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What does new home construction cost these days?

Original post made by Resident of Midtown, Midtown, on Feb 6, 2010

Folks, I live in a 1950 Eichler and am planning a remodel that
will touch most of the house except for the existing foundation
and a couple of walls. I've been told its much better to just
knock the whole thing down and go for new construction. In this
regard I have a few issues that others here might have wisdom
they would like to share before we plunge into the project.

1. What would new construction cost these days?
I know it varies but I have been told that with so many people
out of work, the bones (foundation, framing, roof, electrical,
plumbing and labour for a 2500 square foot house can be done for
around $275K plus another say $120k for finishes, cabinets,
appliances, paint light fixtures, plumbing fixtures etc.) making
a total of around $400k. I know this is low for palo alto but
with many people out of work I have been told this is realistic.
p.s. I'm looking for quality not fancy finishes.

Any opinions? experiences?

2. The process of reassessment by the county seems like black
magic. No one seems to know how a remodel or a new house is
reassessed for property taxes. The best info I have is that
the land assessment will stay as is while the new building
will be assessed at market value based on comparable sales.

Has this been your experience?

Thanks!

Comments (52)

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Posted by 9 months ago...
a resident of Charleston Gardens
on Feb 6, 2010 at 8:32 pm

i was told 9 months ago that a simple remodel with a staircase alteration, moving of a kitchen/bathroom, and a huge master bath remodel would run $250k. I think that's still the case.

I would expect $250-$350 a sq foot at this point. I think it might be in the lower end, but not $125 a sq foot as you suggest.

(not an expert)


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Posted by Builtin2009
a resident of Green Acres
on Feb 7, 2010 at 8:34 am

Just finished scraping and rebuilding a 2500 square footer for about $225 per foot all in. A big variable can be how much a general contractor charges for "overhead (profit) and project management." Also, we procured all of the decorative materials ourselves, even the windows and doors. That was a ton of work. We could have spent less, but wanted quality materials throughout.


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Posted by Walter_E_Wallis
a resident of Midtown
on Feb 7, 2010 at 9:36 am

Walter_E_Wallis is a registered user.

Before the first shovel full, excluding design, expect to spend more than the original house cost.


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Posted by don
a resident of Downtown North
on Feb 7, 2010 at 9:27 pm

Whatever it costs get a foundation instead of a concrete slab floor. The soil in most areas is all or part adobe and greatly expands and contracts with changes in moisture content. A cracked slab is more vulnerable to termite infestation.

A foundation gives better access to water and gas lines. Be sure the house is firmly bolted to whatever foundation you have - better earthquake protection.


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Posted by BeenThereDoneThat
a resident of Midtown
on Feb 7, 2010 at 10:08 pm

There are city guidelines on the % construction for it not to qualify as a 'new' construction. About 2 yrs ago, it used to be 50% of the assessed cost. For example, if the assessed value of the property is $800K, then the cost of the construction had to be lower than a certain %. The cost of the construction - not according to what the contractor is charging you, but according to what the city thinks it should be. City has its own formula - the contractor costs are way higher up.

If you exceeded the %, then the city demanded the house be brought upto the code - which is essentially a rebuild - which leads to new construction and the property tax jumps way high up ( as if you have just purchased the place )

Get a qualified architect, who has worked with the city, to help you thorough this.


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Posted by Walter_E_Wallis
a resident of Midtown
on Feb 8, 2010 at 7:44 am

Walter_E_Wallis is a registered user.

I agree with Don and Been. Specific to Dons' comment, make sure the crawl space is crawlable. You can still have settlement in pier construction, so you need room to make corrections.


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Posted by Patricia
a resident of Barron Park
on Feb 8, 2010 at 8:19 am

There is a house in my neighborhood that was built at less than $100/ sq. foot. It is a 2 story custom prefab, but you can never tell it is one, it looks so gorgeous. The 2,500 sq.ft prefab cost about $120K and another $100K was spent on foundation, roof upgrade, cabinets, insulation and electric wiring. The guy who built is incredible creative in finding discounts and good deals. Total construction cost $220K! Contractors can't believe it, but it is true.


