What Is Price Per Square Foot?
Price per square foot evaluates a home’s value, considering location, age, condition, and renovations. A high or low cost per square foot alone doesn't indicate a good or bad deal.
How to Calculate Price Per Square Foot
Divide the home’s listing price by its total square footage. For example, a 1,000-square-foot home listed at $200,000 has a price per square foot of $200.
Neighborhood Average Price Per Square Foot
To find the average, add the price per square foot of comparable homes and divide by the number of homes. The median price per square foot is the middle value of these prices.
Why It Matters
Price per square foot provides a starting point for evaluating home value and space. It helps buyers compare similar homes and ask relevant questions about pricing differences.
Example
Two neighbors sell their homes: Brian & Tina updated a 1,500-square-foot home for $280,000 ($187 per square foot) and Christina & Bob's 2,000-square-foot house for $300,000 ($150 per square foot). Brian & Tina's higher price per square foot might reflect recent updates, making it potentially more attractive despite the higher cost.
Current Trends
As of May 2024, the U.S. median price per square foot is around $233. This can vary significantly by location, with high-demand areas like New York City exceeding $1,000 per square foot.
Median vs. Average Price Per Square Foot
Median:
The middle value in a set of prices, giving a more typical price for an area.
Average:
The total of all prices divided by the number of homes, which can be skewed by extreme values.
Conclusion
Price per square foot helps compare home values but should be used with other information. Consult a real estate agent for a complete picture of a home’s value.
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