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How Much Will It Cost To Build My Custom Home?

Well, we might as well start our blog with the most common question a homeowner asks when they begin the custom home exploration. As an active homebuilder, my neighbors and friends will drift to this question and the costs of homes within the first 5 minutes of conversation. Not sure if they realize I have other interests other than homebuilding and real estate, but I guess they aren't excited to discuss my sports card collecting or travel plans. Oh well, they're missing out. So lets discuss some of the drivers of costs for a custom built home.

Estimating the cost of a custom home

Typically costs in the United States real estate industry are discussed on a per square foot basis so I'll keep to that metric. When I originally wrote on this topic many years ago, I mentioned that many home builders get pretty irritated by this question. Often they respond – “Home much does a new car cost per pound?” There may be some relationship between a car’s cost and its weight, but nobody ever asks that question about cars. Whether it’s for existing or new homes, the cost per square foot has become so common throughout real estate that I decided long ago that this is a perfectly reasonable way for people to understand the cost of a new home.

When we discuss costs per square foot to build a new home, we like to explain that it is driven by three key factors: Size, Style and Level of Finish. There are some other factors that are often site specific, such as waterfront and acreage locations, which are topics for another blog post that I'll tackle later. For now, lets start with the basics of Size, Style and Level of Finish. Here is why these three areas are important.

Modern style home with high level finishes

1) Size: The size of a home matters when you think about cost per square foot. A 4,000 sq ft home will cost less per square foot than a 6,000 sq ft home. That may seem counter intuitive, but think about it this way. Both homes have one high cost kitchen. In the larger home, this high cost is spread over more square feet than the smaller home. Those additional bedrooms are low cost to build so the average comes down in the larger home.

2) Style: Depending on what style you prefer, it will impact cost. For example, Mediterranean and Coastal style homes tend to be more expensive than Craftsman or Farmhouse. This is due to the higher cost tile and metal roofing and other elements like iron and detail interior trim that are in Med and Coastal style homes. It's not to say that a Craftsman or Farmhouse can't be high cost, but typically there are certain style homes that require much more expensive items to be true to the style.

3) Level of Finish: This is likely the most obvious cost driving lever. Every area of a home (Flooring, Cabinets, Appliances, etc) can vary in their level of cost. For example, carpet is much less costly than wood or stone flooring. Five inch baseboards cost less than seven inch. GE Profile appliances cost less than SubZero and Wolf. Bottom line, the level of finish you select has a significant impact on the cost per square foot.

Transitional style home with high level finishes

Now that we have the three basic levers that can be manipulated, to get some actual costs, we believe it's best to use examples. Lets assume a 4,000 square foot living area home with Coastal style and mid-level finishes. The cost of this home might fall in the $250-300 per square foot range or $1-1.2M range.

While another example, we could use is a 5,500 square foot living area home with a Modern/Transitional style and high-level finishes. The cost of this home may fall in the $300-350 per square foot range or $1.65-1.925M range.

We could go on with many different examples using these 3 levers of Size, Style and Finish, but keep in mind that the these costs examples are estimates only as of the date of this blog post and they do not include land cost, financing/closing expenses, property taxes, insurance or unusual site conditions like mentioned earlier. For more accurate ranges, it's often best to discuss your size, style and finish levels with a couple of local builders to obtain a range that is specific for your situation and location. Bottom line, the cost question is clearly a fundamental first question to be asked, but understand that there are a variety of levers that you, as the homeowner, and your design/build team can utilize to work within your desired budgets.


“I have known Jon for many years. He and his team at Owners’ Ace are an invaluable resource to anyone looking to design and build a custom home. Having their assistance makes a complex process so much easier and successful. I recommend Owners’ Ace to my clients and to anyone looking to build their dream home.”

BG Holmberg, Top Custom Home Realtor in Tampa Bay Area

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