Building Costs Per Square Foot in the State of California, USA

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Building Costs Per Square Foot in the State of California, USA

CONTENTS:

  • Terner Center Building Costs in California.
  • Number of New Privately Owned Homes in California
  • Building Costs Per Square Foot for Luxury, Semi-Luxury, Best Standard, Good Standard, Average Standard and Minimum Standard Single Family Homes in the State of California.
  • List of 35 Cities in California – Percentage Deviation of the City/Town Building Cost from the National Average ($X).
  • Cheapest and Most Expensive Places To Build in California.

Newly Built Home with Large Backyard for $675,000 USD on 35412 Avenue 13 1/2 Madera in California (3) – Source Zillow

Newly Built Home for 675000 USD on 35412 Avenue 13 Madera California (5)

Newly Built Home with Large Backyard for 675000 USD on 35412 Avenue 13 1/2 Madera in California (5)

California is the most expensive state to build affordable housing due to lack of government subsidies, central cost control regulation and unwillingness of market property developers to take on unprofitable projects. Which is an irony because affordable housing by definition is supposed to be affordable for low-income earners. The San Fransisco Bay Area is the most expensive to build, followed by Los Angeles and others. Building a house in this state is about three times the national average.

The building cost index is a measure of changes in the cost of construction labour and materials in a specific region, and judging by the 5 most common construction indices in the USA – the ENR, RSMeans, Mortenson, RLB and Turner construction indices, both residential and non-residential building costs have been rising steadily at a small gradient since 2010. In 2010, the average non-residential building cost index was around 86, and the residential building cost index was a little bit lower at around 84. The non-residential building cost index had a smoothly ascending curve with no downturns, while the residential building cost index descended to about 83 in 2011, before taking a smooth upward curve.

The average annual ENR construction index in the state of California clearly shows an upward curve from 2016 to 2020, rising from 6252 to 7018 between this period without a downward turn.

Terner Center Building Costs in California

According to Terner Center, the hard costs of building in California have hovered between $150 per square foot to $230 per square foot from 2009 to 2018. Costs were around $175 per ft² in 2009, climbing to about $182 per ft² and $210 per ft², in 2010 and 2011 respectively. Building costs declined to about $175 per ft² in 2012, and $260 per ft² in 2013. They were the lowest in 2014, settling at around $152 per ft², and then shooting up to $200 per ft² in 2015. They climbed up to the highest ever in 2016, standing at $235 per square foot, before decreasing to $222 per square foot in 2018.

Hard costs of building in the San Fransisco Bay Area had a higher curve floating above the previously mentioned statewide building costs. Costs in the Bay Area hovered between $150 per square foot to $280 per square foot from 2009 to 2017, and then climbed to the highest point in 2018, closing in at $380 per square foot.

Other metrics that one might be interested in is the cost per square foot for main bills of quantities in the construction trades. In the USA, these are known as “Line Items”. The main bills of quantities assessed in the Terner Center Report are Concrete, Metals, Finishes and the group [Wood, Plastics and Composites].

Construction metals display a declining cost curve on the average with rises and falls between 2008 and 2018. The cost of metals was the highest in 2008 at $18 per square foot, falling to a record low of $4 per ft² in 2009. The costs climbed to $7.5 per ft² in 2010, and continued rising to $14 per ft² in 2011. Metal costs slowly fell over a three year period until 2014 which recorded a low of $7 per ft². The price climbed to $10 per ft² in 2015, and slightly increased to $12 per ft² in 2016. From 2016, the price fell sharply along a steep slope to $4.75 per square foot in 2018.

Concrete has maintained a stable cost curve on the average with rises and falls between 2008 and 2018. Changes in costs for concrete works have been hovering between $16 per square foot and $28 per square foot between 2008 and 2018, with 2013 recording the lowest price and 2011 recording the highest price. In 2018, concrete costs increased to a little under the highest point at around $27.5 per square foot.

The cost of Finishes has risen steadily on the overall since 2009, although costs remained stable over a four-year plateau from 2010 to 2014. The costs sharply increased from $7.5 per square foot in 2009 to $18 per square foot in 2010. In 2014, costs were around $16 per ft². They shot up to $28 per ft² in 2016, and remained stable from 2016 to 2018, closing in at $29.50 per square foot.

The combined Wood, Plastics & Composites bill of quantities is a group that saw the highest increase in costs since 2014. Initially, costs in this group were comparable and similar to Finishes since 2008. The smallest deviation from normal costs was observed in 2010, with the rate slightly edging the cost of Finishes at around $19 per square metre. Between 2010 and 2012, costs were stable, but the first major increase was observed in 2013 at $24.75 per ft². Costs fell down to $19 per ft² in 2014. The biggest increase in the cost of wood, plastics and composites was observed in 2015, with costs shooting up to $36.75 per ft², and then climbing to $42.5 per ft² in 2016. The year 2017 had the highest cost per square foot at $43 per ft². The price fell to $40 per ft² in 2018, remaining stable from 2016 to 2018.

