How Much Does it Cost to Build a House in Irvine?

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Although the city of Irvine is only relatively new compared to other cities in California, it quickly became popular with growing or new families. The city is consistently listed as one of the best places to live in the country. In fact, the FBI ranked the city as one of the safest ones for 12 years in a row. Irvine is known to be a family-friendly town. It has miles of bike routes, rows of charming homes, and 20,000 acres of green space perfect for various recreational activities. Not to mention, it is nearby almost everywhere. Residents can go for a quick beach trip as the Pacific Ocean is barely 10 miles away, or the family can have fun and enjoy Disneyland, which is only 15 miles away.

Aside from its attractive lifestyle, Irvine also boasts its ever-improving economy. Since its formal incorporation 50 years ago, the city quickly developed into a thriving one becoming home to various higher education institutions and numerous tech companies. Irvine offers almost anything residents would want. That’s why the city’s population grew by 32.6% in the last decade — from 2012’s 230,000 residents to 2022’s 305,000 residents.

The Cost of Building a Home in Irvine

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According to the National Association of Home Builders (NAHB), constructing a new single family home in the United States will cost around $300,000, excluding land costs. In terms of square footage, Forbes estimated that it ranges between $100-$500 per square foot — about $250,000-$1,250,000 for a 2,500-square-foot home. The cost is directly influenced by the project’s customization, complexity, finishing, size, and location. The average sale price of newly constructed homes, on the other hand, roughly costs $500,000, as per the U.S. Census Bureau.

With an average contract price of $160 per square foot, home building in the West is the most expensive among other regions. Following the trend is the home construction costs in Irvine ranging from $200 to $500 per square foot. Despite being relatively high, it is still within Forbes’ estimated range. Value-conscious homes cost between $200 and $300 per square foot, mid-range homes cost between $300 and $500 per square foot, and high-end homes cost $500 per square foot and beyond. In order to build a 2,500-square-foot home in Irvine, aspiring homeowners need a budget between $500,000 to $1,250,000.

As home construction costs in Irvine rise year after year, strategic preparation is required to guarantee the greatest possible outcome. Aside from the estimates mentioned above, there are other costs to consider while building a home. This includes construction costs, land costs, permit fees, architectural fees, and extra costs. These are separated into two categories: hard costs and soft costs.

Hard Costs

Hard costs pertain to the factors involved in the physical building of the home. This includes the construction costs, materials, labor, and landscaping. Extra amenities or home additions are also included in this category, alongside heating, ventilation, and air conditioning (HVAC), electrical, and plumbing systems.

A custom home in Irvine costs about $160 per square foot on average. This estimate mainly includes basic construction. It is also possible to cost as low as $140 per square foot or as high as $310 per square foot. The price varies depending on several factors, including material quality, labor costs, complexity, size, and design, all of which directly impact the final building cost. Building a 2,500-square-foot home in Irvine will cost around $350,000 to $775,000, excluding site work, land, and other non-construction costs.

Listed below is the estimated price breakdown of each home construction service:

Labor Fees, as per ZipRecruiter:

Construction Manager: $41 per hour
Carpenter: $23 per hour
Electrician: $26 per hour
Plumber: $27 per hour
Framer: $19 per hour
Roofing Contractor: $24 per hour
HVAC Technician: $25 per hour

Figure 1. Typical cost breakdown of a single-family home constructed using the conventional method, according to Home Builder Digest.

Soft Costs

Soft costs refer to the fees that go beyond the actual building of the physical home. Usually, these expenses are planned and settled before the construction begins. This category includes fees associated with land acquisition and development, authorizations from the local government, and the overall appearance and layout of the home.

Figure 2. Soft cost percentage and average price range of additional fees, determined from the overall cost of custom home building in Irvine.

Cost of the Land

Unlike other cities, aspiring homeowners can’t buy land in Irvine. A non-profit organization called Community Land Trust (CLT) owns the land and leases it to homeowners. Land use will be exclusive to homeowners for 99 years, and this contract is renewable. The ground lease fee costs $150 per month for ownership properties while rental properties cost $50 per month. This fee will increase with time but never above the cost of living, and is also factored into the initial buying price. Keep in mind that the ground lease has several limits on how the property may be used. On the bright side, homeowners will get a fixed-rate mortgage which allows them to budget their monthly mortgage payments effectively.

The CLT established this process to provide permanent affordable housing. In the event the homeowners wish to sell their home, the resale formula determines the future sales price. It is designed to generate an acceptable return on the homeowner’s investment while keeping the price below the market rate. This will ensure that the home is affordable to the next income-eligible buyer.