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Posted by paresident
a resident of Crescent Park
on Feb 8, 2010 at 8:43 am

Be very careful when choosing an architect. We choose one who seemed to have very good credentials and has done many homes in the area including on Stanford. But he was awful and it took way too long for him to even finish the plans. These plans were poorly done and cost us more to have our contractor fix them. Make sure you get recent recommendations and check out the work previously done.


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Posted by Kira
a resident of Southgate
on Feb 8, 2010 at 10:03 am

I strongly recommend a tear-down rather than an add-on. You will get buried in numerous reviews by the city. I also heard that getting a pre-fab and customizing its finish (e.g stucco instead of side board, tile roof, etc) will save you lot of money that you would otherwise spend on architect and reviews.


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Posted by good experiences
a resident of Midtown
on Feb 8, 2010 at 10:38 am

> "Be very careful when choosing an architect."

I absolutely agree! Get references. Judith Wasserman, who is on the ARB, is an excellent architect. She also has a fine arts degree and knows all about green building. She will guide you through the process, help you with paint colors, lighting, et al. Really great!

Be equally careful in choosing a contractor. Many are low-balling right now in order to get work. A friend got a quote of $125 - $140K for a project doing a small remodel to a 1952 house. Six months later the tab is at $400K and they're not done yet! It's an emotional, as well as financial nightmare.

I HIGHLY recommend Chris Donatelli Builders. Web Link

He did a remodel for us on a 1950's Palo Alto house several years ago, and more recently built us a new house. He's a third generation builder and has the highest integrity.

He told us our remodel would take 6 months. Friends laughed. Six months later we moved back in.

He told us our new home would take 1 year. Friends laughed. One year later, we moved in. On time, on budget.


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Posted by MKS
a resident of Palo Verde School
on Feb 8, 2010 at 11:18 am

I did a simple removal of cabinets and upgrade of electrical in the kitchen of my Eichler in the summer of 2008, which grew to half the house(I sourced the materials with the help of the GC and did as much leg work as possible and the finished product (new kitchen, family room, and living room) came to a cost of about 100K.

I think if you are going to rebuild more than 40% of your home get an arch who knows the PA Planning department and their idiosyncrasies. And you need to have a GC you can trust, we used A.C. Construction. They left the job clean (esp during the dry wall phase), collaborated with us when a change was desired and advised on other options should we want them (you need an open mind to want to collaborate with the professionals versus your emotional attachment to your home), and all around honest firm. I am a repeat customer.


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Posted by Ruth
a resident of Greenmeadow
on Feb 8, 2010 at 1:19 pm

To MKS,
Which A.C. Construction did you use? The one in San Jose?


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Posted by Julia Harkola, PE, PhD
a resident of another community
on Feb 8, 2010 at 3:43 pm

I'm a home builder from San Carlos. In this case, I would highly recommend rebuilding the home. We typically use $275 to $300/sf for an entirely new home, depending on structural complexity and how expensive the owners' tastes run. If anyone is interested, I teach a seminar called "ABC's of Home Building" through Redwood City Parks & Recreation Department (tel. 650-780-7311) that goes into detail regarding conceptual estimating (at the level we're discussing right now), as well as how to properly budget a home building project. The next sessions are on Monday evenings, May 3 & 10.


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Posted by J. Simon
a resident of South of Midtown
on Feb 8, 2010 at 6:38 pm

If you do decide to put in a new foundation, be aware that the cost of demolishing your old slab and hauling it away will cause you to rethink this plan (demolition cost plus environmental fees). We remodeled eight years ago and it took 18 months. Thank you, Palo Alto Process. By choosing to leave 50% of our walls up, we were able to keep our single car garage (something we wanted). New construction would have required a double garage. Rules have changed so check out what is required if you go with "new" construction (more than 50 % remodel). Good luck.


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Posted by Judith
a resident of Leland Manor/Garland Drive
on Feb 9, 2010 at 10:35 am

Do you live in a flood zone? That, along with the condition of your soil, will determine your foundation. Building code, energy code, Palo Alto zoning code will have lots to say about the quality of construction.
Palo Alto does NOT review one-story houses or additions.
If you do decide to start over, look into "deconstructing" the old building - it's good for the earth AND gets you a big tax break.
And, yes, you need an architect who knows the area, not only to get you through the Palo Alto process but for info on local sources of materials, climate conditions, etc.


