New home construction costs - OMG!

[REWahoo]

With these construction costs, I bet many homeowners are also underinsured.

USAA periodically calculates the cost to rebuild their insured's homes and strongly suggests you insure for that amount. My amount has gone up the past couple of renewals.

 

[Bamaman]

Insurance companies are usually on the hook for replacing your house. They start you on a teaser rate/premium. Bear in mind that rates.are charged by the.$ thousand.

In 5 years, they will be charging 150% of what the house is worth. But if it burned and you didn't rebuild, they will not pay what you have its insured for.. And you have been paying those big premiums for nothing. And without insuring.your cars, they won't even insure the house.

 

[Music Lover]

Yes, custom build is definitely expensive.
We built custom last year (one year in the house last weekend actually).
It cost more than the original plan (we knew that would happen), it was stressful, and took 7 months longer than originally planned.

And, it is perfect, I would do it again without hesitation.
It is EXACTLY what we wanted, has improved our quality of life, lowered our monthly bills (Net Zero house), given us more time and allow us to age in place.

But to get there, we did a ton of planning. I don't care about resale value, as when I leave, it will be feet first

I'm not singling you out...I just chose your quote as an example so please don't take offense.

How perfect does a house have to be? I think too many people go through the hassle and expense of building their dream house at a premium cost, but when it's all said and done, it's just another house with floors, walls, and a roof with a floor plan that won't be any different than a lot of others out there. One of my friends built his dream house and nit picked and worried about the details for months for no good reason...the reality is that there are only a few ways to lay out an average size house that are sensible and functional. He could have bought a similar house on the same street for less money and moved in a month later. Instead, he chose to go through the huge hassle, expense, and time waste of custom building.

A lot of existing houses in the right location can be made almost perfect with a few modifications....and what is not perfect is rarely worth worrying about.

 

[BeachOrCity]

If you know what you want..... bid it out to three builders.
Also incl allowance for electric outlets recessed lights. Etc. put a clause on contract that you get to approve plumbing and electric layout before rough in.

I think you should be able to get decent finishes for 150ft in your area, but add to that landscaping fences septic etc. the best builders will quote you by all the trades and just add in their overhead and profit allowance. 15-20 percent for ThAt.
Don't try to get them lower than 15 as that is really a professional minimum.

Try to have any allowances items for material choice like tile, but the labor is fixed.
Easier not to get taken advantage of that way

 

[RobbieB]

If you want to build a new custom craftsman home you have to pay for same.

Maybe consider an existing and then modify to your wants?

 

[foxfirev5]

Remember it's a lifestyle choice. We bought DW's dream home 22 years ago and it was a lousy investment. However the years of comfort, enjoyment and overall content are priceless. Never figure it into your net worth and enjoy yourself.

 

[Zathras]

I'm not singling you out...I just chose your quote as an example so please don't take offense.

How perfect does a house have to be? I think too many people go through the hassle and expense of building their dream house at a premium cost, but when it's all said and done, it's just another house with floors, walls, and a roof with a floor plan that won't be any different than a lot of others out there. One of my friends built his dream house and nit picked and worried about the details for months for no good reason...the reality is that there are only a few ways to lay out an average size house that are sensible and functional. He could have bought a similar house on the same street for less money and moved in a month later. Instead, he chose to go through the huge hassle, expense, and time waste of custom building.

A lot of existing houses in the right location can be made almost perfect with a few modifications....and what is not perfect is rarely worth worrying about.

Not at all, that is a great point. Before we built, I might have said the exact same thing.
What I didn't realize is just how much happier and content I am when everything is exactly right. We have a better quality of life, which is priceless. Some of these things I could have done by renovating, but some not.
I am also convinced, because the house is just right, we will not be moving. This saves us a lot of cost in the future.

Custom building isn't for everyone, and definitely has disadvantages. But it also has advantages if done right.