Number of New Privately Owned Homes in California

According to CIRB and Census.gov, in 2019 the total number of new privately owned housing units in the state of California was 110,197 (valued at $26,583,348). This total can be broken down into the following types of residences. Homes with one unit totalled 58,575 (valued at $17,376,935). Homes with two units amounted to 2,476 (valued at $498,041). There were 1,694 private homes valued at $305,526 with three or four units. There were 47,452 private dwellings valued at $8,402,846 with 5 or more units.

In 2020, there was a total of 105,925 new privately owned housing units valued at $25,501,664 in the state of California. Broken down by the type of residence, there were 60,824 new private homes valued at $16,968,632 with one unit, 1,968 new homes valued at $383,891 with two units, 1,648 homes valued at $316,540 with three or four units and 41,485 new dwellings valued at $7,832,601 with 5 or more units.

According to CIRB, in 2019 there was a total of 57,688 new single family homes and 52,530 new multi-family homes, which comprised a total of 110,218 new residential units.

Building Costs Per Square Foot for Single Family Homes in the State of California, USA

In this article, we will look at the cost of building a single family home with 4 corners in California under different material specifications and quality classes. Costs last updated in December 2020. There are 6 types of quality classes for newly built private homes which are based on the type and quality of materials used. Luxury homes fall under Class 1. Semi-luxury homes fall under Class 2. Best standard homes fall under Class 3. Good standard homes fall under Class 4. Average standard homes fall under Class 5, and Minimum standard homes fall under Class 6. Note that for all types of private dwelling regardless of quality class or material specifications, the construction cost per ft2 is higher for smaller homes and lower for bigger homes. This is due to the fact that building contractors will try to get as much profit as possible from small projects to make up for losses and small break-even margins. Naturally, big building projects have a higher profit margin than small projects, so contractors are usually covered up. Although the BOQ percentage for mark-up in a big project looks small, for example 5%, the sum is big or just adequate in terms of the valuation of the project, which may be a multi-million dollar project.

Class 1 – Luxury Single Family Homes

The building cost per square foot for luxury private homes in California ranges from $375.93 per sqft to $576.28 per sqft, with the average being $443.65 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 1 Luxury Single Family Homes Building Costs CALIFORNIA

Class 1 Luxury Single Family Homes Building Costs CALIFORNIA

Class 2 – Semi Luxury Single Family Homes

The building cost per square foot for semi-luxury private homes in California ranges from $228.47 per sqft to $350.22 per sqft, with the average being $269.62 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 2 Semi Luxury Single Family Homes Building Costs CALIFORNIA

Class 2 Semi Luxury Single Family Homes Building Costs CALIFORNIA

Class 3 – Best Standard Single Family Homes

The building cost per square foot for best-standard private homes in California ranges from $147.70 per sqft to $224.33 per sqft, with the average being $172.92 per sqft. As the bar chart shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 3 Best Standard Single Family Homes Building Costs CALIFORNIA

Class 3 Best Standard Single Family Homes Building Costs CALIFORNIA

Class 4 – Good Standard Single Family Homes

The building cost per square foot for good-standard private homes in California ranges from $107.79 per sqft to $165.30 per sqft, with the average being $165.30 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 4 Good Standard Single Family Homes Building Costs CALIFORNIA

Class 4 Good Standard Single Family Homes Building Costs CALIFORNIA

Class 5 – Average Standard Single Family Homes

The building cost per square foot for average-standard private homes in California ranges from $87.49 per sqft to $133.99 per sqft, with the average being $103.17 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 5 Average Standard Single Family Homes Building Costs CALIFORNIA

Class 5 Average Standard Single Family Homes Building Costs CALIFORNIA

Class 6 – Minimum Standard Single Family Homes

The building cost per square foot for minimum-standard private homes in California ranges from $69.01 per sqft to $107.77 per sqft, with the average being $81.41 per sqft. As the bar graph shows below, bigger homes with a large gross floor area have the lowest building costs per ft2, and smaller homes with a small gross floor area have the highest building costs per ft2. Medium-sized homes are somewhere in between. Generally, the building cost per square foot decreases as the size of the house gets bigger, and increases as the house gets smaller.

