Price Per Square Foot In Real Estate

price per square foot
It is important to focus on more than just the price per square foot in real estate.

Having sold real estate in South Florida spanning across several decades, we have seen some trends come and go. With this said, one thing has remained constant. When it comes to valuating properties, sellers believe that their property is the Taj Mahal. Meanwhile, the same property to a prospective buyer is a run down shack. Although these descriptions may be slightly exaggerated, they are not too far from the truth. One important piece of advice that we always offer our clients whether they are buying or selling property is to check your emotions at the door. In the end, a property is simply worth what a buyer is willing to pay for it. With this said, many buyers and sellers oftentimes become fixated on the price per square foot methodology of valuating property.

Calculating price per square foot

Calculating the price per square foot of a home is relatively straightforward. Assuming that you have the price of a home, you can take this figure and divide it by the living square feet of the home. This will then provide you the price per square foot for the home. As an example, if a 2,000 living square foot home sells for $1,000,000, then you would divide $1,000,000 by 2,000 living square feet to determine that the home sold for $500 per square foot.

A few of the most common ways to measure a home’s square footage are as follows:

Proceed with caution

Although price per square foot is a common way to analyze properties, it is important that home buyers and sellers do not become too fixated on this endpoint. Perhaps the best application for this method of analysis would be for a community of “cookie cutter” homes. We often see these in towhouse communities or developments that offer only several models of homes that are built in the exact same fashion. Of course, even in these types of communities the trim and finishes for each home may vary widely which would also impact valuations. For more information on how a price per square foot analysis may be misleading, be sure to view our helpful video.


Determining accurate home valuations is most certainly a science. Of course, in the end, a property is worth what a buyer is willing to pay for it. Other factors such as buyer demand in a particular market as well as the inventory of homes for sale can also impact this greatly. While analyzing the price per square foot of a home is a useful tool, it is important for buyers and sellers not to only focus on this. Are you looking to buy or sell property in South Florida? Contact Natasha at Live South Florida Realty, Inc. today! Don’t forget to download the free Florida Home Search App as well!

By natasha moore

REALTOR® with Live South Florida Realty, Inc.