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Pricey Lots Drive Up the Cost to Build a Home in Massachusetts: Here is What You Need to Know

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At the height of the hot housing market in Massachusetts, it wasn’t unusual to see more than a dozen bids on a house. With higher mortgage rates slowing the market, housing inventory is closer to matching the number of buyers looking, but most properties still get two or three offers, according to WayLynn Garcia, an agent in Springfield, Massachusetts.

To eliminate the competition from other bidders, some buyers choose to look at a new construction home, either in a new home development or by buying property and hiring a contractor. “That way, you’re not bidding with other people,” says Garcia, who has completed more sales than the average Springfield agent by 29%. However, people who decide to build a house must be willing to wait six months to a year, and most buyers “want something now,” she adds.

The cost to build a new home in western Massachusetts is about $280 per square foot of living space, Garcia said.

Building a Home in Massachusetts? A Top Agent Can Help

Whether you are buying a tract home from a builder or building your dream custom home, a trusted buyer’s agent will be your advisor and advocate every step of the way. HomeLight analyzes millions of transactions and thousands of reviews to match you with the right agent for your needs.

Let’s dive in to each building phase and the average costs of each:

Step-by-step costs to build a home in Massachusetts in 2022

No matter which state you’re in, the steps involved in building a house will vary depending on whether you’re buying a tract home — which is when a builder has bought a large tract of land to divide into lots and build out several homes — or if you’re building a custom home.

Keep in mind that the price ranges we’re providing are a general estimate. Your agent and, eventually, your builder can give you much more specific information on pricing!

Here is an at-a-glance look at the average costs of each phase of building, but we will break it all down next:

Building Phase  Average Cost Nationwide (2022)
Foundation $8,469
Framing $14,000 – $32,000
Roof $8,837
Siding $10,750
Appliances $10,875
HVAC System $7,000
Plumbing System $4,080
Electrical System $1,413
Building Permits $1,357
Finishes and Fixtures $42,000 – $175,000

Buying a plot of land ($102,200 per acre)

According to an April 2022 report by the National Association of Realtors (NAR), land sales nationwide rose 6% in 2021. Land sales for residential use were also up, accounting for 4% of all residential real estate sales in 2021.

Prices of building lots in New England, where Massachusetts is located, have historically been the most expensive in the country, according to the National Association of Home Builders (NAHB). That reputation has gotten stronger, with prices for housing lots in the region jumping by 67% in 2021. Consequently, half of all the new single-family homes built in 2021 or later in New England are on lots that are valued above $200,000.

One reason that housing lots are so expensive in New England is that local zoning regulations often require large lots and low-density development, the NAHB noted. In fact, half of the recent builds in the region are on lots of at least 0.8 acre.

In Western Massachusetts, lots are typically one-quarter acre, Garcia said.

Land for homebuilding costs about $102,200 per acre in Massachusetts, according to Home Builder Digest. Building lots in Boston average $230 per square foot, which comes out to more than $1.5 million per acre.

Foundation ($4,000 – $13,500)

Foundation costs will vary depending on whether you’re pouring a slab or digging a basement, but a typical price range is between $4,000 and $13,500.

Almost all homes in Massachusetts are built with basements. A one-story ranch, a popular style in the state, requires a larger basement than a two-story house, and the bigger basement means the contractor has to pour more concrete, Garcia notes. So building a ranch may cost more than a two-story home because of the higher cost of the bigger basement.

Framing ($14,000 – $32,000)

Framing is when the sticks go up and a structure actually starts to take shape. Expect to pay between $14,000 and $32,000 for this phase of building a house in Massachusetts. Framing costs tend to vary due to both the size of the home and the complexity of its design — a one-story home with 2,000 square feet of living space will generally be less expensive to frame than a two-story home with the same square footage.

Roof ($4,838 – $10,623)

Roofing doesn’t come cheap — whether you’re putting one on a new house or replacing the roof on an existing home. The costs of a new roof typically range from $5,500 to $12,000.

The most common roofing material in Massachusetts is asphalt shingles. According to HomeAdvisor, the average price of a new shingle roof in Springfield is $7,730, with prices generally ranging from $4,838 – $10,623. Again, the style of home will affect the cost because a one-story home has a larger roof than a house with the same square footage in two floors.

Asphalt roof shingles are sold in “squares,” and the price per square is $80 to $550, including installation, or roughly $1 to $5.50 per square foot. 

