Avg price/sqft construction costs in Los Angeles these days?

Question

Searched and didn't find much information.  I realize this is by no means the best way to estimate construction costs but I was curious what the avg construction cost is these days in Los Angeles.  I'm not talking for a high-end home just something decent for the average home buyer. :)  I keep hearing ~$350/sqft.

Will Barnard · Answer

As another local LA licensed general contractor and RE developer, I agree with this assessment and would only add that the range will vary depending on size of build out as well. Just like the cost per can difference between buying a six pack or a 12 pack, larger homes will get a slightly lower cost per SF than a smaller home (2500SF or 1200SF as an example).

When considering ADU's, the cost also goes up as they are typically smaller units (400Sf-1200sf max) AND the fact that you also need to run direct gas line and sewer line connections to the ADU which adds additional costs (and those vary depending on the length of the run and what is in its way (hardscape or softscape).

Hubert Chen · Answer

@Michael H.

I know people are saying there are so many variables to the question you pose. But this question can be answered. I’m a ground-up high end home developer and a “standard” home on a flat lot, excluding soft-costs (holding costs, architect, permits, etc), my at-cost construction would be between $180-$200sf in LA County today. Standard home being: 8’ ceilings, avg $4/sf tile and flooring materials, RTA China imported cabinets, asphalt shingles, vinyl windows, basic hardscape and landscape, no pool. Dont forget you need to add in the garage sf in that cost too. Add in GC overhead profit, soft costs and you could be approaching $250-280/sf.

Joel Forsythe · Answer

As a GC here in LA with years in the design-build residential market, I’ll caution quickly about novice addition speculation.  Additions are new construction. How they are designed and planned affect cost- do you understand what increases structural costs?  Then does the floor plan and site plan actually improve upon the existing or just make things worse?  Worse typically means more remodeling of the exiting to make the addition work.  That’s where $/SqFt fails with additions; what the remodel and repair budget to existing structure will be.  I find it best to instead review costs based on scope category budgets 1st- ie kitchen/bath/open space/mechanicals/landscaping etc. then new construction shell scope budgets including pre-con.  The only way to speculate an addition based flip would be if you’ve built several and “see” what may or may not be similar to comparable projects, and even then you need margins for significant error.  Also, lots of time because New Construction is full plan check and permitting, not over the counter permits. That also tests your knowledge of the local zoning as well as overlay district restrictions.

2 story additions?  If you have never built anything significant in a seismic region you should stay away from imagining costs for 2-story additions in earthquake country.  Stacking current building code on outdated building code (or something before eng codes existed!) is no gambling action.  You better have great, huge, margins for the ARV.

Will Barnard · Answer

Gotcha, back of the napkin is ok to start but you will still need to lock in a more accurate number obviously. WHen you combine a remodel with an addition, you will get some economies of scale to help lower the price pSF on the deal in total. If you factor in $300pSF-$350pSF for a small addition as you mentioned and then add in the rest of your rehab, you should be pretty close. Again, your purchasing power, your subs (or GC) will also determine fluctuation in these costs as well as quality of the finishes, design, etc.

Michael H. · Answer

Thank you for the thorough response!  I guess the reason is that I'm looking for a back-of-the-napkin calculation if a home is worth flipping.  I have a general sense for plumbing, electrical, kitchens, bathrooms, etc. but not when it comes to adding on additional square footage.  So maybe I can't get pSF but I'm thinking about adding 600-800 sqft second story.  Also heard on the economies of scale.

Will Barnard · Answer

So here is the problem with this question and why you are not finding answers. What if I asked what the average cost was for a 12 oz can of Pepsi. Some might tell you $.50 per can and others may say $.20 per can. Both may be right too since one may be buying a six pack at a time and the other a case at a time. To add more to that, with real estate construction, one rehab being the exact same size as another may need a new roof and HVAC system along with all the other items and the second one does not. This is why using a price per SF is not the best way or even a good way to calculate costs for rehabs or new construction. Unless you are consistently targeting 1500 sf homes each time for new construction or 750 SF ADU's each time, the costs per SF will always fluctuate. Then there is the area to calculate too. Areas like LA and NY will have higher materials and labor costs compared to places like NC or TN.

You may be ghearing $350 pSF and that may be accurate for new construction here in LA, but likely for homes around or under 1,000 sf. When you get more square footage, you get more economies of scale and as such, the price pSF goes downward.

Lastly, each investor or contractor has different skill levels and different purchasing powers. One may get better deals because he/she buys more in the year or has arranged better deals from suppliers than the next person.

So to point a question back to you, why are you looking for the "average price pSF" in Los Angeles for new construction? (and your question should be premised with some size factor like between 1200-1500SF).