First, let’s differentiate between custom renovation and production home building because per square foot costing applies to a commercial real estate model.
Production Homebuilding
In production homebuilding, the house is a commodity. The unit price is linked to volume. The product must contain a prescribed number of finished square feet to fulfill market expectations. So an appealing 3,300 square foot suburban home with four bedrooms and 2.5 baths may start at $500,000. That's about $165/sf. An almost identical home by the same builder sized at 2,220 square feet may list for $515,000. Now we're at $230 per square foot. So. Smaller house = less square footage = higher cost per square foot. Hmmm…..
Custom Renovation
Rarely will a custom renovation in Washington exceed 1,000 square feet. A two-story addition, designed to provide room enough for a master suite, family room and open kitchen, will usually require a minimum 700 square feet of new space plus refurbishment of 300 square feet of existing space. That could easily start at $350,000. That’s right. Start at… Then you need to add costs for custom kitchens, baths, flooring, lighting, windows, doors and trim sets.
Big Difference
- Custom renovation is design intensive and content rich. A lot of quality is packed into a relatively small footprint. This involves building new space, reconstructing old space and getting the two to fit together beautifully as a whole.
- Production home building is based on volume and repetition. One design and set of materials -with variations- is reproduced over and over.
- In renovation, the product is developed collaboratively by the customer and the design/build team. And. You live where you want to live.
- In homebuilding the product is delivered to the customer. And. You have to live where the builder put the house.
Final thought: The new home model is a prix fixe menu. The renovation model is ala carte.
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