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The Custom Home Price Confusion

Custom Home Build Island EstatesAward-Winning Custom Home

How Much Will it Cost to Build My Home from the Ground Up?

Your dream home is in sight! You have worked out the number of bedrooms and bathrooms you want. You have ideas for the kitchen, living room, fireplace, floors, fixtures and furnishings. Oh yes, you also want a pool with a custom deck, landscaping and a 3-car garage.

So how much will it cost to build your dream home?

Reported Price Per Square Foot

Surprisingly, it can seem there is no exact cost figure that can be given in response to this question.  And at this point a lot of confusion can enter the budget equation.

A Google search about the cost of building a home in Hillsborough or Pinellas County, Florida, gives results suggesting custom homes cost between $100 and $400 per square foot. That’s a staggering difference. On a 4000 square-foot home, that means your project could cost anywhere from $400,000 to $1.6 million. How can you properly budget on that?

Custom KithenAward-Winning Custom Kitchen

We receive calls from prospective clients wanting to build a custom home for $100 to $150 per square foot.  The high-end custom homes we build start at $200 per square foot on the lower-end and go up from there.  This can result in more confusion as it’s not what was seen on Google. So why the discrepancy? What affects the square-foot cost? Read on to find out.

Where Some of the Confusion Comes From

The square-foot price of a new home construction project depends on the type of home you are building. There are typically three different ways a home can be built, depending on what your goal is. These are:

  • Custom Home
  • Spec Home
  • Tract Home

All of these are new home builds – however, each one is very different, with very different square-foot pricing. And there is an exact reason why. Read on to learn the meaning of each one and how that affects your budget and your overall goal with your home.

Custom Homes

A custom home refers to a house that is built specifically for an individual client who is the homeowner.  The construction of the home covers the homeowner’s vision and specifications, which include a custom floor plan and lots of choices in the selection of colors, materials, finishes, fixtures, faucets, appliances, furnishings and materials.

Custom Cabinets and Tub in Master Bath
Custom Master Bathroom

Custom homes are the most expensive cost per square foot to build. This is because every single detail of the home is completely unique and new, and is being selected by the homeowner (or the design team, if it is a Design-Build project).

The beauty of a custom home build, and the reason we love it so much, is that all of the individually chosen features help create a client’s dream home. For those who love unique and beautiful spaces, then custom homes are where it’s at.  

There are, however, ways to control the budget on a custom home – especially if you are working with a Design-Build company that knows what they’re doing. Our unique Design-Build process allows us to design your custom home while also working within your budget. Our experienced design and estimating team can guide you during the design process – so you don’t have to go backwards and undo architecturals that have been drawn out of your budget.

For more information on how to save money on a custom home project, check out Five Ways to Make Your Custom Home Project Cost More – and How To Avoid Them

Spec Homes

, The Custom Home Price Confusion, Nelson Construction & Renovations, Inc.
Speculative “Spec” Home

The term spec home stands for “speculative home.” These are new homes in which the builder has no particular buyer in mind. This means that the finishes and fixtures do not have to be approved by the homeowner; they are installed based on the builder’s specifications depending on what is most profitable and desirable for sale of the home. They typically look very similar to other homes in the neighborhood.

While spec homes are often fully completed when you move in, it is also possible to find a spec home still under construction.  If construction is not complete or too far along, clients may be able to make some selections such as counter-tops and paint colors. 

Spec homes fall in the medium to lower price range in cost per square foot.

Tract Home

The term tract home is defined as “a dwelling that has a similar style and floor plan to those of all other houses in a development.”  These homes are also new builds. 

, The Custom Home Price Confusion, Nelson Construction & Renovations, Inc.
Tract Homes

Tract homes can usually be built at a much lower cost per square foot.  Volume building makes is possible for the builder to purchase materials and contract for labor at a much lower rate than conventional home building methods.  The reason is simple: the floor plans are one of a few popular plans the builder offers for sale.  They might reverse or include different option packages, but they are essentially the same houses using the same materials built over and over several hundred times.

These are the lowest price per square foot and the price is often the best-selling point of tract housing.


If you have your heart set on a custom home and are operating on a strict budget, a willingness to look at cost-effective alternatives in the materials used or reducing the size of the home you want could help you stay within your budget. A skilled Design-Build company should be able to steer you in the right direction if you are willing to look at the less expensive options presented to you.

If you have a tight budget that is less than $200 plus per square foot, you might want to consider a spec home or a tract home.

There are many variables involved in building a custom home, so it’s always best practice to talk with one of our Estimators who can answer questions and provide you with a free estimate.

, The Custom Home Price Confusion, Nelson Construction & Renovations, Inc.

A word of caution:  If you want a custom home and are quoted a price that’s less that $200.00 per square foot, be sure to check that the contractor is licensed, that their license is active, that they have current workman’s compensation and hire subcontractors who are also licensed. You should also check their references and speak with clients for whom they have built custom homes in the past, to make sure that the price they are presenting you is truly realistic and that it won’t end up costing you more in the end.


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