Every now and then, someone asks me to discuss what their home is worth as “price per square foot.” Fine, then. Here is my reasoning on why determining value by price per square foot is a myth.
Looking at value in terms of price per square foot is an attempt to make value an easily quantified number that is real. Example: the average price per square foot for sales of homes in the 90041 zip code over the last 3 months is: $504. Therefore, the home at 2014 Estes Road is 1735 square feet and the value calculates out to be $874,440.
Great. Is that a real value? Should I list my home for, say, $869,000? Maybe, maybe not. Is it really “worth” that? I have a 14,000 square foot lot. Should I add in some value for that? Or for my central air and heat? Or my view?