Building a custom home in San Jose offers an exciting opportunity to design a space that’s truly your own. But with rising costs across California, one of the first questions smart homeowners ask is: “How much will it actually cost?”
At Top Home Builders, our experienced project managers help Bay Area residents turn their vision into reality—on time and within budget. Below is a breakdown of what goes into building a custom home in San Jose in 2025, from land purchase to finishes, so you can prepare with confidence.
Home Building Cost Breakdown in San Jose
The average price for a new home sold in the United States in March was $349,400, making the prospect of building a custom home better than ever. But how is that cost broken down, and how can you ensure you are getting the most value out of your money?
1. Land Acquisition
Before construction begins, you’ll need a buildable lot. In San Jose, land prices range from $400,000 to over $1 million, depending on size, location, and zoning. Your real estate agent or developer can help identify whether demolition, soil tests, or grading are needed, which all add to your budget.
2. Site Preparation
Site prep costs in the Bay Area can run from $10,000 to $80,000+, depending on:
- Demolition (if there’s an existing structure)
- Tree and debris removal
- Utility access: sewer, water, gas, electricity
- Soil grading and permits
3. Architectural Plans & Engineering
Depending on your project scope:
- Architectural design: $5,000 – $20,000
- 3D renderings & structural engineering: $2,000 – $10,000
- Drafting for minor modifications: $1,500 – $3,000
What Affects the Cost of Your Custom Home?
Many variables influence your final construction budget:
Size & Complexity
The larger or more intricate the home (e.g., basements, multi-level, vaulted ceilings), the higher the cost. A sprawling one-story home may cost more than a two-story of the same square footage due to a larger foundation and roof area.
Materials & Finishes
Choosing premium materials (hardwood floors, stone countertops, high-end appliances) can dramatically impact cost. Your project manager will walk you through cost-effective alternatives where needed.
Labor & Market Conditions
Labor shortages, material delays, or high demand can impact timelines and pricing. Lumber, concrete, and copper have all seen price spikes in recent years—something our team continuously monitors to help you plan.
Location & Permits
San Jose’s zoning laws, permit fees, and inspections can vary by neighborhood. Plan for $30,000 to $70,000 in city and permit-related fees depending on project scope.
What Is the Process For Building a New Home?
Before we put a shovel in the ground, your project manager will outline the schedule and budget for your project. This includes any work that needs to be completed before we begin digging, such as demolition and putting in site services.
Below is a breakdown of the entire building process so you can plan your timeline and budget.
Prep Work – Site Preparation
Now that the land has been purchased, it is time to prepare it for building. This may require demolishing existing buildings and excavating the land. You may also be required to add services to the property like hydro and sewer hook-up.
Floor Plans
While your site is being prepared, you will likely begin working on and modifying your floor plans. Your plans will be developed by an architectural engineer who will review your ideas and incorporate them into a blueprint and 3D rendering. These services cost between $2,000 and $10,000.
If you are working off an existing blueprint or design that only requires minor modification, then you can use the services of a draftsperson who usually charges a fee of $1,500 to $2,000.
Building Your Dream
Foundation
Now that the designs are completed and the land is ready, the building can begin. Foundation costs are usually the first expense of building your home. Depending on the size and how you plan on using the lower level of your home will determine the cost of the foundation.
The most common types of foundations are
- Concrete slab
- Crawl Space
- Basement
Framing
Once the foundation is complete, the construction crew can begin setting up the framing. This will give you a better idea of the scale and look of your home. Frame costs run can run upward of $20,000 depending on the size of your home.
Exterior Finishes
When the framing is complete, the exterior finishes can be added. The cost for these can vary greatly spending on the material you have chosen.
- Brick
- Siding
- Roof
- Windows
- Doors
Your project manager will be able to help you find the right materials and finishes for your home within your budget. It is important to determine these materials at the beginning of the planning process to create a more accurate cost outline.
As the exterior is being completed, the construction team may move onto the interior features including utilities like plumbing, HVAC system, and gas hook up.
Electrical hook up can cost upward of $20,000.
HVAC Systems run between $1,500 and $13,000 depending on whether you choose duct or ductless systems.
Plumbing installation costs run between $1,500 and $20,000 depending on the number of bathrooms and kitchen services in your home.
Interior Finishes
The interior of your home is where your style and personality shine. These finishes include insulation and drywall as well as paint, flooring, cabinetry, finishes, and accents.
The cost of interior finishes depends on the materials you choose and can vary in price. Most homeowners can expect to spend upwards of $100,000 on quality materials that will last a long time.
Additional Costs
Homeowners should always factor an extra 10% in cost overruns into their budgets. This will allow for changes in the cost of goods, shipping and delivery costs, and changes in material availability.
At Top Home Builders, we take pride in being an expert home remodeler that San Jose residents can rely on. We are also more than just a construction company – we provide our customers with exceptional home remodeling services to suit their every need. We’re happy to serve many locations across California including Fremont, Hayward, Milpitas, Mountain View, Palo Alto, Pleasanton, Redwood City, San Bruno, San Mateo, Santa Clara, Sunnyvale, Atherton, Cupertino, San Carlos, Belmont, Saratoga and the rest of the Bay Area.