Published by REALTOR.com | June 5, 2024
The latest monthly housing report from Realtor.com® reveals that the typical listed price per square foot grew by a whopping 52.7% from May 2019 to May 2024.
A home’s price per square foot is a somewhat overlooked real estate feature. When shopping for a house, buyers are usually focused on the total size, list price, and location.
But price per square foot is a crucial metric, and it’s now grabbing some rare attention: The latest monthly housing report from Realtor.com® reveals that the typical listed price per square foot grew by a whopping 52.7% from May 2019 to May 2024.
In contrast, the typical listed home price increased by 37.5% over the same period to its current nationwide median of $442,500.
“The price-per-square-foot metric is an important one to pay attention to,” says Realtor.com senior economist Ralph McLaughlin. “The change in that metric is a more solid measure of how much more a home is worth over time than looking at changes in median list price.”
In a nutshell, a home’s median list price can rise or fall without accurately reflecting what’s really going on in the market.
“The median list price can fluctuate even if the market is stable,” McLaughlin explains. “For instance, an increased share of smaller homes on the market could lower the median list price without affecting the overall value of homes.”
The price per square foot is a crucial metric in real estate because it allows for easy comparison between different properties, regardless of their size. This helps buyers and sellers determine whether a property is priced appropriately for its location and condition. Additionally, price per square foot helps in assessing market trends, indicating whether prices in a particular area are rising or falling.
Yet while price per square foot is valuable information, it’s only one data point of many that buyers and sellers should consider.
