Now Is A Great Time To Build: November 29, 2010 by F. Dollar
I just completed a bid out on a new 3,250 sq. ft. (Under Roof) home for one of my customers. I did the same bid package in December 2008 for the same client in the same geographical area and the same house plan. Once I completed the latest cost gathering I compared the two Excel Sheets and as I guessed now is a great time to build a new home. The costs on average were 20% (rounded) lower than the home in 2008. Across the board all cost categories were lower. The best savings was overall in the subcontractor labor costs. Not surprising as most contractors are digging deep to survive the current economic situation and are willing to work for less to survive. There was no land cost or soft costs as the clients already had their lot purchased and paid for. I know for a fact that if you add into the formula the lower Lot costs currently out there you will get even greater savings over all.
To get the best savings get three bids on each item and then select the two top bids. Work them against each other and watch the savings appear. I always make my suppliers and subcontractors work hard to get my jobs and you should too. DO NOT be shy as we are talking about your money and your house budget. A quick story: One day when I was setting up to build a new spec house and soliciting bids I was in my office haggling hard with one of my best lumber suppliers over the framing package including windows and doors. The process went on for more than an hour. When I hung up the phone my secretary came into my office and said “You were pretty hard on him” My reply was “I know, but where else could I have gone this morning and made over $5,000.00 in an hour”
Play tough but always be fair and respectful. Never take the first or second offer. Keep pushing in a nice concerned manner and you will save some substantial money on your house and the bidder will make a sale and a profit to go with it. Don’t and you will pay retail and the bidder will be the one making big money not you. As a builder some of the highest returns on spec homes I earned were those built during economic slowdowns so as the title states “now is a great time to build that dream home!
Here is a link to the National Association of Home Builders (NAHB) Median and Average Price per Square Foot Costs by Region.
Reference: 2009 Regional Costs