 

[ivinsfan]

Not at all, that is a great point. Before we built, I might have said the exact same thing.
What I didn't realize is just how much happier and content I am when everything is exactly right. We have a better quality of life, which is priceless. Some of these things I could have done by renovating, but some not.
I am also convinced, because the house is just right, we will not be moving. This saves us a lot of cost in the future.

Custom building isn't for everyone, and definitely has disadvantages. But it also has advantages if done right.

If you custom built and got "everything" right you are one of the lucky few. I'm curious about your "quality of life" comment, is this due to location or other things in the house? It seems to me if you have a solid roof over your head, power and running water, feel safe in your neighborhood, the rest is all gravy.Now if you mobility issues that's another story.

 

[RunningBum]

Gravy is awfully nice. Along that theme, the parallel is that all you really need is basic food, but it's nice to have a better cut of meat, fresh veggies instead of canned, a good sauce, and wine rather than water (or whatever makes a great meal for you).

Of course you can get a nice house just like you can get a nice meal, but the difference with custom build is that you select the exact size of meat, the kind of sauce, the perfect wine, etc. Of course it assumes you know just what you want.

You also pay extra for that nicer meal, just like you pay extra for a custom build house, in a larger scale. Whether that's worth it is up to the individual or couple. For me, it was a matter of not finding a good "close enough".

 

[athena53]

Insurance companies are usually on the hook for replacing your house. They start you on a teaser rate/premium. Bear in mind that rates.are charged by the.$ thousand.

In 5 years, they will be charging 150% of what the house is worth. But if it burned and you didn't rebuild, they will not pay what you have its insured for.. And you have been paying those big premiums for nothing. And without insuring.your cars, they won't even insure the house.

Yeah, I've run into that- in fact, I once changed companies once for a lower premium and they immediately did a drive-by evaluation and bumped up coverage, thus eliminating the "savings".

I've been though a discussion on this with my actuary friends. I'm comforted by the fact that there are VERY few total losses in the experience underlying the rates. Most of what you're paying for is the risk of small, partial fire losses, roof damage in hailstorms, the occasional major home burglary (above the deductible), etc. Those don't change much from a $400K house to a $600K house. I haven't seen Homeowners rates lately but I doubt that coverage for $600K replacement cost is 1.5 times the premium for $400K replacement cost, either.

 

[Zathras]

If you custom built and got "everything" right you are one of the lucky few. I'm curious about your "quality of life" comment, is this due to location or other things in the house? It seems to me if you have a solid roof over your head, power and running water, feel safe in your neighborhood, the rest is all gravy.Now if you mobility issues that's another story.

The biggest quality of life (QOL) improvement is definitely going from unsecured, to a secured dwelling, which is available regardless of a custom vs pre-existing home.
Other aspects of the improved QOL also were available in an existing home, location is part of that, as is a smaller house.

Some aspects are not as easy to find, but can be renovated for. Such as all cabinetry under the counters being drawers, no carpets, expansive south facing windows (drastically lowered power bills and more natural light).

Some renovations can be as, or more expensive than building them to start with. Healthier radiant heat vs forced air run by geothermal.

Between the radiant heat vs forced air and no wall to wall carpet (very common in my region) our allergies trouble us much less, I sleep better, nap less, and just feel healthier.
And because the house is just right for us, I don't expect to be moving ever again.

All drawers under counter height, curbless shower, doorways wide Anouilh for wheelchairs, and one level capable living will allow us to comfortably age in place. We even constructed downstairs to be easily made into its own apartment with some renovations, so if we require live in help we can do that.

Over our life, we will avoid the cost, stress and time of moving.
We paid for it up front in extra cost and stress, but over our lives I expect it to be a net savings of both, even ignoring the QOL improvements.

The 'perfect' house is different for everyone. We had some very specific aspects of the house not available widely on the market (net zero energy and extremely low upkeep/utility costs). For others, they may find a house on the market that is perfect for them, or can be made so with less stress and cost than building custom.

