About: Nancy

You have decided you want to build a new home to reflect your current needs and lifestyle. I commend you for making that decision. Maybe you need to find a lot in a neighborhood or in the country or you may already have land to build your new home. No matter your current situation, the lot or land you want to build your new home on does impact the price to build that home.

Utilities
What utilities are offered at the property? Electric and natural gas hookups are typically charged by the foot. For example, Consumers Energy charges a flat fee to install the electric & gas plus an additional $4.50/ft. to trench + $3.00 per foot winter charge if the work is to be done during frost season for both utilities. On property A, the gas and electric service needs to run 45’ so the additional cost would be $202.50 normally or $337.50 if installed during frost season. On property B, the gas and electric needs to run 200’ because you want the house to sit farther from the road. The additional cost in this scenario would be $900.00 normally or $1,500 if installed during frost season. The difference in price between both properties is $697.50 or $1,162.50 respectively.

How about water and waste? Does the property have city water and sewer or well and septic. If the property has water and sewer the municipality charges a tap fee. Tap fees can run $2,000.00-$4,000.00 for sewer and $5,500.00 + for water. Both will also have a monthly service charge. In addition to the tap fees for water and sewer and monthly service charges, there is also the cost to install the services. Installation is a per foot cost as well so just like your gas and electric scenarios the farther from the road a home is built the more costly the install will be. If the property needs well and septic systems, the costs involved include the permits from the county health department plus the cost to install the well and septic system. Wells can run from $5,000-$10,000 depending upon the type of pipe material (PVC vs. galvanized), size of pipe and depth of the well. The pressure system used, whether it be a conventional blader tank or a constant pressure system, also impacts the price. Septic systems can run from $5,000-$20,000 depending upon the soil conditions, number of bedrooms and whether a garbage disposal will be installed. The county health department determines the required system the septic company will have to install.

Topography
What does the land look like? Is it flat, rolling, steep hills, wooded, cleared, wet, difficult soil conditions, etc.? The ideal site from a builder’s stand point is a flat or slow rolling lot with a low water table, sandy soil and clear of any trees. Once you start adding in road blocks to the ideal site you start adding dollars. If you want to build in the middle of trees, trees will need to be removed and hauled away. If the site has a high-water table, engineering may be involved to stabilize the structure. You may not be able to have a basement or a lot of dirt would need to be purchased and hauled to the site in order to have a basement. This could cost in the tens of thousands of dollars. If the soil is clay, a lot of excavation work would need to be done to remove the clay plus the cost to bring in fill dirt to put around the foundation. Again, this may cost thousands of dollars. How far away from the road do you want to build the house. Depending upon the type of driveway that will be installed, asphalt, concrete or gravel, the longer the driveway the higher the cost.

Associations
Do you want to build in a neighborhood that has an association? Associations can be a double edge sword. In one respect it is great to have rules and regulations to maintain consistency and property values. On the other hand, the rules and regulations may require certain house sizes, specific exterior design requirements such as roof pitches and style and particular building materials to be used. All of these rules can and will have an effect on the price to build your new home.

Taxes
Even though property taxes do not impact the price to build your home, it will cost you annually. Where you build, municipality, and amenities by your property will play a role in determining your annual property taxes. Some municipalities are higher than others depending upon the services they offer. Cities are typically higher than rural areas so make sure you take this into consideration for annual home costs. If this could impact your home affordability you can contact the assessor’s office and ask them to give you a ballpark figure for property taxes based on a particular property and estimated home value at the current tax rate.

Hopefully after reading this, you have a better understanding on why not every property is created equal and the property you choose may have a huge impact on what it will cost to build your new home.

How much per square foot does it cost to build a new home? We get this question all of the time as I’m sure most builders do. The short answer is “it depends.” As a buyer, I am sure you are thinking “that is not an answer.” Unfortunately for builders and the buyers “it depends” is the truth. There are so many factors when building a house, it is difficult to give a price per square foot unless you are duplicating a home that was recently built with the same features, materials and similar homesite. Let’s breakdown some of the reasons for the “it depends” answer.

Homesite and Utilities

The homesite can play a factor in the pricing. Whether you want to build on a site you own or want to purchase, site conditions impact the price.

•        Does the property have a lot of trees that need to be removed?
•        What are the soil conditions?
•        How much dirt needs to be removed or does a lot of dirt need to be brought to the site?
•        How far will the home sit from the road?
•        What utilities are available – water and sewer or well & septic, natural gas or propane?

