Understanding average new home building costs can be extremely confusing. For one thing most websites vary considerably when discussing average costs. This is because what constitutes average is very hard to define. There are huge differences between the cost of an economy home and a luxury home, and also between all the various quality levels in between. Adding all the prices of all the homes built in your state during a given year, does not reflect well what your home will cost.
Additionally there are a lot of variations in prices between states, and even between cities and between cities and counties.
Why do Average New Home Building Costs Vary so Much?
Average New Home Building Costs: Comparing Southern California to Rural South Carolina
How can you compare the construction in these two states? Imagine the average South Carolina home. Already it gets hard because you have both gracious southern mansions, and tiny weatherboard cottages, and a lot of other kinds of houses in between. What does the average home in South Carolina even look like? Even South Carolinians cannot agree.
Now consider California. Hollywood homes of the stars are certainly different than the homes of average Californians, but most would agree that they all pay more than the residents of South Carolina, not only for housing, but also for food, and labor. Now consider the average wage in South Carolina compared to the average wage in California.
Average New Home Building Costs: Local Wages are a Major Factor
It was once said that someone in California, with a six figure income could not afford to buy a house. The South Carolina retort is, “You can qualify for most of houses around here with a six figure income, but you won’t find a job paying six figures here.” Thus the local economy determines the cost of home building to a large extent, especially the cost of skilled labor.
The fact is that the average cost of construction in California is about $130 per square foot, and many homes cost a lot more than that. The average cost per square foot in South Carolina is around $80 per square foot, but why is that? Is the cost of labor the whole story? The easy answer is no.
Average New Home Building Costs: Degree of Luxury
In California most homes contain more luxury, from extravagant plumbing fixtures to the fancy tiled roof. The likelihood that a pool might be included in the construction price is far lower in South Carolina as well. The most confusing fact is that one could build an $800 per square foot home in South Carolina or an $80 per square foot home in California, but averages are deceptive of this fact. Averages reflect the number of extreme cases on either end of the spectrum, if they are a significant demographic.
Average New Home Building Costs: Different Locations within a State
Certain locations within each state have more expensive construction than others. Costal South Carolina has many luxury homes, while some inland towns have a lot of low cost budget housing. In California, the idea is similar. Some areas attract luxury homes, while other areas feature more modest housing. The ratio of luxury homes to budget homes deeply impacts the average cost per square foot. Extreme luxury homes also throw off the average, when compared to more modest luxury homes. There are degrees of luxury.
Average New Home Building Costs: The Number of Do it Yourselfers
Additionally South Carolina residents are much more likely to participate in the construction of their homes by purchasing a shell, or by being their own contractor and doing a lot of the work themselves. In some highly populated areas in both states home building contractors are more expensive and tend to handle the whole job without involving the home buyer.
Most states tend to fall between California prices and the cost of homes in the southern United States, leaving a range of $75 to $130 per square foot as an average, however homes built in the United States as a whole could vary in extreme from less than$20 per square foot for a do it yourselfer building a remote cabin, to $1000 per square foot for an extremely luxurious home. For more information on average new home building costs, see our many other articles on the topic, and download our free 98 page book.