The average cost to build a home in Delaware ranges from $400,000 to upwards of $800,000. However, this is all variable depending on the location, type of home built, and land costs.
Below is a comprehensive guide on what it costs to build a home in Delaware and factors that impact the overall price.
Cost To Build A Home In Delaware by Size
| Home Size | Basic Home | Luxury Home |
|---|---|---|
| 1,200 sq ft | $240,000 | $400,000 |
| 1,800 sq ft | $360,000 | $500,000 |
| 2,500 sq ft | $500,000 | $650,000 |
| 3,000 sq ft | $600,000 | $850,000 |
*The values here should be used for reference only, the actual cost to build a home is dependant on many variables
Factors That Impact Cost In Delaware
Several important factors influence the overall cost to build a home in Delaware:
Location
The geographical location within Delaware plays a significant role in determining the cost of building a home. Desirable beachfront areas like Rehoboth and Bethany tend to command higher prices due to their premium locations and proximity to the ocean.
In contrast, inland areas generally have lower construction costs. Additionally, waterfront properties incur higher lot costs due to their scenic views and limited availability.
House size
The size of the house directly affects the overall cost. Smaller homes with a square footage under 2,000 square feet often have a higher cost per square foot compared to larger homes.
This is because certain fixed costs, such as foundation and utilities, are spread over a smaller area in smaller homes, resulting in a higher cost per unit of space.
Custom vs Spec home
The level of customization desired for the home also impacts costs. Spec homes, which are built with predetermined designs and finishes, typically cost less than highly customized homes. Custom features like unique architectural designs, high-end materials, and specialized amenities contribute to higher construction expenses.
Materials used
The choice of materials greatly influences the final cost. Opting for premium materials like granite countertops, hardwood floors, and intricate tile work will increase the overall cost of construction.
While these upgrades enhance the aesthetics and value of the home, they also require a higher investment.
Labor costs
The period of 2022-2023 has seen labor shortages in the construction industry, leading to an increase in builder fees.
With limited skilled labor available, builders may charge higher fees to compensate for the higher demand for their services.
Permitting fees
The cost of obtaining necessary permits and adhering to local regulations varies by county and town within Delaware.
These permitting fees can range from $2,000 to $5,000 or even more, depending on the location and the complexity of the project. Ensuring compliance with building codes and regulations is essential but can also add to the overall cost.
Property site
Properties with challenging topographies, such as steep slopes or unstable soil, require additional foundation and site work. These extra efforts to prepare the land for construction can significantly increase costs.
Engineering solutions, retaining walls, and other measures may be necessary to create a stable building site, contributing to higher expenses.
Cost Breakdown to Build a House in Delaware
Location in Delaware
Location is one of the biggest drivers of home building costs in Delaware. Popular beach resort towns like Rehoboth, Dewey, Bethany, and South Bethany command the highest prices to build, with average per square foot costs ranging from $275 to $350. These desirable coastal communities have high land values and elevated property taxes, which pushes up overall build costs. As we can see, a plot of land on the coast will cost you more than a lot in land
Inland areas and communities along the Delaware Bay like Dover, Smyrna, Milford, and Georgetown tend to be the most affordable, with per square foot build costs averaging $200 to $275. Prices are lower here owing to the relative affordability and availability of lots. For instance a plot of land in Dover is significantly cheaper inland.
House Size
The size of a home significantly impacts the overall price. On a per square foot basis, smaller homes under 2,000 sqft cost more to build compared to larger homes over 3,000 sqft. That’s because certain fixed costs like permitting, site preparation, fees, and basic systems get spread across fewer square feet.
For instance, it may cost around $350 per square foot to build a 1,200 sq ft cottage versus $250 per square foot for a 3,500 square foot home. Don’t assume that building a larger home will cost proportionally more based on the per square foot price. You typically get some efficiency in cost with added size.
Custom Home vs Spec Home
One of the major cost factors is whether you build a semi custom or fully custom home versus a spec home. Spec homes (speculative homes built before having a buyer) provide the most cost-efficient way to build since the design is predetermined and the builder can benefit from economies of scale.
Custom homes cost more because they require extra design fees, architectural plans, engineering, custom materials, and intricate finishes specific to the owner. The level of customization also affects labor costs. Expect to pay 15% to over 50% more for a custom home compared to a comparable spec home. Partnering with a production builder that offers customizable floor plans or opting for a semi custom home can help reduce costs versus a fully custom home.
