The Price Per Square Foot Problem

Photo by  Kelly Sikkema  on  Unsplash

Read: 2 mins.


This is often the first question people ask when they’re looking to price their project because it’s how we’ve all been taught to evaluate the cost of construction.

Perhaps it’s because construction is muddled with multiple professionals, each bringing to the table their own set of technical expertise, commonly known as jargon. But anyone can make a quick calculation.

Knowing you can multiply the total home square foot by the price per square foot, it can seem like an easy and concrete way to measure value.

But it’s anything but concrete.

Often overlooked factors include the type of building site (flat or steep lot), building footprint (for foundation and roof size), type of foundation, type of building envelope construction, house styles (modern, craftsman, contemporary, etc.), interior and exterior materials, the range of finishes, and size and number of kitchens, bathrooms, balconies, etc., just to name a few.

Conversely, when a Licensed Residential Builders (LRB’s) get asked what their $/sf. is, it tells them that the person asking is trying to compare builders (or houses as previously mentioned) and you can’t provide any kind of meaningful comparison based on a $/sf model.

However, the answer you might get is “it depends”. It’s not a cop-out - it’s the truth.

What determines the true cost of the home is an honest, accurate and detailed budget from your LRB and it’s never the lowest given. Anyone that gives you a price per square foot without asking you a huge list of questions and a detailed budget probably isn’t giving you reliable information.

This poor information leads to unrealistic expectations, which can make for a less than desirable home build experience. Cue the horror stories of excited clients building their dream home with the low bidding LRB only to have that number continuously increase during the build.

The bottom line is that a $/sf. model is a false sense of a low cost to build. It’s easy to mistake cost for value. Real value is measured through factors like the type of construction, the contents, the finishes, and the quality of the build - not based on a calculation.