The Why of Homebuilding Costs: Part I
As a builder, I talk a lot with my customers about project costs: ways to cut prices, why they’re higher or lower than anticipated, and what that money will get them. Especially when it comes to building new -- because it’s not just the price of materials and labor, but it’s also the price of what it takes to build something that fits the existing landscape and embraces the surrounding area’s spirit; to build a home that is sustainable, functional, and offers years of happiness and satisfaction to its occupants. There are several different ways to examine the “why” of home construction costs, so this is just the first in a series of posts I’m putting together on the cost of building a home.
My sister recently shared this video titled One Reason Houses Cost so Much with me, from a channel called The School of Life. The video offers a lot of reasons (why houses cost so much), but at least three big ones stand out to me. I’ll attempt to summarize here:
1: The cost of land in a quality area is higher because property values in good neighborhoods and in pretty areas of the country continue to rise. That’s a good thing if you’re a homeowner, but means spending more money on the front end.
2: Demographics matter. There are more nuclear families with fewer people in them (like mine, unless you want to count the dogs) who want a home of their own. There are more couples who choose to stay kid-free but do choose to purchase a family home for themselves. Finally, there are plenty of happily single folk who want a home of their own. And all of these different groups want nice houses, in pretty neighborhoods -- so the price of homes and building them goes up.
3: People don’t love ugly houses. About those houses in the ‘burbs -- folks may choose to buy them because they’re not as expensive, yes, but people love houses that utilize the spirit of the neighborhood around them. And more and more, today’s families want houses that are closer to the city, not in suburbs. In fact, houses that are designed with the current landscape in mind, that utilize it to the best of its potential, those are the homes that we fall in love with.
Your home is an investment from the outset. You are most likely planning on staying in it for a very long time. The investment you’re making now in your home should serve your needs for a good long time -- and in order to ensure that’s the case, any good builder should address not only cost with you, but how to get the most out of the money you’re spending. It’s not worth your time and money if you don’t know that the work will stand you in good stead for a good, long time.
Let us know your thoughts: was the cost associated with building or renovating your home worth the investment? What research did you find on the subject?