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Posted by Ada
a resident of Midtown
on Feb 9, 2010 at 10:45 am

What explains huge construction cost difference, which in Bay Area is 2-3 times higher than in other areas or states? In TN residential construction cost starts at $65/sq.ft, in Texas and Florida it is $75-85/ft for mid grade , in Pennsylvania it is about $100/sq.ft. Why for God's sake it is $300/sq.ft here? Has anyone tried to take advantage of cross-state price arbitrage?


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Posted by been there
a resident of Midtown
on Feb 9, 2010 at 11:22 am

I agree with all above that the one thing you want to do in such a major remodel is get a new, raised foundation. The old Eichler slab foundation is the one thing you should replace! Check into property values, homes on raised foundations always sell for more than comparable square foot on slabs. Slabs are also a problem for mold -- have you ever noticed houses with old carpets on slab foundations, how there is a black line around the edge that looks like someone didn't clean the carpet well enough? That's mold, not dirt. Temperature cycling on these old slabs causes condensation and mold growth.

What about a green "manufactured" house? You do the foundation, and they come set it up on site, very fast. It's not like old prefab houses, many makers now will do green, healthy, environmentally friendly construction, and you get something made indoors in a factory to your specs, with very little waste as there is in traditional construction. You don't necessarily save money, but you can if you plan right.

I don't know about the property tax issue. Do your best to get information directly from the property tax office.

Also, one issue in Palo Alto that may be relevant to cost: Palo Alto planning dept does not issue temporary occupancy permits that people often get so they can move in before the project is completed per the permit. You may find, as we did, that our mortgage rates went up while we were furiously trying to finish nonessential and cosmetic work to sign off our permits, in order to be able to refinance the construction loan to home loan. The timing ended up costing us a lot of money. This is one aspect of construction that favors manufactured homes: once it's all set to go, you don't have the delays of traditional construction (in traditional, count on twice what your contractor tells you, so you can be thrilled when it's done just 60% longer than promised). However, the planning department may have little experience and a lot of reservations about manufactured homes, so expect to be a trailblazer there.


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Posted by palo alto mom
a resident of Duveneck/St. Francis
on Feb 9, 2010 at 11:27 am

There are a lot more rules in CA than in most states. To build here you need a soils test, a structural engineer, shear walls, earthquake safety, green building issues, etc. Much of this isn't required in the rest of the country.

We lived in Texas in an unincorporated area near Dallas. There were no building codes or inspectors, the only fee we paid for an addition was for the change in property tax. Building costs on the east coast are lower, but only by a little.


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Posted by good experiences
a resident of Midtown
on Feb 9, 2010 at 1:15 pm

Judith is right about deconstruction. You must get an appraisal first, to qualify for the tax break. I recommend Floyd & Marianna Sparks: (760) 419-3301 or (760) 419-3370. They are located in San Diego but do a lot of work in the Bay Area and they are very experienced. Be careful of appraisers who promise unrealistic numbers!

For actual deconstruction, Paul Gardner at Whole House in East Palo Alto. 650-327-1933

You will get a tax write off that's well worth the effort.

Re concrete slabs: I don't know if you can put radiant heating on top of an existing slab, but radiant is a great way to go.


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Posted by Ada
a resident of Midtown
on Feb 9, 2010 at 4:09 pm

Yes, "there are a lot more rules in CA than in most states", but they don't explain hundreds of thousands of price differential. I think we need to collectively push back on outrangeous mark ups and find more economical ways to source and build. I heard some smart people in the Penninsula manage to cut the construction costs down to $80/sq.ft by smart negotiation and shopping around. They also flew contractor from Arizona and paid for his studio apartment here. There are many ways to save, especially if you have time, but since most of us do not have time to manage projects ourselves and because our time costs a lot more than what we could save we end up paying through the nose. Recent example - 2 quotes from certified electricians for track lighting along the exposed roof beams. First quote was $8K, the second quote was $1K - go figure out!


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Posted by litebug
a resident of another community
on Feb 9, 2010 at 8:21 pm

(former resident)

If you are interested in manufactured homes you might check with Sunset Magazine. I seem to remember some feature articles about them in there in the past.

As a dedicated watcher of HGTV I've seen several shows featuring some very attractive manufactured homes. In one episode they showed how they were made, transported, set up, etc. It was very interesting. In another, the manufactured home had to be able to withstand hurricanes. There are usually customization options.

