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 $800 per square foot home will definitely have nicer bathrooms than a $400 per square foot home.
I was curious about Sonoma County’s historical price per square foot, so I analyzed all single family home sales from 2000 through the end of May 2024.
House prices really took off in 2021.
You can immediately see the two major pricing events of the last quarter century. There was a big increase in price peaking in 2007. The financial crisis that followed saw prices fall from around $400 per square foot to just over $225. Across the whole county, price changes tracked each other closely. Starting in 2012 there was steady growth until the Covid pandemic hit. Work from Home became a big driver of sales, and prices began to climb rapidly. The last three years saw dramatic rises in price per square foot as multiple buyers chased fewer listings.
During those years, we saw variations across cities emerge. The latest figures indicate that five Sonoma County cities have approximate average square foot pricing at $100 increments:
- Sonoma $900
- Healdsburg $800
- Sebastopol $700
- Petaluma $600
- Santa Rosa $500
Those are averages, and most Sonoma County cities are relatively small, so a few sales can make a big difference. For instance. Healdsburg shows a spike in price per square foot last year. That’s a direct result of nine sales at Montage which were in the $2,000 per square foot range. Those wouldn’t affect a city with thousands of sales, but Healdsburg averages
For the math challenged:
House price divided by square footage equals price per square foot.
A 1,500 square foot house selling for $600,000, for example.
$600,000/1500=$400 per sq. ft.
Example 2:
You are shopping for a home and you have a lender willing to loan you $550,000 to go with your $50,000 down payment.
Your budget of $600,000 total buys you:
$600,000/$400 per sq. ft. = 1,500 square foot home
or
$600,000/$600 per sq.ft. = 1,000 square foot home (either more luxury or more land)
Happy house hunting in Sonoma County