How To Value Your Home Accurately
Price per square foot is the most overrated and potentially the most inaccurate way to value a home.
Often people are asking, "What's the price per square foot? What's the price per square foot?" They almost act as if it's really the only thing that matters in a home sale. But I want to make the argument that it is certainly a metric, but it is nowhere near the entire picture.
Right now, if you're selling for the same price per square foot as your neighbor sold for a month or two ago, you're underselling the property. Just by definition, if price per square foot was the only thing that mattered, then literally the market would never move. It wouldn't go up. It wouldn't go down because price per square foot would be constant. There are other things that matter, such as interest rates, inventory levels, competition, condition, view. All kinds of different elements that have to be considered in the entire equation.
You cannot be pricing a home for where it's at today. You have to be pricing for where the market is headed. And when you're doing that, you're able to do two things: In a rising market, you're able to capture more equity, and in a dropping market or in a more challenged market, you're able to hold onto as much equity as possible and not make the mistake of chasing the market as others will.