Class 6 Minimum Standard Single Family Homes Building Costs CALIFORNIA

Class 6 Minimum Standard Single Family Homes Building Costs CALIFORNIA

List of 35 Metropolitan Areas/Cities in California – Percentage Deviation of the City/Town Building Cost from the National Average ($X), in Descending Order:

There are 482 municipalities grouped into 34 metropolitan areas in the state of California. The bar chart below indicates that building costs are not the same in each metro city/town. The construction cost per square foot in each of these metropolitan cities varies from the state and national average by a certain percentage based on the location factor also known as the local modifier.

The building costs for these single family homes include all items found in a typical Contract Bills of Quantities with the exception of HVAC installations. So the total costs include all construction trades, electrical installation, plumbing, built-in cupboards, plumbing fittings, local authority fees and permits, utility connections (water, gas, sewer etc), professional fees (architect, engineers etc.), contingency sum, contractor’s profit, attendance and overheads. The Location Factor represents the state of the local construction index, i.e. variation in the cost of labor, materials and supervision. In working out the building costs per square foot, the cost of land, existing infrastructure, land servicing, allowance for escalation, interest costs, parking and loose furniture are not included in the estimate. Ground conditions are assumed to be normal for estimating purposes, but for your own project, you have to factor in ground conditions, weather and climate because no two projects are the same.

The percentage deviation of building costs from the National Average for each metropolitan area in California is shown below.

If $X is the Average National Building Cost in the USA, then it will cost the following to build a residential property in each metro city/town in California:

California 9% (9% more than X)

  1. Redding -3%
  2. Fresno -2%
  3. El Centro 0%
  4. Modesto 1%
  5. Salinas 1%
  6. Bakersfield 2%
  7. Oxnard 2%
  8. San Bernardino 2%
  9. Rancho Cordova 4%
  10. Riverside 4%
  11. Stockton 4%
  12. Mojave 5%
  13. Eureka 7%
  14. Santa Barbara 7%
  15. Alhambra 8%
  16. Los Angeles 8%
  17. San Diego 8%
  18. Van Nuys 8%
  19. Whittier 8%
  20. California 9%
  21. Herlong 9%
  22. Inglewood 9%
  23. Long Beach 9%
  24. Marysville 9%
  25. Pasadena 9%
  26. Orange 12%
  27. Irvine 13%
  28. Santa Rosa 16%
  29. Richmond 17%
  30. San Jose 17%
  31. Novato 18%
  32. Sunnyvale 20%
  33. San Mateo 21%
  34. Oakland 24%
  35. San Francisco 27%

The City Cost List above as well as the Bar Graphs below indicate that Redding is the cheapest city to build a private home in the state of California, and San Fransisco is the most expensive city to build a home. Building costs are -3% below the national average in Redding and 27% above the national average in San Fransisco.

Deviation of City Building Costs from National Average CALIFORNIA - Alphabetical Order

Deviation of City Building Costs from National Average CALIFORNIA – Alphabetical Order

Deviation of City Building Costs from National Average CALIFORNIA - Costs in Ascending Order

Deviation of City Building Costs from National Average CALIFORNIA – Costs in Ascending Order

Cheapest Places To Build in California:

Redding is cheapest to place to build at -3% below the national average, followed by Fresno at -2% below the national average. Construction costs in El Centro resemble the national average. Modesto and Salinas are 1% above the national average. Costs in Bakersfield, Oxnard and San Bernadino are 3% more than the national average. Rancho Cordova, Riverside and Stockton are 4% more than the national average. Building costs in Mojave are 5% more than the national average.

Expensive Places To Build in California:

If anything between 5% and 10% is considered expensive, then the following cities fall under this category: Building a house in Eureka and Santa Barbara will cost you 7% more than the national average. Building costs in the cities of Alhambra, Los Angeles, San Diego, Van Nuys and Whittier are 8% more than the national average. You will pay 9% more than the national average to build a private dwelling in Herlong, Inglewood , Long Beach, Marysville and Pasadena. This value also represents the California state average.

More Expensive Places To Build in California:

If anything between 10% and 15% is considered more expensive, then the following cities fall under this category: Building a home in Orange City is 12% more than the national average. In the City of Irvine, you will pay 13% more than the national average to build a home.

Very Expensive Places To Build in California:

The most expensive places to build a house in California should be those above 15% the national average. San Fransisco is the most expensive place to build a house in CA at 27% above the national average, followed by Oakland at 24%, San Mateo at 21%, Sunnyvale at 20%, and Novato at 18%. Richmond and San Jose have similar building costs at 17% above the national average. You will need to pay 15% more than the national average to build a house in Santa Rosa.

California State Average Costs:

Building in the state of California is 9% higher than the national average. Building cost rates in the cities of Herlong, Inglewood , Long Beach, Marysville and Pasadena are similar to the California state average.




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