Price per square foot is a useful tool for the real estate industry.
- Real estate agents use it for informal appraisals and professional appraisers make use of it for formal valuations.
- For home buyers it’s one way to compare homes of different sizes but similar construction quality.
- Contractors and architects use it as a shorthand to indicate what level of finishes and fixtures a custom home might have. A $500 per square foot home will definitely have nicer bathrooms than a $200 per square foot home.
I was curious about Sonoma County’s price per square foot, so I ran a report from the first few weeks of July.
Out of 214 reported home sales, the home that was exactly in the middle of the distribution had a $200.00 per square foot selling price.
Apart from the pleasing roundness of that number occurring in the middle of the results, we had sales ranging from $100 to almost $700 per square foot. The bargain pricing in the $90 to $110 per square foot range included condos and at least one fixer with acreage. At the high end of the Sonoma market we had only ten homes that were over $400 per square foot.
The few properties that broke that barrier tended to have significant acreage. In fact, the highest value was over $667 per square foot, but that was for a lovely home with 20 acres of property in two parcels. When you use square foot estimates for pricing, you have to make sure to allow for land value in addition to the structures you are analyzing. That’s true of both the high and low ends of the pricing spectrum.
Sebastopol was the leader in this survey with six of the top fifteen valuations per square foot. Sonoma and Healdsburg trailed with three each, and two Petaluma residential sales made it into the top fifteen. Santa Rosa, in spite of a large sales volume, managed only one top value sale for a beautiful timber-framed home on 25 acres in the Faught Road area. More Windsor than Santa Rosa, but who’s counting…
Learn to use the square foot price as a good proxy for value. If you’re bargain hunting, today’s median price of $200 per square foot tells you where the half way point of the market is. The low end of approximately $100 per square foot is probably the cheapest you will be able to find anything, and at that range there are always issues with repairs. For people looking at the luxury end of the market, $400 per square foot will buy you almost anything in Sonoma County with a standard sized lot.
For the math challenged:
House price divided by square footage equals price per square foot.
A 1,500 square foot house selling for $300,000, for example.
$300,000/1500=$200 per sq. ft.
You are shopping for a home and you have a lender willing to loan you $250,000 to go with your $50,000 down payment.
Your budget of $300,000 total buys you:
$300,000/$150 per sq. ft. = 2,000 square foot home
$300,000/$300 per sq.ft. = 1,000 square foot home (either more luxury or more land)
Happy house hunting in Sonoma County