CoreLogic® uses property data to analyze how much barndominium homes and other structures cost to build
Those who have undertaken the herculean task of house hunting in the current market have likely come across the luxury barn conversions known as barndominiums.
Barndominium homes are a fast-growing trend in America, and they are typically constructed by renovating an existing barn or agricultural building to transform it into a residential living space. Even though barn-style dwellings have been around for centuries, the current trend has raised the bar on quality, style, options and cost, making it a desirable alternative to traditional housing.
So Why Are Bardominiums Such a Cost-Effective Option?
As the price of traditional homes continues to climb — albeit at a slower pace — homebuyers have begun to look outside of the conventions that have long-defined home search criteria. While tiny homes and van life have taken hold among more adventurous spirits, barndominims present a viable alternative for buyers looking for lower-cost living with ample access to both indoor and outdoor space.
While the sweeping interior spaces and vaulted ceilings transform these former agriculture frames into luxury living, they are not available everywhere. Within the U.S., most barndominiums are located in rural areas, particularly in the South, where many people have flocked in recent years and home prices have increased since the pandemic.
Although home prices may have risen in many areas across the South in recent years, constructing a barndominium does not require the same financial outlay as a traditional vinyl-sided, wood-framed structure. According to CoreLogic’s Marshall & Swift® construction cost index, a typical cost for building a 3,000-square-foot, quality traditional home has a base construction cost of around $500,000. This figure can fluctuate depending on the location, materials and other factors.
In contrast, constructing a barndominium with a luxury interior can have a base cost of under $200,000. This figure can vary depending on the level of finishes, location and other factors.
As this alternative housing option is typically built on an existing foundation with established structural elements, the overall building costs can be drastically reduced. Even if you build from the foundation up, your cost could still be lower than a traditional home due to open floor plans with less partitioning. At a base level, constructing a conventional home has a price tag that is over 200% greater than a converted barn. This cheaper housing option is particularly advantageous for homeowners who must consider reconstruction costs in the event of damage from natural disasters and other hazards.
Construction Costs Do Not Always Translate to Market Home Value
Construction costs do not always translate to market home value for barndominiums or any other type of residential property, for that matter. Rather than accounting for the value of the materials in a building, the market value factors in other qualities, such as location, size, condition, amenities and, perhaps most importantly, market demand.
Although some buyers may place a premium on the unique design and lifestyle versatility of a barndominium, others may not hold the same view since these highly custom homes can face challenges such as subjective market valuations.
Nevertheless, knowing the costs associated with the materials used to make a home, and calculating their depreciation, can lead to educated decisions on construction component choices and interior costing to maximize luxury barn living while minimizing costs.
Whether it’s time to construct or it’s simply time to renovate, Marshall & Swift data can be used to tabulate market prices and give a comprehensive view of the construction costs that influence a building’s value.
©2023 CoreLogic, Inc. The CoreLogic statements and information in this blog post may not be reproduced or used in any form without express written permission. While all the CoreLogic statements and information are believed to be accurate, CoreLogic makes no representation or warranty as to the completeness or accuracy of the statements and information and assumes no responsibility whatsoever for the information and statements or any reliance thereon. CoreLogic® and Marshall & Swift® are the registered trademarks of CoreLogic, Inc. and/or its subsidiaries.
