Released September 2, 2011
SPRINGFIELD, Mo. - Determining the per square foot cost of building a home is not a simple matter according to Jeff Barber, housing and environmental design specialist, University of Missouri Extension.
"There are a lot of variables that can impact that cost of home construction," said Barber. "Even natural disasters can impact the availability of plywood, for example, or even labor. There are also factors that impact supply and demand, like in an area like Joplin."
Cost per square foot in your area
To determine the per square foot cost in your area, Barber says it might be possible to get some historical data from the nearest Home Builders Association.
"I think the only way to determine a cost for construction is to request three bids on the same set of drawings and specs, with a full disclosure of the scope being bid and exclusions," said Barber.
The question of average cost has come up in the city of Joplin, following the massive tornado that struck there and wiped out entire neighborhoods.
"In the vacuum created by the disaster in Joplin, pricing is going to be very irregular and likely much higher than in a stable market due to the shortage of materials, quality contractors and skilled labor," said Barber.
Control square footage rather than total dollars
Getting potential homeowners to use an approach that manages the budget by controlling square footage, rather than total dollars, can result in the best price control, according to Barber.
"I might suggest that the person requesting the cost information might be wiser to focus on the 'fit' of the subject house in terms of the persons living in the house, the space they actually need and a prioritized list of features that the owner desires," said Barber.
Another important aspect that the builder and owner should consider is the features that will help reduce the cost of insuring new construction in Joplin.
For example, Barber says rates will likely increase greater than the national average in the Joplin area due to the increased assessed value of the new construction and the 'threat' present in this tornado prone area. Considering this, features like a safe-room or overall storm resistant building methods may become advantageous, but add to the overall cost.
"I would be very cautious about ball parking the cost of construction in Joplin using a square foot approach because there are just too many variables," said Barber. "This is difficult in the best of times because invariably the owner and builder get to the point of finishes, cabinetry, appliances and other incremental choices and can easily be up sold in a way that can add several dollars to each square foot and ultimately blow the budget off the table."
That is why Barber believes three bids on the same scope as defined by plans and specifications is the best practice to determine a legitimate estimate of construction cost.
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University of Missouri, http://agebb.missouri.edu/news/swnews/queries/showall.idc?story_num=6025
Source: Jeff Barber, (417) 881-8909
Writer: David Burton, 417-881-8909, burtond@missouri.edu
