Size Doesn’t Matter

Say you want to spend around a million bucks to buy a house.  Wouldn’t it be useful to know how much houses typically go for per square foot in that price range?  Then you could take the square footage of the house you’re looking at, multiply it by the price per square foot and come up with a rough idea of value.

Now say you’re in the happy position of having $2 million dollars to spend.  Could be that $2 million dollar houses cost that much just because they’re bigger than $1 million houses, in which case their price per square foot would be the same.  Or they might cost more because of the area they’re in, or their finishes and amenities.  Whatever the reason, it would be useful to know how much they go for on a per square foot basis. ...  Additional Details

Measuring by the Foot: Does it Make a Difference?

Several readers and clients have asked me recently about price per square foot metrics.  Certainly, if you’re trying to figure out how much a home is worth, it helps to get a sense of value by knowing what houses (or condos) are going for in the area on a per square foot basis and multiplying that by the size of the house in square feet.  Elementary my dear Watson.

However, others have been curious about whether there might be a discontinuity between the median price of homes and the median price per square foot, and what that might mean, especially in the context of how much each has fallen from its all-time high.  So I decided to take a look. ...  Additional Details