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Thursday, December 09, 2010

Building Costs after the Bust

by Calculated Risk on 12/09/2010 06:54:00 PM

Jeff Collins at the OC Register has some numbers: Builders benefit from cost savings

Builders say construction costs are down 15 to 25 percent.

That translates into an average cost of $100,000 to $140,000 for just the "sticks and bricks" (without land) for a modest, 2,000-square-foot house.

That same house cost $140,000 to $190,000 to build during the peak of the housing boom just four years ago.
This is definitely low end construction at $50 to $70 per sq ft excluding land and entitlements.

Collins notes that most of the savings has come from labor costs:
"A typical laborer used to make between $150 and $180 a day," observed [Scott McKernan, president of Joseph Holt Plastering in Corona]. "Now (he or she is) making $60."
Price drops for materials like lumber and drywall have helped some, but not much, industry officials say. ... Ganahl Lumber's purchasing Vice President Pete Meichtry says that overall material costs are down – at best – 5 to 10 percent.