All of these questions will need to be answered to determine their price impact on building a new home.

Size of the Home

The larger the home the lower the cost per square foot. The reason for this is the main components of the home are amortized over the entire space of the home.

For example: If the home has a basement, the cost of the basement is divided by the square foot of the home. Let’s say the basement is exactly the same size for these two scenarios:

House #1
2000 sq. ft ranch
Basement cost is $40,000
40,000 / 2000 = $20 per sq. ft.

House #2
4000 sq. ft. 2-story
Basement cost is $40,000
40,000 / 4000 = $10 per sq. ft.

It is less expensive to build up than it is to build out. This is why 2-story homes are less expensive per square foot than ranch designs. If you have an unfinished basement, this is the least expensive space to finish per square foot. The reason is the main components are already there: the concrete walls, the concrete floors, the ceiling joints holding up the main floor, etc. These prices were factored into the finished floor space above it when your home was being built. Whether you decide to finish the basement when building or wait and finish it several years after you moved in, this is easy and inexpensive space to finish in the grand scheme of the entire home price and value. In Michigan if you have a finished basement, it definitely adds value to your home on top of the additional square footage you added for less money per square foot.

Architectural Style of the Home

There are a wide variety of home styes. Sometimes the style is strictly personal preference and taste while other times the style may be determined by the location you want to build due to restrictions. A few examples of home styles include: Cape Cod, Craftsman, Colonial, Contemporary, Farmhouse, Modern, Tudor and Victorian.

Simple boxes are the least expensive to build such as the Colonial. Once you start getting into numerous corners, steep roof pitches, arches, angles and multi-exterior finishes it adds to the cost of the home. This is due to the complexity of the design and the materials used.

Features and Materials of the Home

This is where it gets interesting. A home has many parts and components used in its construction. The materials used do matter when it comes to cost. Think about how many types of cabinets, countertops, floor coverings, plumbing fixtures, light fixtures, shingles, appliances, doors, windows and so much more are offered by all of the different manufacturers. With most manufactures, they offer different product lines and each line is a different price. The price difference may have to do with a particular style, color or components used, or time it takes to make the product.

Here is an analogy that may help you understand. You want to purchase a new full-size SUV and you have narrowed it down to one made by General Motors. The versions offered are the Chevy Tahoe, the GMC Yukon and the Cadillac Escalade. All of these vehicles are the same size, body type, structure and manufacturer. So, with the large price difference what is the difference between the three vehicles? The features and materials used are the difference. The Chevy Tahoe is a base model with standard materials & features. The GMC Yukon has more features and upgraded/mid-grade materials used compared to the Chevy Tahoe. The Cadillac Escalade has the premiere features and high-end materials used to make the vehicle compared to the Tahoe and Yukon. This is why the Yukon is more expensive than the Tahoe and the Escalade is the most expensive of the three.

Home building is similar to vehicles. However, instead of having three distinct levels like the vehicles, homes can have so many more levels and mixes of products. You could select low, mid or high level when it comes to materials depending on your price range or you can mix and match to get what is most important to you. If money was no object, most people would select the best of the best. Unfortunately, most buyers do have a budget when building a home. If budget allows, it is usually best to go with higher quality materials on the difficult to change items such as cabinets, hard surface flooring and windows. The other items that are easier to change, such as plumbing and light fixtures, select lower priced materials and then change them later when you have additional savings.

There are so many factors involved when building a home. The size, style, features, materials used and homesite all play a factor in determining the price of a new home. Hopefully, you now have a better understanding of why “it depends” is the answer to “how much per square foot does it cost to build a new home?”

NAHB Identifies Top Features and Design Trends for 2021 in the Wake of COVID-19
After declining for four years, a number of key trends — including the average size of the home and the number of bedrooms and bathrooms — reversed course in 2020 as a result of shifting buyer preferences in the wake of COVID-19. The average size home remained flat at 2,486 square feet, while the percentage of homes with four or more bedrooms and three or more bathrooms rose to 46% and 33%, respectively — rising closer to 2015 peaks.

“The primary reason is that COVID-19 has led a segment of home buyers to desire larger homes and to move out to the suburbs,” said Rose Quint, NAHB assistant vice president of survey research.

An increased number of rooms within the same footprint means home owners are becoming more creative in how they use the space within their homes, and using features such as windows to help make these spaces feel larger.

“The space works harder rather than larger,” said Donald Ruthroff, AIA, principal at Dahlin Group Architecture Planning. “Open spaces are better defined, and spaces are flexible.”
“New homes are gaining popularity as well, with 60% of buyers preferring new homes — the highest level since 2007”. Quint attributes this increased interest in new homes to three key factors.

