Price Per Square Foot: A Common Question But Not an Accurate Measurement of Home Value

Posted by: kcb_admin
Date: July 11th, 2016

Not a week goes by that King’s Court Builders isn’t asked the common question, “What is your price per square foot?” While we wish we could offer a quick number to aid new home buyers in their decision making process, a straight forward number would be similar to comparing apples to oranges or possibly a Hyundai to a BMW. Unfortunately, it’s a difficult question to answer and one we try our best to explain. There are many variables that explain why the price per square foot isn’t a reasonable way to compare builders or measure the cost or value of a new home.

First, there is no standard to distinguish what is included with the square feet of a home. Our figures include only finished areas, but never the basement—even if it is finished. Also, we only count actual floor space, not the dimensions of the exterior of the home then multiply it by two. This method provides a more accurate living space number and avoids calculating any areas with two-story ceilings twice. The garage or any exterior surfaces, such as a deck or patio, are also excluded in the measurement. While this is our method of calculation, other builders may do something entirely different. Therefore, comparing the price per square foot can be deceiving and extremely inaccurate. You’re comparing homes, but not the same home—by any means.

Let’s also take into consideration that some designs or floor plans are simply more expensive. For example, a bathroom is usually less square footage (sf) than a bedroom but is more expensive because of the plumbing and fixtures required. Another example is a ranch home, where there is a larger foundation as well as a larger roof, is much more expensive than a two-story home where rooms are stacked on top of each other. For comparison, after deducting the cost of land our Marlowe ranch is $155/sf, while our Camden two-story is $132/sf. That’s a difference of $23/sf for Monarch features. If you look at the difference with Elite features our Marlowe ranch is $197/sf, while our Camden two-story is $167/sf which is a difference of $30/sf.

Speaking of features, what is actually included when you compare the price per square foot…?

  • Is landscaping included?
    • If so, is it just sod and parkway trees or is the builder including other plantings?
    • Will you have a concrete or asphalt driveway?
  • What type of flooring is included and in what areas?
  • Does the builder use custom or box cabinets?
    • Cabinets are another large expense.

Basically, you need to identify the builder’s standard features and determine what you will be paying for, above the quoted price per square foot, to have the home you desire.

In the end, you want to know that you are getting the best home for your hard earned dollars. But, how do you do this? Set a budget, just leave a little flexibility for those “must haves”, then compare the features you want, not the price per square foot. The end result will be a high-quality custom built home within your budget—just the way you want it!