Cost per square foot to rebuild in San Francisco?
Our homeowner's insurance renewed this month and the fire insurance dwelling limit increased to $543K based on estimated replacement cost (RC) of $417 per foot - which seems high, but I'm no builder. Our insurance agent cited their in-house estimator and GC's "word on the street" of $400-$500 per foot up to $1,200 per foot here in SF. But our home is hardly one of those homes that would grace the cover of Dwell magazine. Trust me.
Help
Can any SF builder/GC weigh in on estimated RC and advise one way or another what a decent cost per sq ft is?
Our House
We have a modest 3BD/2BA home, 1,300 sq ft, build 1939 with stucco and wood siding, updated 20 years ago. It's sort of a split level: enter home to the main level, go up a half flight of stairs to two bedrooms, go down a half flight of stairs to an office/utility room and one car garage and storage, from there, down an another half flight of stairs to a family room/3rd bedroom and second full bath.
In our now "dated" kitchen we have Kitchen Craft cabinetry, 20 year old granite and stainless Frigidaire fridge, Wolf stove, and a 5 year old Bosch dishwasher; the kitchen flooring is laminate. The home flooring is mostly parquet hardwood, but also tile in one bathroom, painted pine flooring in the other one, and some doug fir in the family room and a large utility/office space. We have "big box store" crown, base and chair rail on the living level, but less detail upstairs. The bathrooms have 20 year old Kohler and Moen fixtures. The windows, electrical, plumbing and furnace were replaced 20 years ago. The washer and dryer are as old as dirt but work great. The roof is new (ish).
Correct Fire Insurance Dwelling Limit
Do any of the home's finishes and fixtures matter since I am subject to the dwelling fire limit anyway? How does a homeowner arrive at the right dwelling limit? I know it's not the market value of the home, nor is it the tax appraised value; the home is supposed to be insured for estimated replacement cost value, so the home can be rebuilt to "like kind and quality" in the event of a total fire loss. But I don't want to over insure us (or under insure us).
My Research
a) An online RC estimator I used adjusted for zip code, building material and dwelling finishes, and came up with $264 per foot in the "standard building materials meeting building codes with standard big box store finishes and fixtures" category for our zip code. Our insurance agent ignored this estimate and cited his in-house estimator tool, which I get he's obligated to use.
b) I called two SF contractors asking their professional opinion of RC in SF and they didn't call back, but I didn't follow up either.
c) Connect Homes (pre-fab, green builder) did give me a new build estimate but they have yet to build in SF. Two clients planned to but didn't build because they didn't want to wait the 2 year planning approval process happening then (do most new construction projects take that long in SF planning?) Their cost per SF was about $400-$500 but that is for a green "build" which I think is usually more expensive than standard.
No Conclusion
So what dwelling limit should I use for my fire insurance policy? Are any SF builders/GC's in the mood to weigh in on estimated RC in SF?
Comments (23)
PROMark Bischak, Architect
4 years agoHow many San Francisco builder/general contractors do you think are reading this?
PROUser
4 years agoIs there any home in your area that is actually being built for 800K? I find that doubtful. If you don’t ensure for what homes are being sold for? What happens then?
chispa
4 years agoTCK, the issues is that in places like SF, the bulk of the price that homes are being sold for is land value, so not as easy to figure out the actual value of the structure.
I agree with Kudzu, that it isn't an area you want to skimp on. After having done major remodeling the last few years, I always think that my HO insurance isn't using replacement costs that are high enough to cover a total rebuild with the higher quality of materials that I have used in the home.User
Original Author4 years agoKudzu, we have a homeowner’s policy for a catastrophic loss, yes, not for minor losses. And I agree about being “penny wise, pound foolish” At the same time we’ve been paying our premiums for two decades without question. It’s prudent to actively understand the basis for premium I’m trying to decide if the dwelling limit is right. Without additional information I defer to my insurance co. Mark, there are 61 SF GC’s on Houzz. I have no idea how many are reading this.
User
Original Author4 years agoChispa, did you and your insurance co. increase your insurance (dwelling limit) after your remodeling?
chispa
4 years agoWeathy, the first time I made a comment about the coverage not being enough, the insurance company sent out a person to do a review of the property and we upped the numbers just a bit. It has been a while now so don't remember all the details. I remodeled my kitchen last year and I'm sure whatever math they use will not cover the finishes I used. I guess as long as you have the words "full replacement cost" in the policy and can prove what was in the house, you might have a shot at getting it all covered ... it will probably not be an easy or painless negotiation!
User
4 years agochispa and all others: Catastrophic damage replacement. To prove your losses you should video record your home's interior (and pertinent exterior). Put the video off-site. If you have major purchases (home furnishings or clothes or whatever) or remodeling expenses, photo and digitize the receipts. Also keep these off site. Off site doesn't mean it has to be a bank vault, it can be your grandmother's house in the next town. Just not in or near your home.