Materials and Finish Level
The materials and finishes selected greatly influence the overall budget to build a home. Here are some typical material upgrade costs to keep in mind:
Granite countertops – $60-$150 per sqft over standard laminate
Hardwood floors – $6-$15 per sqft over carpet/laminate
Tile floors/backsplashes – $10-$25 per sqft over vinyl
Premium cabinets – $150+ per linear foot over standard
High-end appliances – $4,000+ over standard appliance package
You can easily spend tens of thousands extra on premium flooring, stone surfaces, cabinets, bath fixtures and hardware depending on your tastes. Discuss costs of different finish options with your builder early when establishing a budget.
Labor Costs
Labor makes up roughly 40% of the total cost to build a home. Skilled labor shortages in the construction industry have caused wages to rise significantly. Many builders have raised their fees 10% to 25% over the past two years to account for higher labor costs. Expect elevated prices for framing, plumbing, electrical work, drywall, painting, and other subcontractor tasks. Supply chain issues have also extended project timelines, further raising labor hours/costs.
Permitting Fees
Local permitting and hook-up fees to connect to utilities like water, sewer, electric and gas can cost $2,000 to $5,000, varying by where you build. For instance, Sussex County charges about $2,500 in permitting fees for a 2,000 sq ft home. Towns like Rehoboth and Dewey Beach charge steeper utility hook-up and impact fees of $5,000+. Be sure to check on permit costs when budgeting your build.
Topography and Site Work
If building on a sloped, rocky, or uneven lot, extensive site preparation may be needed, including grading, backfilling, tree clearing, or retaining walls. This can add tens of thousands in site work costs not accounted for on flat lots. Be sure to carefully evaluate the lot topography and consult with an excavation contractor early to understand site costs.
As you can see, the three biggest costs are usually the land purchase, labor, and finishes/cabinets. This breakdown should give you an idea of where the money goes when building a home. Costs for individual categories can vary based on the level of finishes and quality of materials chosen.
Tips for Reducing Costs
Here are some useful tips to help reduce the total cost to build a home in Delaware:
- Opt for a spec home design over fully custom if possible
- Build in off-peak seasons like winter when contractor demand is lower
- Use simplified floor plans with square layouts over complex designs
- Size heating/cooling systems appropriately, not too large
- Stick with mid-grade finishes like laminate flooring and acrylic counters
- Minimize changes and extras during construction
- Get quotes from several builders to compare pricing
- Use energy-efficient building practices to save on utilities
Being flexible on floor-plan, house size, and finishes while shopping around for competitive bids can potentially yield savings in the range of $25,000 to $75,000 compared to custom-designed trophy homes with premium everything.
FAQs About Building a Home in Delaware
Below are answers to some frequently asked questions about constructing a new home in Delaware:
How Much Does a Basic Starter Home Cost To Build?
A simple starter home of around 1,200 to 1,500 square feet with basic finishes can cost $180,000 to $300,000 to construct in most Delaware locations, excluding high-demand beach areas. Going with a predetermined builder floorplan and limiting customization provides the most cost-efficient option for starter and mid-sized homes.
What Are Delaware Builder Closing Costs?
When buying a new construction home in Delaware, builder closing costs typically run 3% to 5% of the purchase price. This covers real estate commission, title insurance, legal fees, underwriting costs, and loan origination on construction financing. Delaware transfer tax and recording fees are additional.
How Long Does it Take To Build a Custom Home in Delaware?
Building a custom home typically takes 8 to 12 months from start to finish, sometimes longer. Expect 6-8 months actual construction time once permits are obtained, though supply issues can cause delays. Have a 12-15 month timeline for new home construction.
Build Your Dream Home in Delaware Today!
Embark on your journey to the perfect home in Delaware today. Our team at Byrd is here to guide you through every step, from envisioning your ideal space to understanding the nuanced costs of building.
Let’s bring your vision to life – get in touch and let’s build the home you’ve always dreamed of.The choice of materials greatly influences the final cost. Opting for premium materials like granite countertops, hardwood floors, and intricate tile work will increase the overall cost of construction. While these upgrades enhance the aesthetics and value of the home, they also require a higher investment.