I have heard that it can sometimes be harder to get a mortgage for them than for stick-built homes. I don't know about the insurance and tax implications but they should be investigated.


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Posted by Oldhouse
a resident of another community
on Feb 10, 2010 at 1:01 am

Thanks to the O.P. for the great question, and all the very helpful information and advice. I wish there was a website, similar to Yelp, where you could get recommendations about architects, contractors, and information about remodeling and construction. I have thought about remodeling v. rebuilding for years but thought it was all too expensive to even consider. Now I have some hope that there are feasible ways out there. Please keep posting more on this!


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Posted by Ada
a resident of Midtown
on Feb 10, 2010 at 9:37 am

There are more feasible and economical ways to build! You can call some of these companies and ask for references in the area. Check Canadian company called Pacific Homes Web Link and look at the portfolio of homes built in California. If you pay a littl extra for custom exterior finishes such as stucco, iron grills, etc you noone woudl ever guess it is premanufactured.


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Posted by Southgate Resident
a resident of Southgate
on Feb 10, 2010 at 9:47 am

I heard that manufactured homes is the best kept secret which architects and contractors don't want you to know. I wish people who built their houses this way locally would come out of the closet and share their cost information.


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Posted by Casey
a resident of Midtown
on Feb 11, 2010 at 1:11 am

Regarding property taxes, I think the reassessment depends on how long you've owned your home. If you've owned your home for 5 years, then the land assessment will stay the same. If you've owned your home for less than that time, the Assessor will assume that the entire purchase price was for land value only, if you end up going the new construction route. So your new land value = existing land + structure value. Then, they'll tack on the current market value for your new construction. The good news is that property prices for new construction is down, which should help your comps.


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Posted by MidtownRemodeler
a resident of Midtown
on Feb 11, 2010 at 12:20 pm

I'm the original poster of this thread and would like to thank everyone who responded. I have a couple of quotes already for about $150/sq ft for a 2500 sq ft single story, with decent but not fancy finishes. I'm amazed at how many people suggested prefab - that option now looks attractive considering the cost and time savings. I'm starting a new thread on prefab homes.


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Posted by NewToWillows
a resident of Menlo Park
on Feb 11, 2010 at 1:43 pm

Patricia,

Do you happen to have the contact information or the person who built the home using a prefab in your neighborhood or whom they used? Is the property in question one that is on Maybell? You can contact me privately at ww13 (at) yahoo (dot) com.

MidtownRemodeler,

If you don't mind sharing I'd be interested in hearing which general contractors are pricing in this range. Does this quote include their fee?

Thanks!



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Posted by PA Resident
a resident of Midtown
on Feb 11, 2010 at 5:39 pm

Someone posted a cost of $275/#300 per sq ft. Dont believe a word of it! That's a ridiculous price., Talk to a lot of contractors and insist that you will only pay $150 a sq st and see them come down to earth. Prices go up once they hear you live in palo alto too.. You can build a nice 2500 sq ft 1 story house for about $280k for the foundation, framing, comp shingle roof, walls,plumbing electrical and all the labour. plus another (depending on you) $80k (cheapo) to $130k (decent, vinyl windows etc) to unlimited (fancy) for the finishes- doors/windows/paint/electrical and plumbing fixtures/hardwood floors, cabinets counters, etc.


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Posted by another-midtowner
a resident of Midtown
on Feb 15, 2010 at 11:47 pm

Patricia and NewToWillows,

I would be interested in knowing if you connected; if so can I contact NewToWillows at the email id above? I am interested in knowing more on this topic as well. Thanks in advance!


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Posted by Palomar
a resident of Another Palo Alto neighborhood
on Feb 16, 2010 at 12:28 am

So what's the skinny on these prefabs? What do you get? Complete package, or just walls/interior-exterior finishes/roof? Are windows included? Is interior (flooring/baths/kitchens) done? Can you order a prefab home a-la-carte?

Also, has anyone used the wall systems or panels alone to put together a custom home? What is the cost saving of getting entire "shell" versus walls and put them together?


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Posted by NewToWillows
a resident of Menlo Park
on Feb 16, 2010 at 12:07 pm

another-midtowner,

I have yet to connect with Patricia. I hope she comes back to this thread so that we can get more information.


