We need to talk.

Hardly a day goes by when I don’t speak to people like you: consumers planning to build a new home - or considering planning to build- and exploring the cost of building. They are trying to understand how to forecast and control cost. What do they need to know and do to avoid becoming yet other chapters in the encyclopedic annals of heartbreak, in which months of planning are trashed when the cost is twice the budget.

In these calls, one of the most common miscomputation is that cost is directly proportional to house size; that a 1000 square foot house will cost a third of what a 3000 square house costs. The caller often quotes building cost from five years ago and applies them to this misconception:

“If a 3000 square foot new home builds for $200 per square foot,
a 1000 square foot home will build for $200,000.”

Actually, that’s not the case. The average cost of a 3000 square foot house today is closer to $275 per square foot. The 1000 square foot home will likely cost $325 per square foot or $300,000.

Let’s dispense with two myths. In 2018, the average cost per square foot for a custom home of moderate complexity approached $300 per square foot in Seattle and was well over $300 per square foot in New York.

**Does this look like a $200 per square foot home?**

Please refer to information from the annual National Construction Estimator in a previous blog posting to read the facts about regional building costs per square foot.

Why do smaller houses cost more per square foot than larger houses? Let’s start with some relatively simple comparisons.

While certain cost centers in the construction of 1000 and 3000 square foot houses of similar quality may be similar, invariably smaller houses cost more per square foot than larger houses, even though the total costs are lower. Only two of the cost centers on this table even approach the .33 ratio that would maintain the same square footage cost in larger and smaller homes.

At Warmmodern Living our success depends on proper estimating, and using the Lindal building system to predict cost and to value engineer if cost correction is required. Our system and experience building that system repetitively enables us to be students of cost. Our livelihood depends on it.

“If a 3000 square foot new home builds for $200 per square foot, a 1000 square foot home will build for $200,000.”

“If a 3000 square foot new home builds for $200 per square foot,
a 1000 square foot home will build for $200,000.”