Cost to Build a Home – How Location Influences the “Costs Per Square Foot”

What’s the cost-per-square-foot to build your home? I get questions from people all the time about home building costs. There are factors that make building costs similar but there are even more factors that cause variations.One such factor is location. Location will have an effect on many aspects of building.So, why would the location of your home affect the cost-per-square-foot to build it? For many, this simply doesn’t make any sense whatsoever. But, if you break it down, it begins to become clear. And, things that you felt couldn’t have an effect on price, suddenly grab your attention and make you think.No Difference in the Cost of Building Materials & Labor?In broader building areas like North America, you could make the argument that materials costs should be basically the same as long as we’re comparing apples to apples. That’s a decent assumption. You might further believe that labor is labor. Hmmm, it starts to get a little dicey here.Truthfully, location can affect both.Why Knowing is ImportantWhy is it helpful to understand the reason for “cost per square foot” variations? Well, for one, it’s to help you make your decisions about where to live, what you want, who you should hire, and what you’re going to get for a finished product. The better you understand, the better your choices will be.Location’s mighty influence on costs:┬áLabor Cost Variations: From one state to another, even from one city to the next, labor costs can vary significantly. This can be due to the quality and experience of the workers as well as labor unions and other factors.

Building Materials Shipping Costs: Whether it’s a packaged home or siding, roofing, windows or any other major component, shipping costs play a big role in the ultimate cost of those materials. Even more if items are imported.

Permits & Fees: An often overlooked factor. Some building jurisdictions have multiple fees that can really add up.

CC&Rs and HOAs: Covenants, Conditions & Restrictions as well as Home Owners’ Associations will often dictate; what you build, how you build, and even the professionals you can use! These can have a big impact on your costs.
Dig deeply into what you’re getting and the value it brings you. Remember, you’d expect to pay more for the Ferrari than the Cadillac, or more for the Lexus than the Chevy. But, remember that you’d also expect to pay more for labor in their repairs and service. The same holds true with home building.Don’t make the mistake of simply asking for the cost per square foot without digging deeper to see what you’re getting and the influence that location has on a project.Do your research. Use the industry professionals. And compare wisely.