Blog

The house
Excessive resource consumption in oversized homes is obvious but, until the current recession, our median home size increased every year. What size is “oversized” is open for debate and rightly varies with family needs. A NAHB research report two years ago showed that a 2500 square foot home takes three times the materials of a 1250 square foot home to build, even though the size is only double the area of the smaller one.

One of the most potent drivers of over building is the real-estate value equation that values the lowest cost per square foot above all else. True values, such as: the quality of materials used, superior design, or outstanding craftsmanship are not considered in appraisals. RS Means Company, the most respected resource for building cost data in the United States, shows that, while a 1000 square foot home may cost as much as $215 per square foot to build, a 4.000 square foot home costs as little as $115, a full $100 per square foot less. (1/4 the size but only 1/2 the cost) This is understood most clearly when you choose one cost item, such as a $7,500 water tap fee. These fees are often the same no matter the size of a home. That tap fee contributes less than $2 per square foot to a 4000 ft2 home but adds $7.50 per square foot to the 1000 ft2 home and no real quality. This kind of spread occurs with many things on a builder’s cost breakdown, such as the heating system, the kitchen, or the cost of the electric service. Although expensive on a square foot basis, the small home still costs significantly less, in this example $215,000, while the 4,000 square foot home has a price tag of $460,000 for construction. And yet, we cling to the convention of value by the square foot and teach buyers that the true value in their homes is how cheaply it costs per square foot.