along with everything else in the building world

tallnate · Nov 4, 2016

customcj7 said:
Building a house on a lot that I own. It would be the largest house we've been in, but it's not huge by any means, 2558 sq/ft.

I'm getting quotes from builders and they are all asking for prices at $140 sq/ft. Which puts this house at $360k. I literally about **** myself the first time, now I'm just thinking these people are insane.

There is no way in hell I'm spending that to build a house on my own land, if I didn't own the 3 acres I'm on, I might could understand it a bit, but WTF!?!?!?!?!?!?!

Has Birmingham gone mental on housing costs, or has material really gone up that much (the common excuse). Hell I know people who have 4500 sq/ft on the lake that only spent 425k.

I know how you feel man. In recent past years I'd always heard the going rate was around $110 sq/ft. I know a few people in the home building business and they're raking it in right now. It seems to me that since the housing market has skyrocketed around here, the builders, subs, material suppliers etc have all raised their rates because people are paying it happily. If I were you I'd meet with a few of the builders you like and see if they can give you a breakdown on the costs and then do a little research on your own to see if those amounts check out mathematically. My guess is you'd find a large chunk of money hidden in the materials and specifically labor rates. Because we all know, most contractors are going to hire a crew of amigos to frame that thing up in a jiffy for $10-$12 an hour. Maybe try throwing your max budget out there and see if they will agree to do the build for you at that amount. I'm about to pull the trigger and just build something myself as well so I'll be curious to hear how it goes for ya.

fordcontraption01 · Nov 4, 2016

We just built an addition on last year which was a 38x40 and I found a guy that was reasonable. Basically all I can say is whatever the material costs is what they want to charge to do the job

TacomaJD · Nov 4, 2016

Is it common for builders to charge a "cost plus" rate? That's what my buddy said he prefers to do, I had never heard of it....but then again, I haven't ever really looked into building a house before either. He says during construction, he charges an hourly wage for his time spent working each week so he draws a steady paycheck and pays his workers. Then when construction is finished, the homeowner writes him a check for 10% of total build costs. Like if you spend $100k in materials to complete construction, when it's done, you gotta write him a $10k check to finish paying for his labor/contracting.

86chevota · Nov 4, 2016

TacomaJD said:
Is it common for builders to charge a "cost plus" rate? That's what my buddy said he prefers to do, I had never heard of it....but then again, I haven't ever really looked into building a house before either. He says during construction, he charges an hourly wage for his time spent working each week so he draws a steady paycheck and pays his workers. Then when construction is finished, the homeowner writes him a check for 10% of total build costs. Like if you spend $100k in materials to complete construction, when it's done, you gotta write him a $10k check to finish paying for his labor/contracting.

Yes it's very common I do 21%!!! 10% is very reasonable and usually find that on spec houses! I do nothing but custom and I have true carpenters. A of the my houses Are 100% custom. Too many examples to list but one example is my trim ( crown ,base etc. ) we make 100% it's one-of-a-kind that you will not find anyone. Are vanities ,cabinets, and built-ins everything we make. Most of the houses I do don't have finished sheet rock for walls and ceilings its entire wood other than bathrooms and such if they want tile floors. There's a few builders around Knoxville that will build you anything you want for 10k!!!

clutchee · Nov 4, 2016

Just went through this.... first person quoted us over 100k about what we agreed to.

Basically we had friend who was contractor- sit down and explain you will help but want use his subs or basically be the contractor.

Saved us TONS.... he gave me names and who to use then we called and followed up with them.

Basically for 1950sq/ft living we are at 102 sq/ft but we built metal house and have porch all way around and made it super efficient.

ROKTOY829 · Nov 4, 2016

Re:

In the process of getting qoutes know. The guy im looking at said to go ahead and get 200,000. He is think from dirt work all the way through the last nail. Im building 1901 sq ft brick house.

Already have driveway most of the way, septic system, water meter, and power. But have red gumbo and 6 large oak trees that im dancing around.

He told me im looking at around 20,000 in lumber, knocking on 20,000 in labor. Heating and air system was qouted at 17,000 the Mitsubishi style. Dirt work and finishing the drive is 8,000.

Im wanting him to black it in and i go from there. Still gotta get a price on the brick work and other stuff.