“One is the absolute lack of existing home inventory,” said Quint. “Two is buyers are concerned about touring other people’s homes. And last but not least, new homes are more likely to be located where buyers want to live.” She noted that outlying suburbs are the most popular geographic location, driven by increased interest among minority home buyers.

NAHB also examined preferences among buyers to help builders determine what features are most likely to resonate in the market in 2021.
The top features desired include:

• Laundry rooms
• Exterior lighting
• Ceiling fans
• ENERGY STAR windows and appliances
• Patios and front porches
• Kitchen double sink
• Walk-in pantries

Outdoor spaces such as patios and front porches allow home owners to utilize more space, Ruthroff added, with the connection between indoors and outdoors continuing to become more seamless. Builders at every value level should consider how to integrate such connections into their homes, and incorporate detailing that helps to dress up these spaces.

NAHB also asked recent and prospective home buyers how COVID-19 may have impacted their housing preferences. Although the majority (67%) did not feel the pandemic had an impact, a quarter did feel their preferences had changed because of COVID-19, with households that have at least one teleworker and one virtual student being the most likely to feel an impact. Such households are also the most likely to desire a larger home.

Additional information will be available soon in NAHB’s latest edition of What Home Buyers Really Want.
Additional resources can be found under “NAHB Identifies Top Features and Design Trends for 2021 in the Wake of COVID-19” by the National Association of Home Builders

Good house design takes climate into account

You’ve made the decision to build a new home – CONGRATULATIONS! Now comes the fun part – House Design! Building a home that will allow you to be comfortable in either cold or heat takes a little planning. When discussing the design elements of energy efficiency, keep a few things in mind to ensure maximum comfort and minimum bills (or at least as close to minimum as you can get).

Start by knowing the ins and outs of the weather in your area.

We all know Michigan has a variable climate. It also varies dramatically from region to region. Someone building a home on the East side of the state will be experiencing different weather patterns than someone on the West side. You’ll see even broader swings if you’re building close to one of the “Great Lakes.” Prepare for harsh winters and hot summers by getting a general picture of the average rainfall, snowfall and temperature ranges for the region in which you intend to build.

Dig into the design from the ground up.

Your foundation can also experience damage from swings in weather patterns. If you intend to have a basement you’ll want to make sure it is properly poured. Winter is not the ideal time to get concrete work done. This can result in foundation weakness later if the temperature isn’t up to par when the foundation is poured. Your basement should also be well insulated. Consider “ICF” or insulated concrete forms when designing the basement. This will allow for a quality air and moisture barrier as well as reducing heat loss.

Landscaping should be properly graded. This means ensuring a slope extending out from a house foundation of about 6 inches for the first 10 feet (that’s about a 5% slope). The right landscape/grading slope means that water in all it’s forms will run AWAY from the foundation. This is not a lesson you want to learn from experience. Trust me when I tell you AWAY is IMPORTANT. Pay attention to the grade throughout the course of your home ownership. Should you find animals have burrowed down in the area close to your home, address the issue. Quickly.

And from the roof down

If snow is a major concern, consider a steeply pitched roof. The roof of your home is one of the most important factors in energy efficiency. It’s also one of the major contributors to the longevity of your home. If you develop roof leaks or other damage, the interior of your home will suffer – a lot. Snow can cause all kinds of trouble with a roof. It’s best just to ensure heavy snow loads never occur. A steeply pitched roof allows snow to slide off quickly. It also helps in preventing ice dams as there isn’t likely to be pooling and quick freezing of rain or snow melt.

If the region is prone to heavy rainfall, keep your roof line simple. It will help prevent water from backing up into your attic.

To get the most of out of your home, pay attention to window placement! Typically South facing windows are an excellent source for heat generation. In the winter months, you’ll appreciate the comfort of extra heat. In the summer, keeping the shades drawn during the day will combat a lot of the heat. Invest in thermally appropriate windows for your area. For the few North and East facing windows a home in Michigan should have, look for a window with a low U factor rating. The U factor is the rate at which a window is prone to heat loss.

Stand the test of time

The true test of a well built home is its durability. Make sure your home is designed and built by craftsmen, who understand your particular needs. Be sure to design you home to get the most benefit from the natural environment.

For more information on House Design with Watts Homes & Construction, visit our Home Building Process Page.

Be sure to follow and like us on Facebook!