Source: Forbes Advisor —
Calculating the price per square foot can give you an idea of the home’s value and help you compare it with other homes, even when they have different floor plans and sizes. Square foot pricing can also help you estimate the cost to make certain home improvements, like building additional space, pouring a concrete patio or installing new floors. Here’s some information that can help you use this metric when buying, selling or renovating a home.
How Do You Calculate Price Per Square Foot?
To calculate price per square foot, just replace the word “per” with a division sign. So if you’re looking at a $400,000 house that measures 2,000 square feet, the math looks like this:
$400,000 ÷ 2,000 = $200 per square foot
Of course, calculating and comparing price per square foot doesn’t tell you everything about the differences between various homes you’re considering. There are several reasons for this.
- Potentially inaccurate measurements: The listing agent may have carefully measured the home’s square footage, or the information may have come from public records, which are sometimes out of date. For example, records might not reflect an addition to the home.
- Land value: Land value contributes significantly to home prices (especially in coastal markets), and even within a suburban tract, lot sizes can vary. You won’t be able to compare properties accurately if you’re just looking at the price per square foot of the structure.
- Unincluded livable space: A home’s listed square footage may not include areas like a basement, attic or finished garage that could be used as livable space.
Price per square foot can still give you an idea of how desirable a home is, though. For instance, the average home sale price exceeds $1,000 per square foot in San Francisco but sits at $168 in Bloomington, Indiana. Higher numbers can tell you that the home’s location, design and other features are in demand whether you’re comparing homes across the country or within the same ZIP code.
Average Price Per Square Foot to Build a House
The national average cost per square foot to build a house is $150, according to Home Builder Digest. The average cost can range from $54 to $270 per square foot based on a home size of 2,600 square feet.
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