Kansas is the largest city in Missouri. It used to be heavily dependent on the agriculture and manufacturing industries but has since developed its telecommunications, banking and finance, and service industries. The city is also an area that attracts businesses and families, which is due in part to a growing community. Even with the COVID-19 pandemic, the city’s economic performance continues to do well. Governor Laura Kelly announced that 2021 was the city’s most successful business year.
The Cost of Building a Custom Home in Kansas City
For Kansas’ real estate market, home prices were reported to be rising much faster than in other areas. The city reportedly had about 1.1 months of supply for available homes for sale. The average sale price for Kansas rose 10.2% and is now $310,479.
Limited home supply is causing prices to continue going up, and as a result, more and more people are turning to new home construction. About 690 single-family residential permits were issued during October 2021. The total number for 2021 was 5,368, which is 19% more than the total for 2020. Requests for new home construction permits are expected to rise due to having significantly higher demand compared to supply.
The national average cost for new home construction is around $100 to $155 per square foot. Building in Kansas, meanwhile, starts at $120 per square foot for value-conscious projects. A more customized project would be between $123 to $163 per square foot. Luxury homes with higher quality finishes would cost about $203 and more per square foot.
But there are many factors that go into homebuilding, all which can be categorized into either hard or soft costs. All the physical aspects of building the structure of the home, such as framing, foundation, plumbing, and roofing all fall under hard costs. Other facets of the project such as land, architecture, design, permitting, and additional features are under soft costs. Hard and soft costs can fluctuate independently of one another.
The actual cost of new construction will be different based on both the firm and project location; however, most value-conscious projects in Kansas City will start at $120 per square foot. Projects that are more customized and make use of other finishes and materials will be more expensive with a range of $123 to $163 per square foot. A fully customized home with higher quality finishes and features will be around $203 and up per square foot. Thus, the average cost of building a home in Kansas City is $486,770.
Todd Hill, founder and owner of Todd Hill Homes, meanwhile shares that it is possible to see projects priced higher. Much higher valued projects can start at $300 per square foot for basic homes, between $325 to $350 per square foot for mid-tiered homes, and some homes of higher quality materials and labor have even reached the $400 to $450 per square foot range. Other firms offer different ranges that adapt to factors such as labor, supply chain disruptions, and the cost of materials.
Other factors that can also affect the way construction costs are priced, such as port congestion, semiconductor shortfalls, and weather conditions. These factors have also led to limited material supply and slowed production times. The demand for materials is also expected to continue rising, which will, in turn, contribute to increasing prices.
One specific hard cost to take into account when considering pricing is roofing, which can cost between $10,000 and $15,000. Roofing cost per square foot is typically from $3.40 to $5.90; a basic 1,500-square-foot roof costs around $7,000. However, roof replacement in Kansas can go anywhere from $3,400 to$20,700 depending on the roof size and quality of the shingle.
Electrical services costs range between $960 and $1,145. One panel will cost about $442.54, while labor of around 8.2 hours will cost $584.31. The average per panel is around $1,053.34.
HVAC installation costs range between $1,892 and $2,065. The average cost per furnace is $1,979.17.
A concrete slab will cost an average of $1,044, with a range of $341 to $1,951.
Soft costs are aspects of new home construction that cannot physically be seen or touched. The most common factors of soft costs are architectural and design fees, permitting fees, and the cost of land.
Cost of the Land
Kansas spans about 319 miles and has a population density of 1,594 people per square mile. It is currently growing at an annual rate of 0.66%; the city has increased by 9.17% since its last census in 2010. Positive population growth is expected to add to the area’s land value. Some areas will typically cost more than others.
The average land cost based on Redfin is about $103,307.69, or $6.48 per square foot. Kansas’ most expensive lot on Redfin is $165,000 for 8,408 square feet, which can be found close to downtown Kansas, midtown, and the Country Club Plaza and also has access to several amenities. Meanwhile, the cheapest plot of land on the website is $40,000 for a 4,207-square-foot lot. It is located on Virginia Avenue.
Zillow provides different values for the land it has, with the most expensive lot priced at $9,140,630 for 52.64 acres. This particular plot consists of two lots, which can be bought individually or together. There are utilities on site including water, sewage, electricity, and Google fiber. The cheapest post is $6,000 for 7,405.2 and consists of adjoining corner lots at Evanston Avenue.
