Construction Costs

Many people who are contemplating building a new home are surprised at the cost of construction. This is especially so since the beginning of the pandemic.

Single family home construction continues to grow in spite of supply chain challenges and rising cost. In 2022, the US Census Bureau reported that 899.1 billion dollars were spent on residential construction which was a 13.3% increase from the 793.7 billion spent in 2021.

Interestingly, homebuilding activity has been heavily concentrated in affordable Sunbelt markets. The US Census Bureau reported that single family building permits increased 22% from 2019 to 2022 for the state of South Carolina and 13% for Hilton Head / Bluffton.

Even with home construction expanding in South Carolina our workforce is not keeping up. The US Chamber of Commerce in their 2023 Worker Shortage Index  reports that South Carolina has a shortage index of 3 out of 4, with 4 being the most severe. The National Association of Home Builders (NAHB) reported an increase of 248,000 construction jobs from November 2021 to November 2022 but it also showed that  South Carolina lost 4,700 construction jobs during that same period, even though construction continued to grow. 

Struggles to hire new and skilled employers, supply shortages, and burnout from overbooked schedules are just a few of the obstacles that have resulted in contractors turning down work.

The sources of construction cost inflation have been a moving target. Since April of 2021, the price of lumber has fallen over 90% after doubling in price in 2020. But steel, plastics, gypsum, glass and concrete have all doubled in price since April of 2021. Many of the manufacturers spoke of the need for supply chain resiliency with stockpiling materials to draw from in order to respond to demand as opposed to “Just in Time” inventory that was put in place during the great recession.

Struggles to hire new and skilled employers, supply shortages, and burnout from overbooked schedules are just a few of the obstacles that have resulted in contractors turning down work and increased costs for construction.

Designing for Hurricanes & Earthquakes add to the Construction Costs

Construction costs are higher in Beaufort County because we are in both a hurricane zone and an earthquake zone. The requirements to mitigate both of these hazards include the following:

• Building the first floor above FEMA’s base flood elevation which adds to the foundation cost.

• Structural Engineering fees to design code compliant structural systems.

• Connecting the roof, through the walls to the foundation and footing with threaded rods, go-bolts, hurricane clips or other code approved methods. This adds to both the material and labor costs.

• The shear walls required for lateral stability are more expensive than sheathing options available in other parts of the country.

• Window and door openings must be protected from windblown debris. Impact rated windows can cost up to twice as much as non-impact openings.

Best Practices

There are several best practice options that will cost more initially but will either save money on your home insurance or utility bill that we recommend.

• A secondary roof under a metal roof that ensures water tightness if the roof is compromised during high winds.

• An U.L. certified lightning protection system will add $7,000 to $10,000 to a 2500 s.f. house but will protect your house and electronics from lightning strikes during our many lightning storms.

• Spray foam insulation is typically 2 to 3 times more expensive than fiberglass insulation but is a far superior product. It stops air and moisture infiltration, will not sag, keeps dust and pollen out and reduces capacity requirements, maintenance and wear of heating and air conditioning equipment.

TV remodeling shows also add to unrealistic time and cost expectations. Those shows often have donated materials, low cost fees from the contractors and have pre-built a large portion in a warehouse prior to the show.

Cost, square footage (both inside and outside) and quality of materials and workmanship are the triad of construction. Estimators QS report that construction costs for  luxury single family homes in South CaroIina range from $350 per square foot to $550 per square foot with an average of $410. This is consistent with what we are seeing. If cost is the driving issue in your project, you must be flexible in the size of the project and the quality of materials and workmanship.