Let’s look at the price on my new one-story listing. After all, the 5,345sf house right up the street (that went pending the same day) was listed for the same.
At first glance:
$1,799,000/5,345 = $337/sf
$1,798,000/3,729 = $482/sf
But we know that the cost-per-sf metric is one of the worst ways to compare the values of two homes. We use it for measuring the change in the general trend, mostly because no other metric has been devised that is any better.
Why is it a bad measuring stick?
Because when you are only comparing house to house, the cost-per-sf bundles up all the many variables into one neat package to call it apples-to-apples.
But consider the many variables here that shouldn’t be bundled:
The 5,345sf two-story house appeals to younger people, probably to those with a few kids. Even if you have 4+ people to occupy, you probably only need 4,000sf of it, and be lucky to get around to using 4,500sf. It is a view home, but you only look over scrub brush – I’ll give you a little benefit of not having a neighbor behind, but that’s about it – and the fire danger should be considered.
While younger folks don’t mind a single level, the older crowd insists on them – and they won’t consider a two-story, which skews the supply-and-demand.
Let’s compare Carlsbad houses sold in the last six months over 2,500sf:
The average one-story premium in Carlsbad over the last six months has been 36% when you are comparing the general statistics.
If you insist on using the cost-per-sf metric, a more-accurate way to compare my price is to compare it to the general trend of other one-story sales:
My listing = $482/sf
Carlsbad one-story sales over 2,500sf, last six months: $509/sf
Heck, I’m giving it away!
If you are the type of buyer who will only buy a single-level home and need 2,500sf or more, you want to consider the rarity factor too. There has only been only five sales per month, and they’ve been popping off the market. The median days-on-market is eight!
I was the one who put the price on my listing, based on the one-story premium. We will see if today’s market agrees!
Here’s my YouTube from last month that showed a few examples: