Building costs are closely tied to the number of square feet in a house. As the size of a house increases, the cost per square foot goes down as you're now able to spread the costs. Things like excavation, the foundation and exterior envelope, heating and cooling systems are more cost effective when shared across more square feet.
For example our home in Scottsdale, Arizona is two stories. The main living floor upstairs is 1700 square feet and needed a new four ton heat pump a few years ago. Now we need to replace the heat pump on the lower level which is just under 1300 square feet, so it will be a three ton unit. You might think (hope) the smaller 3-ton system would be significantly cheaper but it's not … as all the other parts, plus the cost of installation are the same.
Building costs are also affected by the complexity of the house design. For example, in the photo to the right, rather than a room that's rectangular with 4 vertical corners, there are at least 10 corners although you can only see 7 in this photo.
- Square or rectangular room has four inside corners.
- The bay window here adds two outside corners where the wall cuts in and these are really optional.
- Bay window adds four inside corners – one each on the ends of the window plus two where the three panels join each other.
So hopefully you recognize there's a lot more work involved in building extra corners. You've got more measuring, cutting and installation of materials for each wall section – the horizontal joists, drywall and then the baseboard trim. And yes, there will be extra material costs too.
That's a fairly simple explanation of building complexity and it's hard to visualize if you're not familiar with home construction so let me use an example everyone is familiar with (and can easily try at home).
What We Can Learn from a Brown Paper Bag
Let's start with a simple, brown grocery bag. Have you ever taken one of these bags apart?
While these bags are stored flat, it's almost magical how they take shape when the clerk at the grocery store sticks their hand inside to open it up (yes, Trader Joe's where I got the bag above, uses paper bags because they're more environmentally friendly than plastic).
Brown paper bags are made from a single piece of paper cut, folded and glued just the right way. It's pretty amazing what engineers can invent with enough motivation which happens when they have millions of grocery bags to make. So looking at the photos above:
- At the top, I've separated the vertical seam from top to bottom.
- In the middle, it took more care to split apart the various folds and seams making up the bottom of the bag.
- At the bottom, you can see the single piece of brown paper!
The point is there's only one piece of paper and only one vertical seam when the bag is assembled. The bottom is a bit more complicated with extra paper cuts and glue.
Challenges of Construction & Building Costs
With different materials come different challenges. How would you construct a bag, similar in shape to a grocery bag, with pieces of construction paper?
- Where would you place the vertical seams (corners in a house)?
- How would you overlap the paper to glue them together?
- Would all the pieces remain the same size or would you cut some?
Getting a little complicated? Hopefully it provides some insight into the challenges and building costs of home construction. But trust me, it's hard to truly grasp the enormity of “simple decisions” until you've built a house or lived through a major remodeling project.
Here's a simple example from a house we built early in our homeowner journey. The revised blueprints were done, the contract signed, excavation was underway and they were starting to work on the foundation. We talked to our builder every morning and after settling into a routine where we learned to say “we're not budging on this one …”, things went fairly smoothly.
When it was time to order the framing lumber, our builder Gunnar asked ” … are you okay with eight foot ceilings because the plans are drawn with seven and a half foot ceilings?” We were surprised and quickly agreed to the change once we understood the added time and cost to cut every floor joist down. Until that day we didn't understand that standard lengths of lumber are 6, 8, 10, 12, 14, 16, 18, 20, 22 and 24 feet. And standard doors and windows are built to fit 8, 10 and 12 foot ceilings.
Building Costs Start with Square Feet
Calculating square foot costs is a fascinating exercise as everyone uses different algorithms. Homeowners are most familiar with the square footage quoted in house listings on various websites like Trulia, Redfin and Realtor.com (which should not be confused with the MLS, which remains restricted to access by Realtors ®).
There are many calculations that go into building costs, with linear feet and square feet the most common way of measuring quantity for things like your:
- House foundation which includes the walls (linear feet) and slab (square feet).
- House siding (linear feet times height for one or two-story, and interior ceiling heights).
- Roof is actually estimate as the number of squares, where one square equals 100 square feet of roof to be covered. That's because most roofs are pitched and exceed the square feet of living space below.
- Square feet for flooring which is often divided up for different floor materials – at a minimum, wet (entry, kitchen and bathrooms) and dry (living space, bedrooms and hallways).