Siding ($5,000 – $14,000)

Siding is another big variable: Are we talking vinyl, wood, brick, concrete, stone, stucco, or something else entirely? Siding costs range between $5,000 and $14,000, with vinyl or engineered wood siding typically costing between $3 and $12 per square foot.

New homes in Massachusetts typically have vinyl siding, Garcia said. HomeAdvisor puts the price for vinyl siding at $3 to $12 per square foot, with installation adding another $6,000 to $16,000 to the final price.

Appliances ($10,875)

You guessed it — appliance pricing also varies widely. Depending on brand, functionality, finish, and so on, you’ll spend an average of $10,875 if the home does not come with any, but you can definitely drop up to $24,400 or more on high-end appliances.

HVAC System ($12,500)

The installation of a new heating and cooling system could cost upwards of $12,500 depending on the size of your home.

Plumbing System ($2,000 – $5,000)

Plumbing can cost anywhere from $2,000 to $5,000 on average — not including fixtures like sinks and toilets.

Electrical System ($500 – $2,300)

The cost to wire a house is, on average, between $500 and $2,300.

Building Permits (Variable)

Permits vary by state, city, and county, but they typically range from a few hundred dollars to a few thousand. By law, all new construction and renovations in Massachusetts must have a building permit. In addition to the building permit, the home may also need permits for plumbing, electrical and other systems.

In Boston, for example, the cost of the building permit is $50, plus $10 for every $1,000 of estimated cost of work. So for a $300,000 home, the building permit would be $3,050. The plumbing permit costs $20 plus $5 for every plumbing fixture in the home. The electrical permit cost is based on how much power the home’s system is designed to handle, so bigger systems cost more.

Finishes and Fixtures (Variable)

Finishes and fixtures comprise everything from countertops to sinks, and lighting to flooring. Needless to say, pricing varies widely and depends heavily on your preferences.

Average carpet installation costs can start at several hundred dollars and go up to $3,000, while hardwood flooring installation starts around $2,500 on up to $7,000.

Laminate countertops tend to range from $790 to $1,626, while granite averages from $2,250 to $4,500.

Building a custom home vs. a home in a development

As a general rule, building a custom home that is tailored to your every need will be more expensive than buying a tract home from a builder. On average, building a custom home in Massachusetts will cost $350 or more per square foot, while building a tract home in Massachusetts will cost $280 per square foot, according to Garcia.

Building a custom home will also require you to assemble a team of experts to design and build the home from start to finish. Here are the team members you will need and a breakdown of what they might cost you:

Architect (5% – 20% of the final build cost)

Hiring an architect will be integral to making your vision come to life when building your custom dream home. Before you start your search for the right architect, get clear about what you are looking for. Be sure to do your research and ask your network for recommendations for architects in your area with experience designing the kind of home you are looking to build.

The cost of hiring an architect could make up anywhere between 5% and 20% of the final cost of the build. For a 2,000-square-foot home in Massachusetts, with a final build cost of $700,000, that would amount to $35,000 to $140,000. Some architects will opt to charge by the hour or per square foot of the build for their services, but this is less common.

General Contractor (10% – 20% of the final build cost)

A general contractor will oversee the entire process of building your custom home — they will also be responsible for hiring and paying subcontractors, vendors, and construction workers. General contractors typically charge what is called a “cost-plus” fee arrangement which accounts for the cost of the labor and materials plus a negotiated fee for the general contractor. This usually comes out to 10% to 20% of the final cost of the build.

Additional costs of building a custom home in Massachusetts

As we mentioned, building a custom home usually comes with additional costs. Again, your agent can help you determine more accurate costs — these are average figures provided to give you an idea.

Land survey ($375 – $745)

Land surveys, which identify your property lines and land features, range between $375 and $745.

Excavation and grading ($20,000 – $100,000 per acre)

If you’re buying a tract home, the land price will be rolled into the overall price to build a home. If you’re buying a lot on your own and then building a custom home, you’ll have to pay to clear the land, run utilities, and put in a driveway. The price can vary widely, depending on the size and features of the lot and how far it is from town.

The cost to just clear a lot ranges from $200 to $3,600 per acre, according to Angi.com, with another $0.47 to $2.28 per square foot if you want the land leveled out. If you choose an excavator, rather than a land clearing firm, they’ll charge by the cubic foot for what they move, whether that’s dirt, rocks, or trees. Expect to pay $40 to $100 per cubic foot, Angi reports.

