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How much to build a house?

Discussion in 'General' started by gixxernaut, Sep 28, 2022.

  1. gixxernaut

    gixxernaut Hold my beer & watch this

    We recently got a letter from our homeowners insurance recommending that we consider how much recent inflation has effected the cost of building materials, yada yada. Says they "Automatically increase coverage at each renewal to account for normal inflation but ... extraordinary inflation conditions ... may not be enough to rebuild your house if the worst happens." Invited us to call and discuss with our agent to ensure we're fully protected.

    A lifetime of experience has taught me to be wary of getting all of my information about something like this from the very person who stands to profit most from every increase in my premiums. So I reach out to this august band of experts on everything from epidemiology to motor oil.

    Realistically speaking, how much does it cost these days to bulldoze the remains of a demolished house and build a new one in its place? 3 bedrooms, 2 baths, about 1100 square feet of living area in a 2 story structure on a sloping lot.

    We also have a detached garage (24x24) with a 24x24 bonus room above it on the same property along with a couple of other structures. One of those was built in 2020 during the height of the pandemic so I saw first hand how expensive materials got while getting that project completed.
  2. omatter34

    omatter34 Well-Known Member

    Where do you live? Also, keep in mind that your detached garage is under a different coverage than your primary structure. Generally speaking increasing your Dwelling coverage will also increase your Othwr Structures, but it may not be sufficient as it is just a percent of the Dwelling.
  3. fastedyamaha

    fastedyamaha Well-Known Member

    Sounds just as fishy as buying “gap” insurance for your brand new car!
  4. StaccatoFan

    StaccatoFan Alex's R3 Crew Chief

    Sounds like a weak fuckin try to raise your premium and make more of your money theirs. If it were me, I’d do some insurance shopping to compare rates and switch if you find better.
  5. Big T

    Big T Well-Known Member

    Keep in mind that increasing your building limit 25% will not raise your premium 25%.

    Most likely, your carrier has seen a number of losses recently that exceeded the building limit.

    The only thing worse than a major loss is finding out you're $50-100k out of pocket to rebuild.

    Currently, it's $350-400/sf to build around here. Plus, you need to consider demolition, asbestos removal, debris removal and code upgrades.
    omatter34 and Montoya like this.
  6. Once a Wanker..

    Once a Wanker.. Always a Wanker!

    Building a new house has gotten more much expensive in the past 10 years, and will likely increase dramatically again after this storm season is over. I've increased my insurance coverage on the houses I own in the past couple years.
    mpusch likes this.
  7. Phl218

    Phl218 .

  8. deathwagon

    deathwagon Well-Known Member

    Another consideration is the possibility that you won't be able to hire anyone to rebuild. There's a multi-year waiting list in my area. I'm sure the new mortgage interest rates will temper that to some degree, but demand is still crazy and there are plenty of cash buyers with no need for a mortgage.
    Montoya likes this.
  9. Venom51

    Venom51 John Deere Equipment Expert - Not really

    Here's what I know. 20 years ago when this place was built the square footage cost was about $80 a square foot. You can't by the concrete it sits on for that anymore. You are looking at $180 to $210 a square foot to replace the exiting structure as it stand. We upped our twice in the last two years.
  10. pickled egg

    pickled egg We need moah buttah

    Just hop a flight to Maaaatha’s, they’ll put you up ;)
    CBRRRRR999, TurboBlew and StaccatoFan like this.
  11. TurboBlew

    TurboBlew Registers Abusers

    I see a number of new construction builds every day.
    National tract builders like Ryan & KB price an entry level 2600 sq ft home at 285k. Then you have higher end builders like Providence that cost double
    + that. The price advantage they have is all the lots are groomed by a civil site contractor which amounts to about $2500/per house.
    Material costs have stabilized but are double from 2020... when a sheet of 7/16 osb was <$6 retail. Concrete is up ~40% a yard.
    Also those builders get a volume discount on the engineering which could run about $4500 for a walk in.
    Boman Forklift, MELK-MAN and Phl218 like this.
  12. Montoya

    Montoya Well-Known Member

    The National Association of Homebuilders declared just a short while ago that while prices of supplies have come down some, the cost to build is still 40% higher than just a few years ago. While rates are raising, most good contractors still have a 6M to multi-year waitlist, which means you’ll paying a premium or going with questionable choices if you need to rebuild after a disaster. Location/region is of course a huge factor. This hurricane will further challenge the supply chain and likely spike costs back up again.
  13. How long is a string?
    gixxernaut and Montoya like this.
  14. Motofun352

    Motofun352 Well-Known Member

    Get "replacement cost" coverage. Automatically adjusts to the market. Plus secondary living expenses while under reconstruction.
    Montoya likes this.
  15. peakpowersports

    peakpowersports Well-Known Member

    Its not really a straight forward question. You could build that house for $200,000k or $1,000,000... just depends on what you want. Basic stick built w/ cheap windows, roofing, siding, insulation ect? Or full on masonry w/ imported marble bathroom, 12 foot ceilings, 10 inch crown molding ect.

    I'd say an avg for a well built home would run approx. $225 per sf.
    BigBird likes this.
  16. omatter34

    omatter34 Well-Known Member

    Simply having an RCV policy does not guarantee your limits are sufficient. This is a common misconception.

    If my house is insured for $300k on Cov. A and it burns to the ground and will now cost $350k to rebuild, even an RCV policy will max out at $300k for the rebuild of the dwelling itself.

    Of course, there are exceptions to this as some policies come with additional coverages that can increase that limit, but simply thinking that "if you have an RCV policy, you are good" is incorrect.
    Boman Forklift and BigBird like this.
  17. eggfooyoung

    eggfooyoung You no eat more!

    Well I'll be a motherfucker...

    I'll be using this when clients ask me for costs out of thin air and hand waving.
    Gorilla George likes this.
  18. Phl218

    Phl218 .

    tree fiddy of course
    Gorilla George likes this.
  19. :crackup:
  20. gixxernaut

    gixxernaut Hold my beer & watch this

    Yes I know this is/was an open ended question. In spite of that I feel like some good input has been forthcoming in this thread. I rewrote the OP about a dozen times, each time delving into lengthy specifics about our place, then backing it out and starting over.

    Every situation is unique to be sure. Ours is an old house constructed in 1945 and has been added onto several times since it was originally built. Hell, the office I'm sitting in as I write this is one I built myself.

    It's a difficult question for someone like me to figure out. We live in an area of Nashville Tennessee where real estate prices have gone totally insane. We bought this place for about $90k in 1998 and now we're paying property taxes on $900k. And all that appreciation is worthless to us because if we're selling we're buying anyway and have no desire to relocate. I guess I just figured there were some contractors here who might have the expertise to offer solid input on what they might do. Nearly every old house in our neighborhood has been demolished and McMansions (or two "tall skinnies") have been built in their place. There are people out there who know how much it costs to do this sort of thing and they do it for a living.

    Honestly I expected the first answer to be tree fiddy. :p

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