Overland Park is known for being a good place to live, work, and raise a family. Its low crime rate and accredited schools have led the city to be named one of the best places to live in America. Additionally, the city has a strong corporate presence and future job growth of 43% over the next 10 years, attracting individuals and families.
Part of Overland Park’s economic growth may be attributed to the local construction industry benefiting from the infrastructure law passed in 2021. The positive, trickle-down effect of the law is expected to impact other industries, especially since work on several backlogged projects will be resumed. The Heavy Constructors Association added that a good infrastructure will result in economic development and create more opportunities for the unemployed and underserved.
The Cost of Building a Home in Overland Park
Unfortunately, the residential side of the construction industry continues to struggle. On top of the increased demand for new homes due to the housing shortage, home builders have to face labor and material shortages and supply chain issues.
Residential construction firms have reported being unable to find basic materials like lumber and steel, which is causing severe delays in construction projects. Delays are leading to an exacerbation of demand for homes. About 5.24 million homes are needed to meet the demand for 2022.
The National Association of Homebuilders (NAHB) found that more than 90% of builders have experienced delays and material shortages in 2021. Many firms have expressed concern over a possible bottleneck that could worsen the situation since demand will not be slowing down in the near future. Moreover, Redfin expects the housing supply to decline to historic levels in 2022. With a lower inventory, experts foresee a more competitive market with rising prices.
The rising material cost will also affect the cost of new home construction. Framing lumber increased to $1,000 per thousand board feet in December 2021—this is a 167% increase from August 2021. Steel prices may rise above $600 per ton in the future. Similarly, lumber prices have almost tripled in the last four months. The price of an average new single family home went up by more than $18,6000 as a result.
The national average cost of new home construction is $207 per square foot. In comparison, the Overland Park average cost of about $150 per square foot is considerably lower. Project owners can expect to see construction services cost anywhere between $90 to $210 per square foot. Prices between firms will differ based on the project’s details like intricacy and amount of customization.
Project owners will have to take soft and hard costs into consideration during budgeting. Hard costs are related to the aspects of construction that are physically part of the house, including framing, foundation, plumbing, flooring, and roofing. Soft costs, on the other hand, are things like land costs, permitting fees, and architectural and design costs. These costs are independent of each other.
The cost of basic and simple home construction in the Overland Park area will typically be within the $90 to $130 per square foot range. Projects that are a little more detailed or customized, which may fall under the mid-value type home category, will cost $131 to $170 per square foot. For high-end homes that have higher-end finishes and even more customized features, firms may charge $171 to $210 per square foot and above. It should be noted, however, that firms may charge more or less depending on details like square footage and additional features.
On top of basic construction costs, project owners need to take into account the costs incurred from foundation, roofing, heating, ventilation, and air conditioning (HVAC), and electrical installation.
The roofing costs in Overland Park generally range between $124.90 to $1,729.44 per 100 square feet, depending on the roofing type. The following table provides price ranges that project owners can expect to see:
Major system costs are a combination of HVAC, electrical, and plumbing. The following are the average costs for major systems: an HVAC system is about $1,921, while a plumbing system is $350, and electrical installation is $375.
Soft costs are the aspects of construction that are not physically part of the house, including the cost of land, permitting fees, and architectural and design fees.
Cost of the Land
Overland Park’s population is currently growing at an annual rate of 1.38%, which means that the city’s land prices may go up more than cities with stagnant or negative population growth.
The parcels of land available for residential development in Overland Park on Redfin have an average cost of $188,750. The cheapest lot is located on Stearns Street and costs $79,000. It is about 17,179 square feet. The most expensive lot, on the other hand, costs $480,000. This lot is 56,628 square feet and is located along West Terrydale Street.
Permits and Other Fees
Information on the permitting fee process can be found on the website of Johnson County’s local government, of which Overland Park is part. Applications for permits, plan reviews, and inspections may be submitted to Johnson County’s MyGovernment Online Permitting and Inspections software. The software allows residents, contractors, and design professionals to pay for fees and track application progress.
Using the portal requires an account, which is free to make. A customer portal instruction document is available for viewing online to guide users.
The following figures are the residential development fees. These fees are available for download along with a permit fee calculator:
Additional fees include the following:
- Plan review fee for all residential projects – $50
- Plan review for new single-family dwellings residential projects – $100
- Additional plan review required by changes, additions, or revisions – $50 per hour (minimum of 1.5 hours)
- Inspections outside of normal business hours – $50 per hour (minimum of two hours)
- Reinspection fees – $50 per hour
Architecture and Design Fees
Architects will typically charge based on the total construction value of a project. Nationally, that would be 5 to 15% depending on the services rendered, project complexity, and architect experience.
Firms may sometimes charge by the hour or by square footage. Some architects have a fixed rate for work done by the hour, which is about $60 to $125 per hour. If the work is done in urban areas, the pricing may be higher and will depend on the request, project location, and the architect’s position, experience, training, and reputation. The most common services are layered drawings, project management, concept development, consultation, and site visits.
The average cost of hiring an interior designer in Overland Park is about $6,653. For work being charged by the hour, it may cost around $50 to $200 per hour.
The Future of Overland Park’s Residential Construction Industry
Experts foresee the residential construction industry, in general, to struggle in the long term. Firms are continuing to struggle with meeting the demand for new home construction, which is expected to worsen as the housing supply reaches historic lows within 2022. Combined with supply chain and material delays, it is possible that the industry will experience a bottleneck.
The rising cost of basic materials like lumber and steel is leading to more delays in projects and an uptick in home construction prices. For example, because lumber prices have almost tripled in the past four months, an average new single family home now costs $18,600 more.
Similarly, the low housing inventory and increased competitiveness in the market are causing housing prices to go up and reducing affordability. Higher market competitiveness, in particular, leads to bidding wars that increase costs. NAHB said firms will be challenged to adjust to higher input costs while maintaining affordable home prices in 2022.
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