Projecting Cost

While we’re waiting for the estimate (due at the end of the month), we might as well talk about cost. I’ve diligently avoided naming our budget so far, and it’s because budget is relative to income and cost is relative to location. A 1,500 square foot home could cost $120k in Fort Wayne, $180k in Indianapolis, and $800k in San Jose. I want to keep this discussion relevant in all cases.

Most people expect architects to have an expert grasp on construction costs, but there’s also a reputation for blowing budgets with all of our chic finery. The truth is that most architects have an okay grasp and can ballpark an estimate, which is one reason why larger firms have a dedicated estimator – to hone in on a more accurate number.

The best way to get an estimate is to take a design to subcontractors (individual trades like carpenters and plumbers) to see how much they would charge for their portions of the work. (Kind of like bidding the project at any stage of the design, ours is schematic or preliminary.) Anyone could do this, but general contractors work with subs every day and have established relationships, meaning they can do it more efficiently. On the other hand, architects generally rely on rules of thumb, like costs per unit for each component (as established by folks like those at R.S. Means), or general costs per square foot from previous jobs of a similar construction type and level of finish.

The AVERAGE house cost $80 – $150/s.f. to build. That’s not a limit. I keep tabs any time I see costs, and the high end homes we all drool over the most are $200-$300/s.f. or more. It’s frustrating when a client expects the higher level finish at the lower level budget – one or the other has to give. (Wouldn’t it be nice to have everything without having to pay for it?) Since we need to be on the lower end, we’re looking forward to our estimate with open minds, i.e. we’ll provide our own labor when possible, and sacrifice square footage or level of finish to keep on budget.

As I said, I’ve kept tabs. Here are some:

Semi-custom production home – low-mid level finish – Midwestern suburbs

  • $240k total      ~$48/s.f.      4,952 total s.f.

Model production home – low-mid level finish – Midwestern suburbs

  • $184k total      ~$58/s.f.      3,200 total s.f.

Architect = Owner = General Contractor – low-mid level finish – Midwestern metropolitan

  • $196k total      ~$68/s.f.      2,100 s.f. finished / 800 s.f. unfinished

Architect = Owner = Contractor – mid-high level finish – Midwestern metropolitan

  • $unknown      ~$129/s.f.

Custom home – high level finish – Midwestern estate lot suburbs

  • $850k total      ~$243/s.f.      2,400 s.f. finished / 1,100 s.f. unfinished

They’re all over the place. This is why we’re sitting tight for our estimate and willing to make adjustments.

That said, here are some design tactics to reduce cost: (we haven’t followed them all; we’re testing the waters and will revert if necessary)

  • Keep your plan footprint simple and rectangular.
  • Keep your house small.
  • Build taller – stack your square footage (less foundation and roofing).
  • Use standard details and construction types for your location.
  • Use less expensive finishes for secondary spaces (2nd floor, basement, etc.).
  • Prioritize your features, eliminate from the bottom up but never eliminate essentials.
  • Plan for phased construction / build in stages (build out that nursery when you need it).
  • Explore alternate, less expensive materials.
  • Reuse (NOT RECYCLE) building components.

And here are some project management tactics to reduce cost:

  • Establish your budget. Consider it absolute.
  • Vet options and finalize design before construction.
  • Discuss construction efficiencies with your contractor in your first meeting.
  • Hire a General Contractor that is known well for controlling / overseeing sub-contractor work.
  • Make no changes during construction unless dire.
  • Provide your own labor (your time is a soft cost, read up and ask about techniques).
  • Purchase materials direct.
  • Ask suppliers or contractors about unused (remnant) stock materials.
  • NEGOTIATE (seems obvious, but you’d be surprised).
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One thought on “Projecting Cost

  1. Cost? What’s that mean?
    I like your comparison and research. The big flashy architecture magazines routinely show ‘affordable’ homes that approach $300/s.f. Must be nice if that’s affordable for you.
    Good Architecture has restraint, of all kinds, but restraint of budget truly takes creativity and I’m sure you will do it!

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