Now is a great time to build! Builders are hungry, prices of many construction materials are low, and the vendors are making deals to get business. If you have the resources, don’t wait. Build now and capture the savings. Right now, Warren Buffett is buying U.S. stocks because he sees them as a low-priced opportunity. Construction costs represent the very same opportunity. You can cash in big time if you act now. 

    I got a note from a prospective client recently asking for my advice on what construction costs might be for a new house. They were in the early stages of planning and wanted to get an idea of how much their new house might cost. Here is my answer:

    I have recently had a house price out at $170 per foot and another as high as $275 per s.f. There are a lot of variable that can affect the cost, as you can imagine. The formula I use is to include all of the “heated” square feet. I do not count the garage and/or porches. This formula is sort of the industry standard. For budgeting purposes, I would suggest using $200 per s.f. as the low end and $250 as the higher end. Of course, it is possible to go considerably higher. The variability of cost is due to different exterior materials, the shape of the house, the appointments within the house, and the site considerations. But above $250 per s.f., the added cost is attributed to particular items, like very expensive cabinetry or particular site conditions, and things like that. It’s hard to get more definitive than that until the house is designed and those numerous variables are known. (more…)