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Posted by MidtownRemodeler
a resident of Midtown
on Feb 18, 2010 at 9:29 am

Also trying to connect with Patricia regarding the name of the company that did her neighbor's 2-story for $220 K.


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Posted by new comer
a resident of Duveneck/St. Francis
on Aug 6, 2012 at 9:30 am

Not sure if this thread is still alive. I'm looking to rebuild my house with custom prefab and would like to hear recommendations. I've done some search online and found a list of manufactures who do the build for you but not sure which one to choose from.


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Posted by Chuck Scifers
a resident of Evergreen Park
on Aug 15, 2012 at 12:00 pm

Yes, Pre Fab homes are great. The quality homes in Europe are Pre Fab - the stick-built are the low end.
My first design job after college (Industrial Design) was to develop a factory-built housing system. It worked out great and we received FHA approval. The fit and finish were good, rooms had square corners, tight envelope, etc.
Cheaper, faster, better.
And structurally - consider any stick-built home traveling down the freeway at 55 MPH!
Until we can be freed from the grasp of the inefficient unions, we are doomed to shoddy, overpriced home construction.
I am now working on incorporating green - passive solar design into factory-built, modular housing.

Chuck Scifers
408-348-7634
chucksgmail.com


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Posted by New Project
a resident of Barron Park
on Sep 21, 2012 at 2:18 pm

To MidtownRemodeler,

We are considering doing a new build and was interested in paying about $160 - $175 per sq ft. If you have time, I would love to hear who you ended up going with and how your project went. Hope to hear from you or anyone else who was able to build near that range. Thanks! cowanidoa(at)gmail.com


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Posted by DC
a resident of Old Palo Alto
on Nov 13, 2012 at 4:19 pm

Late to find your site, so hope not too late to contribute. I've been looking into pre-fab home designs/costs. For those who haven't already checked, the two I found the most helpful - and with amazing modern designs - were Studio 101 Designs (info@studio101designs.com), and MK Designs (mkd-arc.com) by Michelle Kaufman, who designed the Sunset Breezehouse that another contributor referred to. Sorry, I only noted the modern design architects. I'm sure there are more traditional designs out there. Both sites include info on what's included in the price as well as what's NOT included. Hope this is helpful.


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Posted by Lionel
a resident of Adobe-Meadows
on Mar 18, 2013 at 11:42 pm

Hello guys, is this thread still alive?
Btw, I don't live in PA, I just bought a house in San Carlos, and was searching around for construction cost then stumble upon this forum, I hope you don't find me intruding on your neighborhood.

I am very interested in contacting some of the folks here who said they received quote for $150~$175 per sqft. I am always told to use $250 per sqft as a number for my remodeling and reconstruction, and I don't know how realistic it is.

The project I want to do is to add on the existing 1200 sqft single story home to build a 2900 sqft two story home.

Please contact me at lionel_lei(at)yahoo(dot)com thanks.


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Posted by Samir
a resident of another community
on Sep 28, 2013 at 8:09 pm

Hi I am new to this forum and would like to get in touch with any builder who is in the $150 - $190 range for a new construction. We're looking to build a custom home but we're hearing prices in the $350 range, which makes a custom home build beyond our reach.

I can be reached on samirsavla (at) gmail (dot) com


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Posted by Ceci
a resident of Woodside
on Oct 26, 2013 at 7:21 pm

Hi, new to this site was well. I had hoped to build on an empty lot in a wooded area of Woodside off Skyline. After hearing a whopping cost of $450 per square foot, I may be living in a tent. Any feedback for a prefab in a wooded area in Woodside? Would it be lower in cost vs. wood frame home? I did research cement block vs. wood frame figuring the former would have been less expensive but, alas, no. I also would like to use as much reclaimed products as possible.

Any ideas out there?

Thanks!


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Posted by badexperiencetoo
a resident of Another Palo Alto neighborhood
on Oct 27, 2013 at 10:30 am

@paresident in Crescent Park

Your bad experience story reads the same as ours in Palo Alto! Be very careful whom you hire. Check references thoroughly and really talk to people. If you hear some hesitation, pay attention to that.