- Drywall is fascinating as it covers walls (linear feet) and ceilings (square feet).
- Heating and cooling are based on cubic feet, so don't be surprised at the difference between 8 and 10 foot ceilings.
Building Costs Impacted by the Number of Corners
The house with 6 corners (house designs below) might be cheaper than the house with 4 corners because there are fewer square feet inside to frame and finish (drywall, electrical, heating, etc). What you won't see is that the roof on your 6 corner house might cost the same or even more because your home builder might have to “stick build” part of the roof rather than using all prefabricated roof trusses.
The complexity of your house design affects more than initial building costs. Using the roof as an example, every extra seam introduced by a “doesn't this look nice” architectural bump out or functional dormer, adds more risk that rain water will penetrate the roof and cause water damage that needs repair. The cost to replace the roof will also be higher so it's wise to understand …
Total Cost of Home Ownership =
Initial Building Costs +
Maintenance and Repair Costs +
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Want more tips on building and remodeling costs? Here are some of our favorites:
- 3 House Building Mistakes to Avoid
- Tips for Buying House Building Materials
- Great Home Remodeling Books
- Pick A House Addition That Make Sense
I’d like to add a question… how would you compare costs on a second story with 8′ walls and flat 8′ ceiling to 4′ or 6′ walls with dormers? Which design is less costly?
Ann, Fun question as I look at things differently I guess, given my experience running a handyman business. But first let me answer your questions …
I’ve built a house, put a 4-story addition, major renovation & lots of kitchen remodels … plus 8 yrs with my handyman business. I’ve never added a second floor to a house but on average, know that many project costs are split roughly 50/50 between materials & labor. Think about your question & how you’d build the house with Lego blocks. You’d need more blocks AND more different sizes of blocks. You’d also have more work to figure out how to build the dormers.
Fancy roof angles are one of my hot buttons. They don’t give you extra living space but they do add risk & potential cost from roof leaks. As noone sees the top of your roof and little is visible from the street, I prefer simpler roof lines to reduce ongoing maintenance costs … and if you have to use dormers, why not one big one versus 2 or 3 little ones?
Thank you for the insight. I’ve always been aware of this info but what I don’t understand is how to recognize the tipping point of where more square feet on a simple design is cheaper than less square feet on a more complex design.
In other words, at what point is just a bumpout or dormer less cost effective than adding more square feet with a flush wall or roof without dormers?
Ann, Finishing space inside your existing home is almost always less costly. You don’t need foundation or roofing (maybe a little). Attics tend to cost more in order to build real stairs while basements have them although they may not meet code. You might want to do some research at Hanley Woods Cost vs Value website, as they’ve got typical costs & ROI for different parts of the US.
Tina, this was very interesting! I didn’t realize that some simple changes could cut costs significantly. I learned a lot and look forward to reading more.
Yes Benjamin, it’s fascinating to listen to some of the debate between architects who draw beautiful designs that are impossible or ridiculously expensive to build … with the builders/remodelers who then have to deliver the bad news to homeowners. You want great flow inside you home, nice curb appeal but you also want it affordable & easy to maintain (roofs with too many valleys are a nightmare).
I appreciate the diagrams showing the corners and corner count. But I’m still confused as to more complex structures, such as bay windows. My HOA calls for the front of the home to have a minimum of 6 exterior transitions, each to be at least 90 degrees and 4 feet.. I do NOT understand how to count!
A bump out would be easy with it’s 90 degree corners. But the bay angle is greater than 90 degrees, but the angled sides aren’t 4.’ Where do I resume counting?
Barb, I can see why it’s confusing so let me try to simplify the counting. The angle of the corner doesn’t matter, e.g. whether 90, 135 or 150 degree. The idea is you can’t continue running a straight piece of trim along the wall because it angles in or out. So from your wall bumping out to the bay window, there’s an inside angle … and when the side windows connect to the center window, those are outside corners. So one straight wall with a bay window (3 window sections) would be 4 corners.
I’m not sure what your HOA is looking for with 6 exterior transitions, each at least 90 degrees. Your bay window would count as 2 so my best guess is they want some type of decoration around the front door (2 transitions) and 2 more is tough if there’s not linear room for a second bay window?