Alabama - New Construction

[Chad Thompson]

Alabama 

Builders / investors question for anyone doing new construction right now:

What are y’all seeing for cost per square foot TOTAL, using overall footprint (heated + garage + porches + covered areas), not just heated/cooled space?

Please include:

• State / market
• Basic spec, mid-grade, or custom finish
• Slab or crawlspace / basement
• GC managed or self-managed
• Whether that number includes permits/site work

Trying to compare real 2026 numbers instead of outdated estimates. Appreciate any real-world feedback.

[Michael Nimaroff]

From a lending perspective, you’re asking the right question, but I’ll be straight with you, cost per square foot only tells part of the story, especially when you’re using total footprint instead of just heated space.

In Alabama right now, most of what we’re seeing for basic to mid grade builds falls somewhere in the $150 to $220 per square foot range, with higher end or custom pushing beyond that. But those numbers are usually based on heated square footage. When you factor in garages, porches, and covered areas, the per foot number can look lower, even though your total cost hasn’t changed.

Where deals really start to move is site work, permitting, and how the project is managed. A clean slab build on a flat lot is one thing, but once you get into grading, utilities, or more complex sites, costs can jump quickly. Same with management. A good GC may cost more upfront, but they usually save you from overruns that end up being more expensive in the long run.

If you’re comparing numbers, I’d focus less on cost per foot and more on your total basis versus what the property will actually be worth or rent for when it’s done. The investors who stay consistent right now are the ones underwriting conservatively and making sure the deal still works even if costs come in higher than expected.