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johneddie · Nov 4, 2016

Breaking ground on our new house this coming week. The $145/square foot is pretty much right on. We work in new construction with our business so we know several contractors....some are "better" than others. We asked around a lot on pricing just trying to get an idea before we jumped in feet first, we haven't built since 2004. We've been told $85-95/sq. ft subbing it yourself, higher if turn key (we have land).We had a couple of our "better" builders tell us $145. After gathering quotes and estimates on two different homes, you can take that 85-95 and throw it out the window!! :****: Our better builders that we work for were pretty much right on the money with the $145. **** ain't cheap anymore....even though we haven't raised our prices on several things in quite a few years. May need to so I can finance our new house! Lol
Ohh... and "cost plus" is common. 10-20% + around here...get what ya pay for in most instances. Just do your homework cause if it sounds too good to be true or exactly where ya wanna be, ya better step back and take a look. I wanna be realistic and not have a big surprise at the end!

ibrokeit · Nov 5, 2016

Allowances. Know what your allowances are for these psf numbers y'all are throwing out. Without them, the psf numbers are throwing darts blindfolded. Are you getting a $15 contractor grade facet, or a nicer moen (or whatever is nice these days). Farm style porcelain sink or a plastic drop in? $600 fridge or $2,600 fridge? That stuff adds up like crazy.

Number of windows. SF of porches. Things like that people don't think about.

The psf number is the last thing you should look at, after you look at the budget for every line item of the building process.

johneddie · Nov 5, 2016

My numbers are based on building something nice, not over the top but nice...hardwood, tile, good carpet, nice cabinets, granite tops, good fixtures, higher end appliances, good windows, spray foam, etc. We've changed house plans three times now. This will be our last home. The $145 seems to fit that bill....I'll let ya know in about 6 months.

As far as "allowances", I'd rather have a builder that's realistic than one who just wants to get the job...jmo

ROKTOY829 · Nov 5, 2016

Re:

What is the psf numbers?

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johneddie · Nov 5, 2016

Re:

ROKTOY829 said:
What is the psf numbers?

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The cost "per square foot" to build the house.

ROKTOY829 · Nov 5, 2016

Re: Re:

johneddie said:
The cost "per square foot" to build the house.

Im a dummy.

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customcj7 · Nov 7, 2016

I hear ya on realistic vs just going off PSF numbers. But it just blows my mind that a house like this would cost this much. I didn't think it would be $85-95 sq/ft, but damn.

Sometimes there's a part of me that thinks I should sub this out on my own and work through it, but I've been there done that with my old shop. While I did learn a lot, I don't think it was enough. But it did save me a lot of money controlling when I stepped in versus paying a professional.

LightBnDr · Nov 7, 2016

We have the same dilemma in my area. Price per sq. ft. here is 125-130. I have interviewed 4 builders. Looking at the itemized allowances, the highest cost seems to be concrete slab materials and labor.

We have horribly expansive soils here so all of the builders brag about their foundation quality.

I feel your frustration. I understand the market completely but it doesn't change the fact that if you are native to your area you remember 5 years ago a builder couldn't give away enough labor to sell a custom home build. Now all of a sudden we have 4 times the amount of illegals pouring in that are cash paid and mysteriously costs have almost doubled.

Sucks. I don't want to build a 4500sq ft home either so for a very conservative build I didn't expect my head to be ripped off. Lol. Good luck man. Do your research

blacksheep10 · Nov 7, 2016

So wait a year.5 for this bubble to bust again. If you have enough to build now you'll have enough to build then. Everybody wants our house right now I just can't afford to build right now the way I want to. I'm waiting it out a bit.

ibrokeit · Nov 7, 2016

For what it's worth, 6 months ago we were looking at building. I am one of the heads at a large commercial concrete company's so I could have foundation in dirt cheap and have a lot of connections for the rest of the work. I ended up finding a 6 year old house almost exactly what i wanted. We were the first people to look at it the morning it was listed, and put an offer in that day. Paid $407,000 for it. Only reason I mention that is to say--I ran the numbers with 2 different custom home builder friends of mine after closing. To replicate what I have on the same value lot, it would cost over $500,000, or $166/sf including lot, or $140/sf if I already owned the lot. Ish.