Understanding Price Per Square Foot When Talking With A Builder
Scott P. Rogers
If you're thinking about hiring a builder to build you a new home, you may eventually be thinking about or talking about Price Per Square Foot.
Let's try to create some context. Stick with me here...
$111 = The average Price Per Square Foot for all properties sold in Harrisonburg and Rockingham County in 2018.
But that includes condos, townhouses and duplexes - maybe those are throwing off our understanding of PPSF.
$121 = The average Price Per Square Foot for all detached homes sold in Harrisonburg and Rockingham County in 2018.
OK -- it didn't change much -- but perhaps the middle aged homes and really old homes are throwing us off as well.
$149 = The average Price Per Square Foot for all detached homes less than 10 years old that were sold in Harrisonburg and Rockingham County in 2018.
So -- new-ish homes sold in the MLS have been selling at an average of $149 per square foot. Though I should point out that the price per square foot does run all the way up to $218 in this same set of sales.
But before you prepare to pay $149 - $218 per square foot for a new home, keep in mind that these prices per square foot, above, are including the cost of the land. The values above are simply dividing the total sales price (land + house) by the number of square feet.A 2400 SF home at $149/sf (including the land) would cost $357,600. That's using the PPSF from the MLS for detached homes built in the past ten years.
But your builder is likely quoting you a price per square foot for just the house -- and not the land.
So if a builder says they can build for $125/SF...
As a final (important) disclaimer here -- I'm not a builder. Talk with your builder about how they price the homes that they build for their clients. Carefully weight the pros and cons (financially and otherwise) of building vs. buying. In the end, you'll probably be able to get a house that is a better fit for you if you build -- but it might be at a slight premium over the price you might pay for a re-sale home.2400 SF x $125 = $300KBuilding Lot = $80KFees, Permits, Driveway, Landscaping = $20KTotal = $400K
