The Expert Podcast

As a licensed building general contractor, we see the realities of the building trade and the economy affecting reconstruction and new construction of homes every single day. This whole Los Angeles Fire, Pacific Palisades, and all the areas that were burned are bringing a lot of this to the forefront of public news. The contractors in Los Angeles are saying equity is gone—new construction will be expensive.

What does that mean? Well, even though you may have an insurance policy on your house that covers the value of your house, the construction of a new house might cost two times as much as what your insurance policy covers. How is that possible? The new building laws might require a higher level of construction—maybe more resiliency for earthquakes, better fire protection, or updated codes. The NEC electrical code comes out every few years with new rules about building requirements. When you got your insurance policy and they put a value on your home per square foot, that was done using the codes and policies at the time.

You may find that building a new home, especially in a disaster area where thousands of homes are being rebuilt at the same time, will be even more expensive. Labor costs might go up due to supply and demand. Getting materials to the job site might be more difficult because of road conditions.

In the meantime, remember that actualhuman.com offers live one-on-one private video consultation with an expert in this exact subject. We want to listen to your story, hear your questions, and provide expert advisement on your options. Now, back to your video.

Construction costs are going to be a lot higher, which means if you are getting an insurance policy on your home, you may want to look at higher coverages so that you can afford to rebuild. Remember, you’re already going to lose your deductible—whether it’s a couple of thousand bucks or $5,000, whatever it is. You also need to factor in that building a new home might be more expensive than the construction value of your previous home.

In addition, you’ll find that building new homes comes with a completely different landscape of zoning, permitting, and requirements. Some of these might change as new homes are built in Pacific Palisades. They may also rezone some properties to multifamily, meaning that the replacement value of your house once it’s built might be lower. For example, if your home used to be next to single-family houses but is now next to an apartment building, its value could be affected.

You should take all of this into account and talk with a general contractor. Click the link below if you have questions and want information on what it might cost to rebuild your house. The realities of reconstructing a home to replace your 20-, 30-, or 40-year-old structure may be very different. You might have a better house, but you could end up cutting some corners on luxury items such as fixtures, furnishings, countertops, and cabinets. These may not be as nice as what you had before, just to keep up with the base cost of construction, which might be significantly higher for a new build in your area.

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