NYCish
4 years agoWe live in a HCOL area, and an expensive area to build in (reference my screen name). For our new condo, (walls in insurance) I had to argue strongly to DOUBLE my replacement value of my home. I spoke with our builder and our agent who is local developer of similarly priced homes. The insurer agreed and increased our replacement value; our annual premium increased too of course, ha. Labor and good contractors/subs are expensive. Building here is expensive. Building in an urban area is more difficult, takes more time, and is expensive.
PROJeffrey R. Grenz, General Contractor
4 years ago- online estimators are garbage.
- always buy guaranteed replacement value
- always buy guaranteed code updates
- the 2020 CA energy code updates will cost tract home builders $25-30k
- I'm 90 miles east. my homes build $200-300 per foot. I get offered 2-3x to head to the north bay but I know my labor will double.
- my costs are for suburban projects. it's even more costly in parking restricted areas like yours.
- I'm surprised anything can be built under a mil in the city.
do you feel lucky?
PROMcCutcheon Construction Inc.
4 years agoHi, I just saw this. For a new home rebuild you are, at a minimum, at $700 per sq ft and probably closer to $1,000.
User thanked McCutcheon Construction Inc.mcbmd3
4 years agoI lost my house in Sonoma in the 2017 wildfires. I was slightly underinsured. The building costs there have tripled since then. So I thought I would check on the square foot price to rebuild my house in San Francisco. What a shock. My policy was 1/3 of the current price per square foot! My insurance agent did not want to increase my policy limits. So we ending up getting a neutral third party estimate.
I would gently suggest that you, at minimum, should increase the price per square foot price to $700- $800. I know it’s shocking. You are woefully underinsured.
brian danker
3 years agoI live in Redwood City our 4 bedroom 2 level house was built in 1954. We remodeled in 2013. cost us $300,000. I became concerned after close friends lost everything this past month in the Boulder Creek fires.
We are insured with Mercy Insur Our home insurance coverage was set at a $447,000 to rebuild. I called my agent last night expressing my concern that that cost to rebuild could range from $350 to 700 a square foot. Meaning it could cost as much as a million dollars to rebuild our 1900 square foot home.
I asked to change our policy to a $600,000 replacement cost. Our agent Reassured me that our policy has all kinds of contingent that would cover us.
Thank you Brian Danker
Robin Rouda Newman
3 years agoWe just obtained one quote for remodeling 400 sq ft of our 1700 sq ft circa 1930 stucco home in Menlo Park, CA. Guess what the cost is per sq foot as of 9/2020? $900. This doesn't include sprinklers, or fake shake on the roof, or all the cabinetry we'd like for the mudroom.
We remodeled a 1200 sq foot home a few towns away (Redwood City) in 2007, adding 1200 sq feet, and that cost us $350/sq foot.... prices have tripled guys.
- PRO
Jeffrey R. Grenz, General Contractor
3 years agoPrices rise exponentially in the bay area force construction workers to find housing further away and nearer to the busier valley, a biproduct of thousands of new projects that don't get approved.
kudzu9
3 years agoAnd there is a lot of pent-up demand due to the pandemic, and because people are focusing on their homes as they are spending so much time there. Over-demand for limited resources drives up prices quickly. I think prices will be less stratospheric when we return to a more normal situation, but I'm not predicting that will be anytime soon.
HU-993713480
2 years agoMichael Short, Insurance Agent South Bay
Great questions and answers. Before this life I was in the Mechanical Contracting business large commercial.
There are some great answers in the threads above.
1. Know why you are getting the insurance and what it is you are protecting ( for all lines, but for the sake of discussion keep on homes you live in although most people auto is their largest liability).2. As you are doing now find out the rebuild price per sqft. in your area
3. All fires are not equal. Your home burns down you can take bids negotiate, prices remain what they are. All of the homes in your area burn down forget it. Like my dad used to say ... son the price of poker just went up, right before he would take all my money :). Not enough contractors to go around highest bid wins.
4.How much would a vacant lot or a burned down house sell for. In Willow Glen I saw a burned down home sell roughly $800k ....
5.Prices go up they don't go down especially in these times... sheets of plywood last year home depot 7-10 dollars each now 50-60 dollars!!!
Your insurance agent should give you price/s on per sqft cost to rebuild In the end its your home and your decision. Your agents job is to give you the information to assist you
If your looking to save money go with a high deductible and do the math 10k vs 20k ded. Remember you don't come out of pocket on your home owners insurance claim. Whatever the "approved claim" is they take that ded amount and pay you the difference. Like one person said know what you need to rebuild and know what you need to walk away with and not be sick to your stomach. New home owners that put down 1.5% may be in a much different situation then someone with 50-100% equity. Hope this helps
You can shoot me an email if you have any questions.
mshort@farmersagent.comsushipup1
2 years agoM Short,do you know that you resurrected an old thread and that the questions were answered?
kudzu9