Definition
A property's total sale price divided by total square footage, providing a standardized metric for comparing values between different-sized properties. This metric helps you identify overpriced or underpriced homes.
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Price per square foot varies by neighborhood, market conditions, and property quality. Comparing price per square foot helps buyers understand whether a property is overpriced or underpriced relative to similar homes. This metric should be considered along with other factors like location, condition, and market trends.
Pro Tip
Calculate price per square foot for comparable properties to determine if a home is priced competitively.
Example
The home sold for $450,000 with 2,850 square feet, resulting in a price per square foot of $157.89, which was 8% below the neighborhood average of $172.