If you are in Charlotte real estate, you are often asked
How Much Is That Home per Square Foot?
That’s the question we Realtor’s hear almost daily. But can you predict a certain homes value, by the pasts’s average sf price? Well no. But it is such a bad predictor of value, that many MLS’s don’t report square footage on their listings, or like ours, they give a range of square footages…
WHY?
Price per square foot is easy, its division, and even if inexact, Buyers and Sellers often use to compare properties. It is great for a historical look at large number of homes. It is an important first step in valuing a property. Unfortunately, because of its simplicity, it is often mis-used, and misunderstood. Instead, you must look st the range of square foot values and apply tie right value to the home you are considering.
What is Cost Per Square foot?
Simple mathematical division: when looking at a property, we simply take the sales price, and divide by the reported square feet. Sales Price/Sf=$/sf . in Charlotte, homes old have reported exact square footages making a historic view of the transactions quite accurate. On home for sale, the MLS reports a range of square foots, but because we don’t report exact square footages prior to sale, you need to first estimate the square foot, then do the division… and then you MUST
Adjust Cost Per Square Foot
There is always a range of selling or sold prices- the high to low, and I often report the median Sold cost per square foot- the middle price based on a period’s sales. Where a home sells, on a cost per sf basis is, is determined by the negotiated agreement, and that is determined by the relative value of atleast these variables below!
Construction Materials- Brick versus siding etc
Condition- from the extremely good to the bad, walk in and do nothing, or walk in and needs everything
Lot Size/Location- nice lots fetch more money. Families with children like cul de sacs. Water view, water front, and golf course lots command larger premiums.
Upgrades- the more upgrades, the higher the price
Overall appeal- the intangibles, but beauty is a powerful one, community amenities when comparing competing subdivisons.
Other adjustments include: shared driveways, HOA/Condo fees, big easements, and many more!
So if you know the range of home prices, and the median cost per square foot for a given neighborhood, you should be able to determine the best, worst and most likely price. In this way, with good information, you should know a bargain when you see it.
I love square foot pricing when used in the aggregate, looking at the past, what can I say, I’m Analytical! It is perfect when comparing, for example, the last 180 days sales in subdivision A versus subdivision B. If there are a handful of sales, this provides good information on relative pricing, and price trends. However, it is of much less value, trying to predict selling prices, BECAUSE the adjustments above are quite subjective, and there are always outliers.
We can help you with this- this is just one of the research tools we use to evaluate prices, offers and suggested List Prices.
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A smart buyer, good information and a good Buyer Agent Make GREAT deals happen!
Call us today, 704-351-1519, or use the link below.
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Charlotte Home Buying Questions? 
As the economic recovery expands, expect rates to go up. The difference between 5% and 6% interest on a $250,000 loan? Fixed for 30 years, the 5% payment is $1,342/mo, the 6% payment is $1,499, that’s $157/mo, $1,884 per year, and $18,840 over 10 years.
