Building costs demystifying $/sq ft

[Alex U.]

I wanted to get some thoughts from some of the experts here in San Diego, regarding building. I have spoken to a few builders, and they casually throw around numbers like $250-$500sq /ft, without even asking the right questions about my project. This certainly tells, me they are framing the pricing. And what is interesting is that, whether you are building 400sq/ft or 4000 sq ft....$/sq ft hardly changes in the conversation. Speaking to one of the famous ADU builders here in San Diego, they said, if I were to build 10x the sq footage the price would go down about 12%. I find that hard to believe. Based on my experience doing full internal cosmetic interior rehab ( kitchens, bathrooms, flooring, paint, fixtures, lighting, baseboards...etc) runs about $25-$40/sq ft(labor and material)...managing the various trades...and not moving walls or utilities, etc or doing anything crazy.

The gap from $40/ft to $400 to build seems incomprehensible, mostly just pure profit for the contractor.  Would love to hear feedback from folks who have built 4 or more units at once ( MF or detached ADUs(single and separate roofs).

[Ryan Normand]

The cost/sf number is just a ballpark number contractors use to mentally prepare customers for the real cost of new construction in this day and age. It also weeds out customers who have unrealistic expectations. If someone is looking to build for $100/sf it doesn't make sense to invest hours, if not days, of labor into a detailed bid knowingit will be out of their budget.

I don't know much about the Cali construction market, but I do know it's on the expensive side, so $250-$500/sf sounds about right to me. It's not fair to compare new custom home/ADU construction costs to cosmetic rehab costs. That's like comparing the mile to the marathon. New construction involves multiple phases each with multiple subcontractors, all of whom expect to be paid the market rate, including profit and overhead expenses for their business. All of that adds up very quickly.