{"id":12881,"date":"2019-11-27T15:07:59","date_gmt":"2019-11-27T23:07:59","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=12881"},"modified":"2025-11-12T19:02:16","modified_gmt":"2025-11-13T03:02:16","slug":"buyer-average-price-per-square-foot","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-average-price-per-square-foot\/","title":{"rendered":"Why Average Price Per Square Foot Can Only Tell You So Much About a Home"},"content":{"rendered":"

\u201cI think people are often misinformed when it comes to price per square foot,\u201d explains Brandy Coffey<\/a>, an expert Sarasota-based real estate agent who\u2019s sold 79% more single-family homes<\/a> than other agents in her area. The average price per square foot only gives you a single number, which doesn\u2019t tell you much about the condition of the home, its amenities, and whether it\u2019s a good fit for your lifestyle.<\/p>\n

\u201cWhile the price per foot may seem like an easy way to compare homes, it is rarely a reliable method,\u201d explains Sacramento-based flipper Robert Taylor<\/a>, who\u2019s been rehabbing homes since 1999. When it comes to buying a home, the price per square foot can be a tool in your work belt, but it\u2019s just one tool. Ignoring a useful tool wouldn\u2019t be wise, but you have to understand this tool\u2019s strengths and weaknesses. Experienced real estate investors, agents, and others gave us their advice on using price per square foot to compare homes.<\/p>\n

\"A<\/a>
Source: (fuad Obasesan\/ Unsplash)<\/figcaption><\/figure>\n

What is the average price per square foot, and how is it calculated?<\/h2>\n

Let\u2019s go back to math basics to talk about average. You find an average by adding together a bunch of numbers, then dividing the total by the number of values you added together.<\/p>\n

The average price per square foot is calculated by the home\u2019s price, divided by the square footage:<\/p>\n

Price of Home \/ Square Footage = Average Price per Square Foot<\/p>\n

\u201cPrice per square foot is best used to compare properties<\/a> that are already similar in overall size, location, style, and quality of finishes,\u201d says Coffey. While no two homes are the same, price per square foot is most helpful when you\u2019re comparing two similar homes in the same neighborhood. The number provides context within the neighborhood where you\u2019re looking at homes.<\/p>\n

Let\u2019s take this into the real world, with three recently sold homes in the same neighborhood<\/a>. These three real-world examples sold within the past year in Pittsburgh, less than half a mile from each other:<\/p>\n

Home 1<\/b>: 2-bed 1-bath townhouse<\/a>, 1,000 square feet, sold for $271,000<\/p>\n

$271,100\/1,000 = $271 per square foot<\/p>\n

Home 2<\/b>: 2-bed 1-bath single-family home<\/a>, 1,366 square feet, sold for $375,000<\/p>\n

$375,000\/1,366 = $275 per square foot<\/p>\n

Home 3<\/b>: 2-bed 1-bath townhouse,<\/a> 1,088 square feet, sold for $215,000<\/p>\n

$215,000\/1,088 = $198 per square foot<\/p>\n

From there, you can add the three values together, and divide it by the number of homes:<\/p>\n

$271 + $275 + $198 = $744<\/p>\n

$744 \/ 3 = $248<\/p>\n

That means, on average, these similar homes in this area average around $248 per square foot. If you were home shopping in this same neighborhood<\/a> for a home sized somewhere between 1,000 and 1,400 square feet, $248 could be a guiding number \u2014 if a house is priced much lower per square foot, it could be a good deal (or a real fixer-upper). Higher than that average? It could be overpriced.<\/p>\n

\"A<\/a>
Source: (patricia serna\/ Unsplash)<\/figcaption><\/figure>\n

When price per square foot doesn\u2019t measure up<\/h2>\n

The average price per square foot might be a jumping-off point in the home shopping process, but that number is just an average. It doesn\u2019t account for the many factors that make each home unique. Start assessing home value<\/a> with price per square foot, but keep the following in mind when comparing homes.<\/p>\n

Lemon vs. luxury: Accounting for the home\u2019s condition<\/h3>\n

A single number can\u2019t tell you the condition<\/a> of a home. The higher-end or more custom a home\u2019s features, the harder it gets to use price per square foot as a benchmark for value. This is because price per square foot is most illuminating when you\u2019re using it to compare two or more similar properties.<\/p>\n

Using price per square foot as your only measure of value would indicate that a sprawling luxury home<\/a> is priced similarly to a much smaller home that needs critical updates. Price per square foot can\u2019t account for the building materials, finishes, or the quality of work put into the home.<\/p>\n

Calculating a useful price per square foot number \u201cis very difficult on a custom home or a luxury home because you’re never going to find a home like that again,\u201d says Coffey.<\/p>\n

Here\u2019s another way to think of condition: imagine that two homes in a neighborhood have the same square footage and were built within a year of each other. But:<\/p>\n