Wouldn’t it be nice if there were an easy way to find out how much the home you want to buy or sell is worth? Some people consider price per square foot to be a valid way to determine market value. The price per square foot is arrived at by dividing the sale price or estimated value by the number of square feet in the home, not including the garage.
In theory, by using the price-per-square-foot approach, you could easily determine what price to pay for a home or sell it. All you would have to do is find out the price per square foot for recent sales in the neighborhood. Then average these figures and multiply the average price per square foot by the square footage of the home you want to buy or sell.
There are shortcomings to this approach. In areas where there is extreme variability in home size, style, improvements and amenities, price per square foot could be misleading. For a price per square fot to be reliable indicator of value, you need a standardized housing stock. Each home or condominium would need to be the same size, have the same ownership dues, the same floor plans, same amenities in the home. There are few San Diego neighborhoods that are standardized today. Realize that as soon as variability,due to remodeling, enters into the housing stock price per square foot along won’t tell the entire story.
In neighborhoods, such as olde Del Mar, Solana Beach, Cardiff-by-the-Sea, Encinitas, Leucadia and Rancho Santa Fe, where homes weren’t built at the same time, or in the same styles, there’s even more diversity. Within this varied environment, certain types of homes may attract higher prices.
The most accurate way to determine the estimated selling price for a property is to compare the attributes of the property with similar properties that have just sold, not just price per square foot. Location is one of the main features to consider, as well as lot size, the view and the quality of the finishes in the home. They all have an effect on the value of the home.
Let your Realtor help you to determine the value of the home you wish to sell or buy!