 

[ivinsfan]

The biggest quality of life (QOL) improvement is definitely going from unsecured, to a secured dwelling, which is available regardless of a custom vs pre-existing home.
Other aspects of the improved QOL also were available in an existing home, location is part of that, as is a smaller house.

Some aspects are not as easy to find, but can be renovated for. Such as all cabinetry under the counters being drawers, no carpets, expansive south facing windows (drastically lowered power bills and more natural light).

Some renovations can be as, or more expensive than building them to start with. Healthier radiant heat vs forced air run by geothermal.

Between the radiant heat vs forced air and no wall to wall carpet (very common in my region) our allergies trouble us much less, I sleep better, nap less, and just feel healthier.
And because the house is just right for us, I don't expect to be moving ever again.

All drawers under counter height, curbless shower, doorways wide Anouilh for wheelchairs, and one level capable living will allow us to comfortably age in place. We even constructed downstairs to be easily made into its own apartment with some renovations, so if we require live in help we can do that.

Over our life, we will avoid the cost, stress and time of moving.
We paid for it up front in extra cost and stress, but over our lives I expect it to be a net savings of both, even ignoring the QOL improvements.

The 'perfect' house is different for everyone. We had some very specific aspects of the house not available widely on the market (net zero energy and extremely low upkeep/utility costs). For others, they may find a house on the market that is perfect for them, or can be made so with less stress and cost than building custom.

You're very forward thinking, would you mind sharing your age range? I was picturing granite counters, half a dozen bathrooms and stuff like that. Not that there's anything wrong with these things, but IMO they don't really add to quality of life.

 

[Meadbh]

The softwood lumber trade dispute with Canada has been going on for decades. Very large duties have been imposed recently in the US on Canadian lumber that have greatly increased the cost of lumber in the US market. This is to protect the much less productive American industry. Don't blame it on Canada. We would love to sell you cheaper lumber.

+1
Also, the forest fires in BC this summer have burnt so many trees that there is a lumber shortage. Some mills are shutting down or laying off workers.

http://www.cbc.ca/news/business/lumber-prices-wildfires-british-columbia-1.4204903

 

[Zathras]

You're very forward thinking, would you mind sharing your age range? I was picturing granite counters, half a dozen bathrooms and stuff like that. Not that there's anything wrong with these things, but IMO they don't really add to quality of life.

Very kind of you to say

I am about 50, we started planning three years ago.
No granite, although we did have durability, and low maintenance costs as high priorities.
2 bedroom, 1 bath, 1half bath, 1 3/4 bath. Plumbing for a kitchenette downstairs roughed in so it can be easily converted from the office/craft/game room.

If you are interested, I have a blog about the house, including the painful parts, at Driven to Net Zero - Blog

 

[ivinsfan]

Very kind of you to say

I am about 50, we started planning three years ago.
No granite, although we did have durability, and low maintenance costs as high priorities.
2 bedroom, 1 bath, 1half bath, 1 3/4 bath. Plumbing for a kitchenette downstairs roughed in so it can be easily converted from the office/craft/game room.

If you are interested, I have a blog about the house, including the painful parts, at Driven to Net Zero - Blog

Most 50 years think they are never going to get old and disabled,I will read your blog when I have some extra time.

 

[redshift]

Very kind of you to say

I am about 50, we started planning three years ago.
No granite, although we did have durability, and low maintenance costs as high priorities.
2 bedroom, 1 bath, 1half bath, 1 3/4 bath. Plumbing for a kitchenette downstairs roughed in so it can be easily converted from the office/craft/game room.

If you are interested, I have a blog about the house, including the painful parts, at Driven to Net Zero - Blog

Zathras:

Great blog! Congratulations on obtaining LEED Platinum. I've been the construction manager on a couple of projects that got Platinum and I know how much work it is. Good on you!