Builders, cost per square foot?

[joey2665]

Originally Posted by Formula260SS

I hear you - if I subtract my land value from what my house at home is worth I come up with about $120.00 / sq ft vs a realistic valuation based on recent sales. (I've had some friends move recently for price comparison) I'm not doubting you I just don't see how the math can work with a rolled up all in cost vs. what a bank would finance. I'm sure I'm missing something.

The build cost is separate from the land cost but remember it all depends on location for the assessed value which is what your ability to finance would be based on. I can tell you from experience 120.00 for a build cost in this market will not cut it at all. Remember this includes everything from excavation and land clearing to foundation to window and siding to flooring to appliances to plumbing fixtures HVAC and on and on.

I have built a few homes and I have been in the construction industry for years this is based on experience and the current market


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[Formula260SS]

Originally Posted by joey2665

The build cost is separate from the land cost but remember it all depends on location for the assessed value which is what your ability to finance would be based on. I can tell you from experience 120.00 for a build cost in this market will not cut it at all. Remember this includes everything from excavation and land clearing to foundation to window and siding to flooring to appliances to plumbing fixtures HVAC and on and on.

I have built a few homes and I have been in the construction industry for years this is based on experience and the current market


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I don't doubt you, I'm only trying to figure out how the numbers work - this is not an argument by any means at all.

A close friend just sold a pretty high end home in Londonderry where I live. Selling price was 750K, the land is worth I'd say 150K so that gets me to a house only price of 600K. The house is 3000 sq/ft, if I divide the 600K by 3000 sq/ft I'm at $200.00 sq/ft on the upper end of the scale.

If I give the land a higher value it drives the house sq/ft price down, if I add the sq/ft of his finished basement that also drives the sq/ft price down

Again I don't disagree with you I just can't see how the numbers would work. If your building a house and using a bank it's all got to balance out. At least that's how my brain works.

[Susie Cougar]

You really cannot compare a resale to a newly built house. The numbers do not have to make sense to you, but it’s what people are willing to pay right now.

[Formula260SS]

Originally Posted by Susie Cougar

You really cannot compare a resale to a newly built house. The numbers do not have to make sense to you, but it’s what people are willing to pay right now.

I don't disagree with you on that

The same person I mentioned is moving to Florida into a new build down there, those details I'm not totally up to speed on but will ask him.

I do know he's paying about 765K for 2600 sq/ft with the pool and Leni right on a golf course around Sarasota. (it is not a 55 and older).

If I do a quick calc based on a guess of 100k for land I'm at 665K for 2500 sq/ft = $266.00 sq/ft.

I'll call it good with this post unless I figure out where I'm going wrong - I'm a numbers guy and just not getting it. I never claimed to be the smart guy in the room.... Thanks for the good discussion

[joey2665]

Originally Posted by Formula260SS

I don't disagree with you on that

The same person I mentioned is moving to Florida into a new build down there, those details I'm not totally up to speed on but will ask him.

I do know he's paying about 765K for 2600 sq/ft with the pool and Leni right on a golf course around Sarasota. (it is not a 55 and older).

If I do a quick calc based on a guess of 100k for land I'm at 665K for 2500 sq/ft = $266.00 sq/ft.

I'll call it good with this post unless I figure out where I'm going wrong - I'm a numbers guy and just not getting it. I never claimed to be the smart guy in the room.... Thanks for the good discussion

I’m a CPA and in the construction industry and I get it. As Sue said you cannot compare new and existing.

If your planning on building for 120.00 your going to end up with below contractor grade materials.

A key factor is you are not considering the current demand for builders which drives up prices along with the skyrocketing material costs. In my Development they cannot find enough builders for the lots they want to develop with spec houses.


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[Susie Cougar]

Originally Posted by Formula260SS

I don't disagree with you on that

The same person I mentioned is moving to Florida into a new build down there, those details I'm not totally up to speed on but will ask him.

I do know he's paying about 765K for 2600 sq/ft with the pool and Leni right on a golf course around Sarasota. (it is not a 55 and older).

If I do a quick calc based on a guess of 100k for land I'm at 665K for 2500 sq/ft = $266.00 sq/ft.

I'll call it good with this post unless I figure out where I'm going wrong - I'm a numbers guy and just not getting it. I never claimed to be the smart guy in the room.... Thanks for the good discussion

I am in Florida and I have been here for six years now. I live in a development that is still being built so there are resales as well as new homes. The resales typically sell for less than the new homes, although right now during Covid, and because of lack of inventory, the prices have skyrocketed. We have gone from at least 20 homes on average for sale down to two right now. Homes stay on the market only a few days if the price is right and with multiple offers.
There is a base price to the new home but you can add as many options and upgrades as you want. This really determines the price per square footage. So in this regard, you cannot compare one 3000 square-foot house to another because each one is different depending on how much extra they spend on add-ons.
And just like everywhere else, there are some lots that are better than others and they carry a higher premium.
So I think you will drive yourself crazy if you try to apply the same ”Formula“ to each property.

[ApS]

Originally Posted by Formula260SS

I don't disagree with you on that
The same person I mentioned is moving to Florida into a new build down there, those details I'm not totally up to speed on but will ask him. I do know he's paying about 765K for 2600 sq/ft with the pool and Leni right on a golf course around Sarasota. (it is not a 55 and older).

If I do a quick calc based on a guess of 100k for land I'm at 665K for 2500 sq/ft = $266.00 sq/ft. I'll call it good with this post unless I figure out where I'm going wrong - I'm a numbers guy and just not getting it. I never claimed to be the smart guy in the room.... Thanks for the good discussion

Values of houses on Florida golf courses tend to follow variable criteria.

[Winilyme]

Originally Posted by Formula260SS

I don't doubt you, I'm only trying to figure out how the numbers work - this is not an argument by any means at all.

A close friend just sold a pretty high end home in Londonderry where I live. Selling price was 750K, the land is worth I'd say 150K so that gets me to a house only price of 600K. The house is 3000 sq/ft, if I divide the 600K by 3000 sq/ft I'm at $200.00 sq/ft on the upper end of the scale.

If I give the land a higher value it drives the house sq/ft price down, if I add the sq/ft of his finished basement that also drives the sq/ft price down

Again I don't disagree with you I just can't see how the numbers would work. If your building a house and using a bank it's all got to balance out. At least that's how my brain works.

Unfortunately, the math doesn't work that way. If you find an exact duplicate of that 150K lot and build an exact replica of that 3,000 SF house, it's generally going to cost you more to build than it would to outright purchase the home you're copying. That's part due to depreciation and the fact that, over time, cost of materials and labor increase.

As another point of reference, your homeowners premium may be based on a home rebuild value that significantly exceeds what you could sell the home for.

I say purchasing a resale is the way to go. You are more likely to get what you want, where and at a more reasonable cost. And throw some of the money saved into some renovations to make the home even more perfect.