That sum also does not include general contractor overhead and profit of perhaps 12%, architect fees, building permit fees, structural engineering fees, planning review fees, school district permit tax, road impact fees, civil engineering fees, landscape architect fees, Title 24 consultant fees, soils engineering fees, etc.
If you were magically given a vacant lot for free in Palo Alto and wanted to build that house as shown with a basement, it would probably cost you about $2M in construction costs today. Again, that's assuming you got the land for free.