Price per Sq Foot or selling price (sales, real estate)

[dansdrive]

What is a better indicator of a communities house prices, is it the cost per square foot as it pertains to homes on the market or the asking price? Some homes sell for more per square foot then their surrounding homes.

My feeling is you can tell the price per square foot by using the listing and the advertised homes square footage and then go into the government site that list the home sales in the community and the prices they sold for. From the actual sale price you can then calculate the actual price per square foot and is that not a better indicator on what the homes should be selling for?

The caveat would be if the home had some uniqueness that would drive the cost per square foot up.

Any good ideas/suggestions on what is the better indicator of a communities home values?

[tbone65]

Not so sure that $/sq foot is a good indicator in RDU. I have seen some grossly overstated figures. Of course, it is up to the buyer to verify the sellers claim.

[transplanted yankee]

It somewhat depends on what type of neighborhood you are looking in. For example, if you are looking in a neighborhood built by a large, national builder that buids "ala carte", you can't compare homes equally. One home might be built with all the upgrades compared to a home with very few upgrades.

If you are looking in an older neighborhood where some of the homes have been updated, you can't compare the home equally.

Many times, price per square foot is just an indicator for the neighborhood - if a home is selling a lot higher or lower, find out why.

Perhaps you should talk to a real estate agent - if you are buying a new home, the commission to the real estate agent is paid by the sellers - even in new home communities!

[jln69]

I wouldn't focus on price per sf all that much. There are many things that factor into that. Condition, location, lot size etc. Not always, but usually the homes with the most square footage in a neighborhood sell for the lower end of the range per square foot in a given neighborhood. The smaller homes will sell for the higher price per sf in the neighborhood range.

I focus more on the asking price and do a CMA when making an offer. I will look at the price per sf to see if it's in line with the neighborhood but I wouldn't base a decision solely upon that.

Hope that helps or did I confuse even more.