Yes, Portland Oregon home construction prices continue to rise. Realtor.com reports that lumber prices have been quite volatile, with a recent cost estimate of over $1,100 per thousand board feet in December 2021 from a summer low of $400. New housing starts are expected to increase in 2022 by 5% across the nation, and there continues to be a general shortage of homes for buyers. Nationwide, residential construction worker wages increased in 2021.
At Hamish Murray Construction, we have definitely seen a rise in construction costs this past year.
Yet, rising costs are not just in construction. Many of us are dealing with another “sticker shock”, whether it’s for groceries, gas, dining, or buying other goods. Home values across Oregon rose 19.7% from last year. The meaning of sticker shock is hitting us not just in home construction but in rising inflation.
If you are wondering if you should be considering a home remodel, new addition or new home construction, with current rising construction costs, this blog addresses some ways to make an informed decision.
How much will it cost to build a home in Portland, Oregon in 2022?
Portland construction costs vary, depending on the quality of the home, remodel or new addition you may build. A new custom home in Portland will cost as low as $250 per square foot, but for a luxury higher end home, expect the cost to be $450 a foot or higher. We recommend you start with $300 a square foot as a minimum budget and $400 for a modern home. These numbers assume that every decision by you is made carefully in order to keep within this budget – and with an understanding that you may not get everything you want. But there are definitely many quality products with a variety of choices to choose from for this budget.
Keep in mind that your cost depends on each type of room and how much you are looking for a quality home. Here are a few examples of cost differences:
- A new kitchen or bathroom will cost more per square foot than a sunroom addition.
- Solid wood flooring costs more than composite or many other floor materials.
- Remodels may cost more than new construction due to demolition costs and working within the limits of each existing home such as an old sloped floor or the need to add structural support.
- A modern home costs more to build than a traditional home. As one small example, a modern home needs heat recovery ventilators which replace stale indoor air with fresh outdoor air.
- Your final costs are based on what you want and what you value.
- A sliding window wall spanning 20 feet will cost much more than a double patio door.
Hardwood flooring and an expansive window wall.
Varying estimates in construction can cause much initial confusion for homeowners, especially if you ask multiple builders for ballpark estimates. As mentioned in another blog about costs, you can easily get different costs. Until you make specific decisions about the products, hidden parts, and materials, these numbers can be wildly different. We have worked with architects who can help you build initial assumptions so you can get more consistent bids early on in the design process.
True sticker shock prices can happen when you get wide-ranging ballpark estimates from different builders.
We can help you avoid construction sticker shock. We can also refer you to some independent architects who are excellent at making detailed budget assumptions before you get too far into the design and soliciting for a builder estimate.
With rising construction prices, how do I make a decision?
You could choose from these three decisions:
- Wait on your construction project
- Start the design phase of your addition, remodel, or new home construction now
- Sell your home and buy a new home that is close to what you want
Wait on your construction project
Those who are experts in construction economics are forecasting that prices will continue to rise. Construction supply chain may become more stable again, and the demand may flatten. Yet, we believe that the cost of construction will continue to rise regardless. So, if you are waiting for better costs, we suggest starting your project soon.
Start the design phase of your addition, remodel, or new home construction
Almost everyone has some budget they need. If you decide to go ahead with your project, know your budget. You can always choose to limit the size of your construction project for the sake of budget. We certainly can help you know how to make the best decisions to stretch your dollars; from new home construction tips to general ideas on how to improve your current home.
Consider your budget and prioritize what’s most important to you regarding an addition, remodel or new home construction. This traditional home in Portland was completed in three phases over four years, starting with expanding and updating the kitchen. Architect: Christie Architecture LLC | Photographer: KuDa Photography
Sell your home and buy another home that is close to what you want
There’s no doubt that moving into a new home is easier than construction. But we have had clients who looked for years to find their dream home and after not finding that dream home, chose home construction. If you are considering this option, you could set up an appointment with a realtor to understand how long you may have to wait to find your home. After all, real estate prices rose higher in 2021 than construction! This is a very tight real estate market, with low inventory. Special homes have bidding wars. Be informed before you start searching for that home. But it may work for you!
Tell us about what’s important to you.
We would be happy to talk to you, or refer you to one of our partners about how to make solid decisions on whether or not to build, with no obligation on your part.
We’d love to meet you. Contact us or call us at (503) 460-7203 with questions you have, or ask us about our philosophy, experience, or any other question that is on your mind.
We seek to build each project on schedule and on budget, and always with top-notch quality results. We solely work with independent architects and designers, and we build long-term lasting relationships.