Part 2; Other Factors Affecting Price per Square FootUnderstanding “Price per Square Foot” for New Custom Homes in the Greater Austin and Hill Country areas of Texas

Let’s examine several other factors that are often not considered when comparing “price per square foot”.

Numerous other factors can affect costs going into the price per square foot conversation. The first factor we will discuss is something builders refer to as development costs. This specifically relates to what it costs to construct a new custom home on one site compared to another. Items such as soil condition, topography, vegetation, utility location and availability, city and community requirements are all examples of variables which greatly affect the cost of a home. For example, a flat lot with average tress, no fill, sewer, water, power and cable TV stubbed to the site, in the county (vs. an incorporated city) will typically produce the lowest possible construction cost. Moving away from these variables can increase the cost to build a new home, without adding any additional footage, features or any fun stuff to the home.

Topography is another factor to take into consideration. While sloping lots on hillsides typically provide panoramic vistas, these views come at a high cost to the overall project. Topography affects the so many costs, including the foundation, exterior masonry (on one of our homes the stone mason had to scaffold up 10 feet to get to the bottom of the home), utilities, landscaping, pools, driveways and not the least of which tractor work, retaining walls and excavation. Savvy custom home Realtors get a professional builder involved in a client’s land purchase before the final decision is made. Lot cost versus lot price is the point here. A $75,000 lot can be less expensive to the project than a $50,000 lot.

In addition to home site variables and the overall building size, building designs also play a significant role in the cost of a new home. Let’s begin with this basic geometry example. If you draw a perfect square with 10′ on each of the four sides, the box contains 100 square feet. Easy! If you drew a rectangle that had 50′ on the long sides and 2′ on the short sides, the rectangle would still contain 100 square feet. Easy again. However, to build the first 100 square feet the builder must pay for 40 linear feet of exterior wall space (framing, drywall, insulation, stone, baseboards, etc). To build the second 100 square feet the builder has to build 104 linear feet of exterior walls. While this example is extreme, it still proves a point. No one can build 40 feet of walls for the same price as 104 feet of wall space. When you connect these dots it’s easy to understand how production builders offer homes at affordable prices. They build square homes on level lots.

Lastly, for this segment, another thing that the production builders know is that two-story homes are less expensive to build than one-story homes.  Two-story homes enable you to build on the foundation twice, under the roof twice, use short lumber, electrical wires, heating and air ducts, plumbing pipes, and more.  However, back to our topic of cost per square foot…When a one-story 3000 square foot home is offered for sale next to a two-story 3000 square foot home there is no consideration in comparing “price per square foot”.  Once our custom homes clients understand this, even those who began discussing a one-story home often let us put a couple of bedrooms upstairs to reduce “costs”.  In the final segment, I will discuss where new home clients have full control of their final price.

---

Zbranek & Holt Custom Homes is a Hall-of-Fame, 2 Time National Master Home Builder and renovation specialist serving the greater Austin and the Texas Hill Country areas with over 38 years of building experience, we offer fixed-price full service and collaborate closely with skilled architects to expertly deliver on our client’s individual preferences.

Every Zbranek & Holt Home is designed and built for the way you live!