Part
01
of eleven
Part
01
Multi-Family Construction Costs: San Francisco Bay Area
In order to determine the average square foot construction cost for multi-family housing in the San Francisco Bay Area, several figures from different sources were considered. Direct figures were not available on official public sources, which could be due to the difference in prices such as factors like labor availability and cost per area. Thus, In 2017, the average square foot construction cost for multi-family housing in the San Francisco Bay Area was US $318.80, while the average cost per year starting from 2008 to 2012 were $208.10, $218.20, $228.80, $239.90, $251.60, respectively.
The Average Construction Cost for Multi-family housing in the San Francisco Bay Area
Firstly, we added the constructions costs starting from 2013 to 2017 based on the category (1 to 3 stories, 4 to 7 stories and 8 to 24 stories) together. We then divided the respective amounts by 3 (according to the stories) to calculate the overall average for the respective years. Thus, the national overall averages starting from 2013 to 2017 are $170.20, $173.30, $183.10, $193.30 and $205.70, respectively. How we derived to the final figures is as follows:
Secondly, according to Bizjournals.com, in terms of construction costs, including multifamily construction costs, factors such as rising cost of materials also contributed to the San Francisco region having costs approximately 50% to 60% higher than the national average. If we use 55% as the average of these two figures, the average multifamily construction cost for San Francisco in 2017 was US$318.80 (205.70*1.55 = US$318.80). In addition, an article on Nessus Professional’s Bigger Pockets on the estimated construction costs for 2017 reflected a similar amount, at $300.
Thirdly, we did the same calculations for the year 2013 to 2016 and came up with the following figures:
2013 = $170.20*1.55 = $263.80
2014 = $173.30*1.55 = $268.60
2015 = $183.10*1.55 = $283.80
2016 = $193.30*1.55 = $299.60
The average cost per year beginning with 2008 to the most recent year available.
2008 to 2012 Compound Annual Growth Rate (CAGR)
Finally, the CAGR figure for the years 2013 to 2017 amounted to 4.85%. With this amount in mind, we calculated the average cost per year beginning with 2008 to 2012 and the results is as follows:
2012 = $263.80/1.0485 = $251.60
2011 = $251.60/1.0485 = $239.90
2010 = $239.90/1.0485 = $228.80
2009 = $228.80/1.0485 = $218.20
2008 = $218.20/1.0485 = $208.10
Conclusion
In conclusion, the average square foot construction cost for multi-family housing in the San Francisco Bay Area in 2017 was US $318.80 while the average cost per year starting from 2008 to 2012 ranges from $208 to $251 respectively.