Architects feel they are adding value but generally don't have any hard numbers to back it up. Using Ames, Iowa as a case study I am investigating what architects can take advantage of to create better designs while increasing value for the client.
The median home price in Ames, IA is $162,500. The average construction cost is about $119.08 per square foot and the average home size is 1450 square feet.
1450 sq. ft. times $119.08 per sq. ft. gives an average construction cost of $172,666.
Clients are already in the upper range of sales price when they decide to build a new home.
I started by cleaning the data set, removing outliers and checking to see which features correlate highly with Sales Price.
I used Lasso style linear regression in order to zero out some of the features. I then took the features that remained and brought them into a standard linear regression in order to keep interpretability.
One step up in Overall Quality will increase the value of the home by about $27,000.
Locating the Kitchen at ground level adds about $15,500 to the home's value.
Adding a fireplace adds about $8000 to a home's value.
Since clients start the process in the upper range of average sales, designers and architects need to be precise when designing.
Locating the kitchen above ground and adding a fireplace are simple layout recommendations that an architect can make that will add value to the home.
The upper range of constructions adds about $34,000 to construction costs. However, taking a house from average quality to excellent will increase the value of the home by about $54,000.
That is about a $20,000 potential profit for a client that may be pushing back on upgrades.
If you would like to learn more about my process and see the full project and code please visit the following Github link.