Permits and Other Fees

Every house construction project requires a permit from the local government. This ensures that properties meet the building code’s requirements, protecting everyone’s safety. This will also serve as a signal to start building. All permits must be submitted through the city’s IrvineREADY! permit system. For in-person assistance, appointments must be made to the Community Development Counter.

According to Irvine’s building and safety fee schedule, there will be an initial fee of $48.40 for the code permit issuance. As for the building fee for new home constructions, it is dependent on the total square footage of the project. The permits necessary and their respective fee is shown in the table below:

Assuming that project owners want to build a 2,500-square-foot home, this project’s total building permit fee will land at roughly $2,400. This estimate also includes plumbing, mechanical, and electrical fees.

The Community Development Office offers a Plan Check Submittal Quality Incentive. This incentive aims to encourage complete initial plan check submissions that follow all city regulatory standards. Only new building constructions and grading projects over two acres are qualified to apply for the incentive. Once the qualifying project is approved on the first plan submission, 30% of the plan check fees will be refunded. This refund does not extend to fees apart from plan check fees.

Architecture and Design Fees

Before making any final decisions, a detailed plan must be prepared. There is no guarantee that the home will be finished in the manner that the homeowners desire without one. Architects assist them in this area by developing designs and guides suitable for the client and the home. It also guarantees that the house is constructed in compliance with local regulations.

Architects charge their clients in a variety of ways, with percentage and hourly costs being the most common. The percentage technique is the most popular. Architects in Irvine often charge 13 to 14% of the total construction cost, depending on the complexity and scope of the project. Suppose building a 2,500-square-foot home in Irvine costs $400,000. The total architecture fee for this project will come between $52,000 to $56,050.

The hourly rate is a less commonly used method compared to the percentage. Architects typically charge $41 per hour, according to ZipRecruiter. A basic architectural service can take anywhere from 480 to 600 hours to complete. This will cost at about $19,700 to $24,600. On the other hand, a full architectural service can take up to 1,095 hours to complete. The total design fee will cost roughly $45,000.

How do Irvine’s custom home building costs compare to nearby cities?

California is one of the most expensive states to build a home in. It also has a relatively high cost of living, which is 49.9% greater than the national average. This value is heavily influenced by housing costs. According to Zillow, the average house value in the state is $940,000. It climbed by 40.3% from the pre-pandemic median home value of $670,000 in February 2020.

The overall home building costs in Los Angeles and Orange County range from $200 to $375 per square foot, and oftentimes more. Value-conscious homes in the area cost about $200 to $275 per square foot to build. On the other hand, mid-range homes and luxury homes cost about $300 to $350 per square foot and $375 per square foot and beyond, respectively.

Basic home construction expenses in California’s major cities are somewhat consistent, ranging from $130 to $180 per square foot — roughly $325,000 to $450,000 for a 2,500-square-foot home. As noted above, Irvine’s basic median building cost is $160 per square foot. The following is the median home building value for each city, including the percentage difference from Irvine:

Anaheim: $165 per square foot, 3.1% more expensive
Bakersfield: $130 per square foot, 18.8% cheaper
Fresno: $145 per square foot, 9.4% cheaper
Los Angeles: $165 per square foot, 3.1% more expensive
Oakland: $170 per square foot, 6.3% more expensive
Palm Springs: $150 per square foot, 6.3% cheaper
Sacramento: $150 per square foot, 6.3% cheaper
San Diego: $180 per square foot, 12.5% more expensive
San Francisco: $170 per square foot, 6.3% more expensive
San Jose: $180 per square foot, 12.5% more expensive

The Future of Irvine’s Residential Construction Industry

Housing and real estate in California have been consistently thriving year after year. People across the nation have flocked to this diverse and prosperous state, especially millennials, wanting to experience the lifestyle and seek various job opportunities. It created an uncontrollably high demand for housing. This, coupled with the pandemic-related lack of home inventory, created a price surge in home prices. As mentioned earlier, homes in California are currently valued at $940,000, which is a 40.3% increase from two years ago.

Although its neighboring city of Los Angeles (LA) is the state’s biggest city, Irvine is more expensive than LA. In fact, Irvine’s overall cost of living is 8% higher than LA. Still, a common trend is seen among Los Angeles residents who decide to relocate to Irvine. The city offers a more calm and slower lifestyle compared to LA, yet close enough to experience LA’s vibrant lifestyle and well-paying jobs. Like California, this sudden, uncontrolled demand pushed home prices to increase. Single family homes in Irvine are currently priced at roughly $1,600,000 — a 33.3% increase from last year’s $1,200,000. Experts believe that this value may still continue to rise and that it is unlikely for the city’s hot market to decline. Even if builders in the area complete their housing projects ahead of target dates, it would only slow down the skyrocketing home prices and not decrease it.