The most expensive post for residential development on LandWatch is a 0.53-acre lot being sold for $395,000. It can be found in the heart of Briarcliff, close to walking and biking trails. The cheapest lot, meanwhile, goes for $8,900. It is a 0.25-acre lot located at 61st street.
Permits and Other Fees
Information on applying for Kansas permits can be done online through the local government’s website. Prospective homeowners can complete tasks like building permit plan review applications, building permit applications, express plan review applications, and learn about solar panel permits on the website. The local government also has an online permit platform called Compass KC. Zoning clearance applications can be done through this link.
The following is the total project valuation to permit fee:
For electrical, plumbing, and mechanical permit applications, the local government has detailed the process on this section of the website. The schedule of fees can be found here and a fee calculator can be found here.
Additionally, homeowners should be aware that the permitting fees for commercial projects are different than the permitting fees for residential projects.
Architecture and Design Fees
The average cost of design services for Kansas is generally dependent on the cost of construction. Most architectural firms will charge between 10% and 15% of overall construction costs, but some homeowners may come across firms that will charge 6% for basic plans and 20% for full architectural services on a smaller home.
According to Chris Fein, Principal of Forward Design | Architecture, less involved work can be charged about 5% to 6%. More custom work will call for about 12% to 18%, depending on the scale.
Some firms will charge by the hour, which is more common for remodeling projects. Hourly rates can be as low as $45 an hour for an intern in a low-cost living area or as high as $315 an hour for a principal working in a major metropolitan area. The common range for hourly rates is $110 to $200 for Kansas-based firms.
Based on market reports, the average cost is about $5,438 for the range of about $4,282 to $6,595, depending on the scope of work. Additionally, some firms follow a cost-up method where there is a markup for purchased decorations, furniture, accessories, and artwork. Large-scale projects tend to use a fixed or flat rate fee.
What Leading Custom Home Builders and Architects that Serve the Kansas Area Say
Todd Hill, founder and owner of Todd Hill Homes, shared about his firm’s experiences based on recent above-grade projects. A value-conscious custom home project was priced at $300 per square foot, and higher quality homes were priced at $325 to $350 per square foot. Meanwhile, a high-end custom home was priced around $400 to $450 per square foot.
Hill believes that costs will continue to rise over the coming years, mostly due to supply issues, labor shortages, demand, and fuel increases. Despite this, Hill expects the industry will continue to experience increased project opportunities. He said, “Our customers are not very concerned about interest rates. Our customers typically have a large stock market portfolio so I see the industry continue to be busy as long as the market is up.”
Chris Fein, principal of Forward Design | Architecture, provided cost estimates for architectural work in Kansas. For less involved work, homeowners can expect to be charged about 5 to 6% of total construction costs. More customized services will require higher pricing, ranging from 12 to 18%, depending on the project scale.
“It is a strange world right now. Construction costs are very high, and material shortages are not helping. I don’t see this making any large adjustments down in the coming year,” Fein said regarding an outlook for the construction industry.
Fein advises clients and homeowners to try and not to be overly fashionable with their projects. It is recommended that they focus on classic design ideas and finishes for the more permanent portions of a house, which will reduce the need for redesigning and remodeling.
Based on feedback from Leslie Beck, marketing manager of high-end firm GastingerWalker&, it is also possible for clients to be charged 10-15% of construction costs for the architectural fee.
“The costs of architectural fees for these custom high-end homes stay fairly consistent from year to year as they parallel the inflation of construction costs,” Beck added.
The Future of Kansas’ Residential Construction Industry
Market experts in the residential construction industry believe that the high construction costs, material and labor shortages, and high demand will not change any time soon. Additionally, with the demand for homes being higher than supply, market experts anticipate that the main problem will be increasing supply levels.
There is also the expectation that the residential construction industry will experience an uptick in construction projects. This trend is reflected across the nation.
New Infrastructure Law
The Kansas construction industry is expected to benefit from the new infrastructure law. It has been described as a “shot in the arm,” which is expected to provide a positive, trickle-down effect on other industries. This infrastructure law has $1 trillion set aside for infrastructure projects over the next five years.
Funding coming from the law will provide jobs for the 30,000 construction workers in the Kansas area, which will also push forward backlogged projects. The new infrastructures that will be up as a result of the funding are expected to encourage economic growth, which will then lead to more jobs that create opportunities for those who need them.
Development in the area may also entice inward-bound traffic like interested employers and families. This increase in residents will provide a boost for the residential construction industry.