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Posted by Voice of expwrience
a resident of Old Palo Alto
on Oct 27, 2013 at 1:39 pm

Word of mouth is probably the best reference you can get. There are loads of unscrupulous architects, contractors, nd subcontractors. They will not honor estimates or contracted costs. They will hold your house hostage for months, even years.

You will also have to deal with unscrupulous inspectors in the permit dept. I know of two PA residents and one developer who had to use bribes to get the job permitted and inspected within a reasonable time frame.

I have remodeled 3/4 of my house so far, and if I had to do it over! I would just sell as is and buy something more suitable elsewhere. Being without a kitchen, cooking on a hot plate and microwave and washes dishes in the bathroom, for six months, was unbearable. Never again!


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Posted by Neighbor
a resident of Charleston Gardens
on Oct 28, 2013 at 11:19 pm

You should really consider a complete scrape. I speak from experience, my 1951 house sits on a slab floor. When I had my living room pushed out, the wooden floor had to be replaced, and we discovered the original concrete slab floor had a huge crack front to back with smaller cracks in other areas.

Since 1951 there have been too many earthquakes, and concrete slabs are just too vulnerable to cracking and breaking. Now, when I sell my home, I'm going to have to disclose that the concrete foundation has cracks in it. Otherwise it's a very nice house!!!

The south end of Palo Alto where I live was once farmland and when I had a wooden deck removed there were huge chunks of broken concrete underneath; the remnants of an old cattle shed that the original developer had been too lazy to remove - no wonder he went bankrupt!!!


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Posted by SCGardenHomeOwner
a resident of St. Claire Gardens
on Jan 12, 2014 at 12:19 pm

Hi, hope this thread continues.

I have a 1951 Eichler and plan to either rebuild/remodel it and want to keep the cost minimal or at least make most out of the money spent. Here are the reasons I want to rebuild : 1) home twists maybe due to weak foundation (depending on weather and moist in soil, shower doors and room doors don't close), 2) too small (1,024 sqft).

The question is 1) does twisting home mean cracked slab, how could we tell? 2) is remodeling not a good option, 3) how much does it cost per sqft nowadays, 4) how could I run around to cut down costs?

Thanks!


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Posted by Crescent Park Dad
a resident of Crescent Park
on Jan 12, 2014 at 1:58 pm

Like many on-slab homes of that era, the construction requirements for slabs and foundation were not nearly as stringent as they are today. Without seeing your home, I would venture to guess that your foundation has settled over the last sixty years and you are now seeing the visible and physical results.

It is hard to give advice without knowing more and/or seeing your house. But if you're planning to significantly remodel the existing house and also planning to increase the living space to say double of what you have...I would seriously consider tearing down and building new.

The obvious benefit is you can build a house exactly as you want it and in the style you like best. Building new is typically less expensive per square foot than remodeling. And given that it sounds like you have some foundation/slab issues...I would expect a bunch of unexpected costs to creep in as the problems are revealed during demolition or (worse) during construction. Also - building new will go much faster.


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Posted by One who knows
a resident of Another Palo Alto neighborhood
on Jan 12, 2014 at 2:00 pm

Eichlers are extremely difficult to remodel due to the poor quality of materials used, and the fact that they are nowhere near current codes of Palo Alto. They are excessively thin-walled as well. All,of the changes you wish to make would necessitate a total tear-down, largely due to the bad foundation and cheesy construction. The city will insist you bring the whole house up to current code, as they did with ours, and it is actually cheaper to start from scratch or buy a new house. A new, larger, two-storey house with a full finished basement can be built for about 450K. AND, you cannot be taxed for the square footage in the basement.


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Posted by SCGardenHomeOwner
a resident of St. Claire Gardens
on Jan 12, 2014 at 11:56 pm

Thank you so much for quick responses Crescent Park Dad and One who knows! Sounds like tearing down and rebuilding is what should happen then. Didn't know basement is not subject to property tax. If there is a trustworthy general contractor or architect to consult, please share it for me.

Thanks!


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Posted by Crescent Park Dad
a resident of Crescent Park
on Jan 13, 2014 at 10:44 am

I think the correct characterization for a basement is that it doesn't count towards your square footage calculation. So if your property limits your sqft to (say) 2500sqft, the 1000sqft basement does not count in that total...only what living space is built above grade.