In rural areas of Massachusetts, where sewer hookups aren’t available, you’ll have to install a septic tank and a well. One of Garcia’s clients recently got an estimate of $25,000 for a septic system alone.

Common styles of homes in Massachusetts and their average costs

The two most common styles of homes being built in Massachusetts are ranch style and colonials, according to Garcia. Ranch homes typically have an open concept area that includes the kitchen, dining area, and family room. Bedrooms are usually located on both sides of the home with the open area in the middle. The colonial floor plan isn’t as open, and the bedrooms are usually located on the second floor.

According to Fixr, the typical prices for these styles are:

Home style Average cost (all-in)
Ranch $200,000 – $600,000
Colonial $407,500 – $570,500

More affordable options for building a home in Massachusetts

While going with a bare-bones building strategy can get you into a new construction home for less, cheaper isn’t always better. Shoddy build quality will inevitably lead to problems down the road — anything from a leaky roof to poor sound insulation can be a frustrating discovery when you’ve only been in your new home for a few months — and there’s value in creating a home you genuinely want, not just one you’re settling for.

Alternative home-building options can give you more for your money and offer valuable flexibility during the construction process.

Tiny homes

A tiny house is usually 600 square feet or less in size. They’re not ideal for large families, but building a tiny house can be faster and more affordable than a conventional home if a smaller space fits with your lifestyle. On average, tiny homes cost between $30,000 and $60,000 to build.

Modular and prefabricated homes

Modular and prefab homes are allowed in any area in Massachusetts that is zoned for housing, says Fred Kozyra, owner of Kozyra Construction, a Brimfield, Massachusetts, company that specializes in custom modular homes. Modular houses are built to the same standards as site-built houses, he explains, adding that buyers shouldn’t confuse a modular home with a mobile home, or manufactured home, which is built to a different standard. Mobile homes must be placed in mobile home parks in most areas of the state, Kozyra shares.

As with a site-built home, the per-square-foot price of a modular house will depend on the features and finishes you select, Kozyra says.

Is it cheaper to buy or build a home in Massachusetts?

As a general rule, buying an older home will be cheaper than building a home. For example, in Springfield, Massachusetts, buying an existing home will cost around $100 to $200 per square foot, depending on the neighborhood. On the other hand, building a home will likely cost about $250 to $280 per square foot.

While building a home will almost always come with a higher price tag upfront, there are some long-term savings that new construction homeowners enjoy:

  • Energy efficiency: Newly constructed homes are generally more energy efficient than older homes — homes built after 2000 use 21% less energy than older homes on average, according to the U.S. Energy Information Administration. This is partially due to more strict energy regulations as well as better insulation and windows in new homes.
  • New home warranties: New construction homes are often covered under builder warranties for a specified period of time. When purchasing an older home, most of the key systems, such as the HVAC, roof, and plumbing, will be older and no longer covered under any kind of warranty.
  • Fewer maintenance costs in the first few years: With a newer home, you can count on your HVAC, plumbing, electrical system, and more to be functioning properly with little required maintenance in your first few years of homeownership. Older homes will likely have older roofs and older systems, requiring you to pay for replacement much sooner.
  • New homes might be cheaper to insure: Many homeowners insurance providers offer discounts for new construction homes, due to the lessened risk of damages common in aging homes.

Get started on building your dream home

If you’ve decided you want to build a new home rather than purchasing an existing home in Massachusetts, you should have a top agent on your side. An experienced real estate agent can help you find a building lot, whether you want to build a tract home or a custom home. Your agent can also help you find and work with a contractor to build your new home. You want to find both an agent and a contractor you feel comfortable with — and who keep open lines of communication.

If you do decide to build a house, you should be prepared to wait. Building a home from scratch takes at least six months, and possibly up to a year, Garcia warns. If the foundation isn’t started before freezing weather arrives in Massachusetts, the builder may have to wait until spring to start the house.

Building a home also requires you to make many decisions about the home’s design, layout, and finishes. Do your research early and be prepared to make your final decisions when the builder needs them, because waffling and changing your mind will only increase the costs of building your home and the time required to get the items needed to fulfill your wishes.

Header Image Source: (Simona Stefanova / Unsplash)