On construction costs, the costs are made up of 3 main components.
1) Labor costs. Those costs have been going up. But as layoffs hit the industry, they will only come down as the current projects are completed and no new projects are on the horizon.
2) Overhead/markup costs. Those consist of mostly builders’ profit, and other costs as supervisory costs. Design profits, etc… Contractors basically want you to pay for their profits but as the work dries up, those will come down drastically.
3) Commodity costs (lumber, sheet rock, etc..) As fewer and fewer projects get green-lighted, the demand for commodities will drop sharply. Look for lower commodity prices.
The building industry has a vested interest in justifying their costs so look at their data in that light.
My take is that the basic cost of building a house in SD is no more than $80/sf, excluding the land.
