123k views
5 votes
A relatively new house contains 2,500 square feet of space. A similar, 2,600 square foot house built recently cost $338,000 to build, excluding the land costs. What is the estimated reproduction cost of the 2,500 square foot house?

User Idalia
by
8.6k points

1 Answer

5 votes

Final answer:

The estimated reproduction cost of a 2,500 square foot house is approximately $325,000, assuming a cost per square foot of $130.00 derived from the cost to build a similar 2,600 square foot house. This estimate assumes steady housing prices and does not take local variances or changing economic conditions into account.

Step-by-step explanation:

The estimated reproduction cost of the 2,500 square foot house can be calculated based on the cost per square foot of the similar house. To find the cost per square foot for the similar 2,600 square foot house that cost $338,000 to build, we divide $338,000 by 2,600 square feet. This gives us a cost per square foot of approximately $130.00. By multiplying this rate by the square footage of the new house, we can estimate the reproduction cost for the 2,500 square foot house: $130.00 multiplied by 2,500 square feet equals $325,000.

It is important to note that housing prices have risen steadily over time. For instance, from 1990 to 2016, home prices increased an average of 3.1% per year. Local differences and economic conditions at the time may influence the final building costs. The figures provided here do not account for such fluctuating factors and are a simplistic estimate based on the cost of a similar house.

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.