The Cost Of Custom Homes and Renovations Will Rise In 2018

Be prepared to pay more for your renovations and custom home build in 2018.

The cost of construction is rising and doesn't look like its going to settle down anytime soon. If you are planning to build or renovate in 2018 then you need to adjust your budget accordingly.

Here are some of the reasons why construction is going to cost more in 2018;

• A building boom. There is a building boom in our area, builders are busier then they have ever been before. That means that they have the ability to pick and choose the jobs that they want to take on, gone are the days of pricing jobs low just to stay busy.
• Material costs. Building materials have doubled in price in the last 6 months. That means that the raw building materials could cost you anywhere from 50 to 100,000 dollars more then in early 2017. It has become so bad that there is an actual lumber shortage at most lumber yards for a lot of products.
• Labour. With a bunch of law changes coming from the provincial government and a minimum wage increase the cost of all labour will be going up in 2018. All businesses will have to raise there rates to cover the increase in costs.
• Trades shortage. There is a severe shortage of trades in most areas. Tilers, masons, plumbers are getting harder to secure because they are under such a demand for their services.
• Big Business. Large corporations are buying up smaller businesses and consolidating them so that they have a monopoly. Insulators, concrete suppliers, waterproofers, mechanical contractors are just a few of the trades that are being bought up and controlled by a handful of large corporations. This means that they will be able to artificially inflate the cost of what they provide.
• Land costs. If you are looking to build a custom you are going to have to pay more for your building lot with the hot real estate market.
• Building Code Changes. The building code has had dramatic changes in the last 5 years with the amount of insulation required rising and the overall energy efficiency of homes having to rise. Eventhough this is a good thing in the long run it usually means that it will cost you more money upfront to build.

Whatever you are planning to do in 2018 whether it is building a custom home, renovating or adding an addition be prepared to pay more then you did in 2017. You will have to approach the project with a contingency fund to help offset the costs that are rising so that you don't end up in a situation where you run out of money before the project is finished.

Rob Abbott

Village Builders Inc.

The True Cost Of Building A Custom Home

Here's the one question I get asked all the time when someone calls me about building a custom home "what do you charge per sqft to build a custom home".

Our answer use to be "how much do you pay for a car?" Basically because there is so much difference in the cost from one custom home to another because they are "custom" to the person its built for that there was no entirely accurate way to answer the question. We decided that the answer (even being correct) really didn't help the person asking the question to know what a custom home cost.

So what we started doing was telling people the cost of the "average" custom home per square foot (sqft). This helped a lot because people then realized that they could take that number and multiple it to the size of the house (in square feet) that they wanted. The math was kinda simple, for example if you wanted to build a 2000 sqft custom home and I told you that the average cost of a custom home was about $200 a sqft then you could come up with the figure of $400,000 and know the cost of the house you wanted to build. 

The problem arises when the person asking that question isn't looking for a rough number on the cost of having a custom home built but an exact cost for the home that they want to build down to the dollar. The problem with this is that most of these people have no plans or drawings of their future home for me to price from, which means that the house could be simple or it could be a palace with gold toilets. No matter if the simple home and the palace were the same size one is obviously gonna cost more then the other.

So when you tell someone that the average cost of a custom home is $200's a sqft that's because thats where they usually start, the fancier the custom home the more it's gonna cost. For example; I have built really large custom homes that are 8000 sqft, the actual cost of the home overall was about $2,000,000. That works out to about $250 a sqft. But I have also built homes that are 4800 sqft and they also cost $2,000,000's. The difference in cost per sqft is a lot. The reason was that the larger home had large rooms that didn't have a lot of detail in them, they were big open rooms with normal trim and fairly normal finishing's throughout the home. The smaller home had the best of everything, it had cathedral ceilings, timber framing, hardwood stained trim and the most expensive floors money can buy. It also had real stone on the entire outside of the home. The smaller home was more expensive per sqft at about 416.00 because of the finishing's and the design of the home. This type of price discrepancy is what gives contractors a bad name, people will say that the builder told me one price at the start, "I got the plans drawn up and the price sky rocketed". 

So when you start looking into having a custom home built calling around to every builder that you can find on the internet in your area and asking them how much they can build a custom home for isn't really going to tell you how much they will build your house for, what you need is a proper set of plans for your future home. When you have that then you can visit builders and ask them for a price on your dream home, then the contractors have little to know excuse not to give you a fair and accurate quote . That's the only way that you will ever get the correct answer to what your home will cost per sqft.

When contractors are quoting or even budgeting new custom homes the more information that you can give them only helps them generate a more accurate quote. Take your time, make as many decisions as you can and concentrate on the details as the plans are being prepared, remember the more information the better.

Rob Abbott

Village Builders Inc.