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As an Austin custom home builder, we understand that clients often have questions about the cost per square foot during the initial meetings for their new home construction. It’s a topic that requires some clarification to provide a comprehensive understanding. In this article, we will address the key components related to building size, living area, and covered area delineations.

Historically, real estate agents, appraisers, inspectors, taxing authorities, and buyers have focused on the property value as a price per square foot of the living area. In the past, measurements were done by simply measuring the exterior of the home and then deducting the garage and front porch to determine the “living area.” While the calculations have become more precise today, they essentially measure the same thing.

During our initial meetings with clients, we discuss the cost per square foot of their new home. This discussion helps them understand how their wish list and desired features affect the costs associated with the living area. It’s essential to understand the relationship between the living area and the final building size, as it is often an enlightening moment for our new customers.

Many people assume that 5,000 square feet is simply 5,000 square feet. However, if one plan includes more garage bays, a large covered front porch, and an award-winning outdoor living area, the covered area (or building size) will be larger. In some cases, this additional footage costs the builder more per square foot to construct than a bedroom, game room, or family room. Features like wood ceilings, exterior columns, flagstone floors, weatherproof light fixtures, ceiling fans, outdoor kitchens, and audio-visual equipment all contribute to higher costs. When comparing the price per square foot of a 5,000 square foot home, all these costs must be included in the budget. However, none of the square footage of these areas is considered in the price per square foot analysis of the living area.

Understanding this relationship between living area and covered area doesn’t typically alter the new home design. However, it does help clients grasp the cost of their new home as it takes shape right in front of them. As demographics change and children move out, many people are interested in downsizing their homes. Empty nesters, for example, may express the need for only 3,000 to 3,500 square feet for their new home. However, they still desire a three-car garage and an oversized outdoor living area. These costs now have to be spread over less living area footage. The bottom line is that smaller homes cost more per square foot to build than larger ones because there is less square footage to divide the fixed costs among (driveway, garage, land, covered porches and patios, landscaping, etc.). The relationship between the building size and the living area of a home significantly affects both the cost and the price per square foot.

Numerous other factors can affect costs and the price per square foot conversation. One such factor is what builders refer to as development costs. These costs specifically relate to the expenses associated with constructing a new custom home on one site compared to another. Soil conditions, topography, vegetation, utility location and availability, city and community requirements are all examples of variables that significantly influence the cost of a home. For instance, a flat lot with average trees, no fill, and availability of sewer, water, power, and cable TV in the county (versus an incorporated city) will generally result in the lowest possible construction cost. Moving away from these variables can increase the cost of building a new home, even without adding any additional footage or features.

Another significant factor is topography. While sloping lots on hillsides often provide panoramic vistas, they come with a higher cost for the overall project. Topography affects various costs, including the foundation, exterior masonry, utilities, landscaping, pools, driveways, retaining walls, and excavation. It’s crucial for custom home Realtors to involve a professional builder in the client’s land purchase before the final decision is made. The cost of the lot versus the price of the lot is an important consideration. A $75,000 lot, for example, can be less expensive for the project than a $50,000 lot when factoring in all the associated costs.

Building designs also play a significant role in the cost of a new home. Take the example of a perfect square with 10 feet on each side, containing 100 square feet. Now, consider a rectangle with 50 feet on the long sides and 2 feet on the short sides, also containing 100 square feet. However, to build the first 100 square feet, the builder must pay for 40 linear feet of exterior wall space, including framing, drywall, insulation, stone, and baseboards. To build the second 100 square feet, the builder has to construct 104 linear feet of exterior walls. This example demonstrates that building 40 feet of walls cannot be done at the same price as building 104 feet of wall space. This understanding helps explain how production builders offer homes at affordable prices by constructing square homes on level lots.

Lastly, it’s worth noting that two-story homes are generally less expensive to build than one-story homes. Building vertically allows for using the foundation and roof twice, shorter lumber, electrical wires, heating and air ducts, plumbing pipes, and more. However, when comparing a one-story 3000 square foot home to a two-story 3000 square foot home, there is no direct comparison in terms of “price per square foot.” Understanding this, even clients who initially discuss a one-story home often consider adding bedrooms upstairs to reduce costs.

In conclusion, providing a specific “price per square foot” for a custom home in Greater Austin without considering all the factors discussed in this article is virtually impossible. Factors such as the location of the new home, its size, design, features in the outdoor living area, and the overall finish out selections greatly influence the cost per square foot. Any quotes for the price per square foot without a comprehensive understanding of the site, building, and finish out are based on assumptions that may not be valid for the specific project.

As experienced custom home builders with over 44 years of building experience, we at Zbranek & Holt Custom Homes understand the complexity involved in determining the cost per square foot of a new home. Each project is unique, and various factors contribute to the final cost. If you have any further questions or need assistance with your custom home project in the Austin area, we are here to help. Contact us today to discuss your vision and explore the possibilities of building your luxury custom home.