However, a basement is still considered an "improvement" on your property (same as just building a slab or building a standard foundation with crawl space) and is subject to calculating your property tax. The basement cost will also figure in towards the calculation of your permit fees.


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Posted by palo alto resident
a resident of Embarcadero Oaks/Leland
on Jan 13, 2014 at 7:17 pm

@garden home owner - it also seems that in Santa Clara county, newly built homes are not assessed at their true market value. A family down the street bought a home, tore it down and built a new home. Their house is assessed at $3.2 million or so when the market value when it was completed was probably 4 -4.5 million. (Two houses on the street recently sold for 5.2 and 6 million). Good to save on your property taxes!


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Posted by Crescent Park Dad
a resident of Crescent Park
on Jan 14, 2014 at 11:28 am

Property tax assessments are not based on market value. They do look at the value of the land, but the value of the improvements (the building itself) is based upon what it would take to build it.

Market prices can go up or down. Note that during the recession property prices went down, but property taxes did not follow suit.


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Posted by anonymous
a resident of Duveneck/St. Francis
on Jan 14, 2014 at 2:47 pm

Hi, SCGardenHomeOwner,
I have owned some Eichlers in past (not currently) and not in Palo Alto. I recommend looking into Eichler-specific information resources, easily found on the web. Consider speaking with Eichler owners in Eichler communities outside of Palo Alto, there are tons of such homeowners out there. Successful remodels are possible. Each Eichler IS individual and each development and city/soil conditions and so on but a lot can be learned.
Palo Alto is not the epicenter of the universe, but often claims to be, and I would spread your wings and look outside of Palo Alto for help on all your interests Eichlerwise.


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Posted by Crescent Park Dad
a resident of Crescent Park
on Jan 15, 2014 at 11:42 am

At the risk of annoying the Eichler fanatics, I would like to state (I have remodeled an Eichler) that it is not easy to remodel and/ or update an Eichler.

Want to update your wiring and/or increase the power to 200 amps? No crawl space...soooo, run it on the roof or open up all the walls...the wood paneling is old and brittle, will need to replace with Sheetrock.

New plumbing? Open up the walls or over the roof. New sewer line? Got to run it on the outside of the house...

New windows? Replacement double pane glass is expensive because there are only a couple of vendors who specialize in Eichlers.

Significant remodels will cause the city to require you to bolt down your exterior walls, as well as add shear wall panels at all of the exterior corners of your house.

And there is the lack of wall and ceiling insulation...the heating system, etc.

Way easier, less expensive and much more faster/efficient to tear down and build new.


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Posted by ModularHomeOwner
a resident of another community
on May 10, 2014 at 12:30 am

We built a custom designed modular/prefab home in Cupertino back in 2009/2010. We had very little headache as most of the house was completed at the factory, including kitchen and bathrooms. Our house was built on California Building Code, same as any other stick built house. We have no problem getting traditional financing; our house has been appraised based on the neighbor comp. We still hear many people making negative comments about factory build modular/prefab homes. We still see people hesitate to build this type of house. This type of house is well built, kilned dried wood, very sturdy construction to withstand hours of transportation. Our house is very well insulated; on two occasions, solar panel sales people, after seeing our PG&E bill, stopped making sales pitch and left quickly.

County Assessor initially assessed our improvement (house) value at the neighborhood's typical building cost which was a lot more than what we spent. We appealed, showed the paperwork and the assessed improvement value was reduced by closed to $200K.

Before pursuing the modular/prefab route, we found the low $120-$175 per sq ft stick build bids were loosely interpreted as "turn-key", but they were not. The house would typically be an empty shell, from the foundation and up, rough finish only, not even close to move-in condition. The owner is expected to separately purchase or pay for the finishing materials inside the house that at the very minimum, bathroom, kitchen, doors, lighting, trim work, appliances and often, upgraded windows. Permits, design/engineering, driveway, walkway, landscape, sewer, utilities are all excluded in the bid. This is not close to the construction's turnkey definition. In the end, when all the costs are added, the total is way higher than the initial expectation.

If anyone is looking to build a house, ask what items are included in the bid. Do not hesitate to ask hard questions. Do not assume you can build a house at $150 x 2,000 sq ft = $300K all inclusive. It is better to know what you are getting into before the process starts. Finding out you have major cost overrun during the construction is not a good feeling.


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